According to the International Energy Agency (IEA), renewable energy continues to grow at a record pace. Wind farms and solar power fueled the growth with about 290W of renewable energy generation installed around the world. The renewables industry has shown its resilience, coming through the worst of the pandemic lockdowns while still on track to overtake fossil fuels. Renewable energy generating capacity is primed to exceed that of fossil fuels and nuclear energy combined by 2026.
Technology continues to advance, making renewable energy more competitive with fossil fuel energy, and in most cases less expensive. Cities, states, and utilities are setting ambitious clean energy goals and enacting policies to meet them.
These trends are set to continue into 2022. There is more awareness and concern about the climate crisis than ever before. Support for environmental, sustainability and governance (ESG) issues is growing and there is a demand for clean energy. The White House plan to decarbonize the economy by 2050 will encourage growth in the sector, too.
The Deloitte 2022 renewable energy industry outlook report has highlighted five industry trends that will impact the growth of renewable energy in the coming year.
- There is more interest in new technologies such as green hydrogen, advanced batteries, and other forms of energy storage. These will be instrumental in providing clean electricity generated by wind and solar power, easing the stress on the energy grid, and helping to integrate solar and wind into the energy mix without sacrificing reliability. With private investment and federal support, new technology can more quickly be commercialized and added to the renewable energy mix.
- New business models will grow from early successes with renewable energy. Solar has seen an 85% cost decline over the past decade making it the most cost-competitive energy on the market. Combining solar with storage, implementing community solar projects, and creating floating solar farms are all under discussion as innovative models for the near future.
- Infrastructure to allow transmission of offshore wind energy to populated areas will need to be streamlined. Remote wind farms need modern, reliable transmission lines to transport the power to where it is needed. Many projects are stalled in regulatory approval processes for interstate connections or coastal infrastructure. Innovation in high-volume transmission lines tied into transportation infrastructure may alleviate some regulatory burden.
- Supply chains will be scrutinized for greater efficiency and for compliance with ESG issues. The trade tensions between China and the United States have caused disruptions to renewable energy implementation. Companies are bringing some manufacturing for renewable energy components to the US, especially for wind turbine parts, but some supply chain issues remain to be resolved.
- The waste generated by renewable energy installations that are nearing end of life will force the industry to consider ways to become more sustainable. Lithium-ion batteries are currently being repurposed for energy storage after their use in electric vehicles. Recycling and reusing materials to create a circular economy for renewables is a key to sustainable growth for the industry.
People are more focused on climate change and sustainability. Young people are making climate change mitigation a main theme in planning their careers. Technological advances, innovation, and changes to public policy will move the needle on mitigating climate change hopefully with enough speed and urgency to approach meeting the Paris climate accord parameters.