2024 is poised to be a pivotal year in the global energy landscape, marked by rapid transformation and innovation. As the world grapples with geopolitical tensions, climate change, and the urgent need for sustainable energy solutions, the energy sector stands at the forefront of significant change.
Recent developments, particularly in the wake of Russia’s invasion of Ukraine, have catalyzed a swift transition away from fossil fuels. This move is reinforced by growing climate awareness and the rapid expansion of renewable energy sources. As we delve into the top predictions and trends for 2024, it’s evident that the global energy markets are transforming, driven by necessity, innovation, and a collective push toward a more sustainable future.
1. Geopolitical Tensions and Energy Weaponization
Escalating Regulations and Shifting Strategies
Russia’s invasion of Ukraine and the subsequent geopolitical maneuvers to weaponize Europe’s dependence on Russian gas dramatically altered the global energy landscape. This critical situation has accelerated the implementation of extensive regulations in Europe and the US. Governments are now imposing more stringent measures, including enhanced subsidies for renewable energy, mandatory emissions reporting, and limitations on gas connections, to reduce reliance on unreliable energy sources and mitigate geopolitical risks.
The crisis has also spurred a significant shift in energy strategies among large energy users across Europe, including manufacturing, agriculture, hospitality, and healthcare sectors. These sectors increasingly focus on reducing their dependence on natural gas, especially for heating purposes. This shift involves adopting various renewable energy sources, such as solar thermal collectors, photovoltaic (PV), wind turbines, geothermal, and enhancing energy efficiency by using heat pumps etc.
Growing Tensions and Global Impact
As tensions continue to rise in the Middle East with potential implications for gas and oil prices, and the Russia-Ukraine war soon enters its third year with no solution on the horizon, the urgency to transition away from fossil fuels is becoming a global imperative. This situation will likely intensify and expand geographically, influencing countries worldwide to adopt more aggressive policies and initiatives.
The focus is on accelerating the move away from fossil fuels, manifesting in the push towards renewables and the diversification of energy sources.
The implications of these geopolitical dynamics are far-reaching, extending beyond immediate energy needs to encompass broader aspects of economic and environmental policy. Countries increasingly recognize the need to develop and implement comprehensive energy strategies that ensure security, sustainability, and affordability. This involves a holistic approach that includes investing in renewable energy infrastructure, encouraging technological innovation, and fostering a regulatory environment that supports the transition to a low-carbon economy.
2. The Continuous Rise of Climate Awareness
Policy Responses and Public Demand
The increasing effects of climate change, including higher global temperatures and more frequent extreme weather events, have significantly heightened public and governmental awareness.
The surge in climate awareness is influencing both consumer behaviors and governmental policies. Governments worldwide are responding with ambitious climate targets, introducing legislation to promote green energy and increasing investments in sustainable infrastructure. This shift in policy is driven mainly by public demand for action on climate change, pushing climate policy to the forefront of political agendas.
Media Influence and Corporate Responsibility
The media’s coverage of climate-related issues has brought the realities of climate change into the public sphere, further fueling awareness. In response, companies increasingly recognize the importance of adopting sustainable practices, not just as a moral imperative but also as a competitive advantage. Businesses invest in green technologies and practices, understanding that sustainability aligns with their corporate responsibilities.
3. Booming Renewable Energy and Electrification
Renewable electricity will continue to break records
Renewable energy sources such as PV and wind turbines will continue to grow rapidly. In multiple countries, renewable energy has become the most significant source of electricity:
- Germany produced more than 50% of renewable electricity during 2023, reaching a record of 69.2 percent of the country’s public net electricity generation in July.
- Renewable power sources supplied 61% of Portugal’s electricity in 2023.
- Solar reached a record of 120 percent of electricity demand in South Australia during September 2023.
The trend sees no sign of slowing down. According to the IEA’s World Energy Outlook 2023, investments in Renewable energy are constantly rising. According to the IEA in 2028, renewable energy sources will account for over 42% of global electricity generation.
Further Electrification of Transportation and Heat
Electricity accounts for roughly 25% of world energy, transportation accounts for another 25%, and the other 50% goes to heat. Transportation and heat will continue to be electrified to allow the transition away from fossil fuel to renewable energy.
In the transportation sector – EV production and sales will continue to grow and spread beyond cars and small electrical vehicles to the maritime and aviation industries. The decarbonization of heat will continue in two significant paths:
- Using more heat pumps powered by renewable electricity, in industrial and domestic scenarios.
- Direct renewable heat production via thermal solar collectors.
4. Energy storage – not just batteries
Batteries
Batteries’ technology is improving and spreading fast. 2023 saw the doubling of energy density in lithium-ion batteries for cars and aviation and the introduction of commercial sodium-ion batteries. Technological improvement and increases in production drive costs down, bringing more demand, technological improvements, and so on.
But batteries for transportation are not alone. Current research predicts a surge in large-scale energy storage markets in 2024 as more and more capacity is installed globally, especially in China, the United States, and Europe.
The rise of TES (Thermal energy storage)
We will likely also witness continued growth in the installation and capacity of other storage technologies, such as Thermal Energy Storage (TES), as new and old TES technologies will be used with renewable electricity generation and for heat processes in different applications in commercial, industrial, and district heating settings.
The significance of TES is enormous, as heat for manufacturing processes accounts for 84% of energy-related industrial emissions from burning fossil fuels. TES systems could lower the cost of electricity for industrial heating by 50%-63% while meeting up to 90% of industrial process heat demands.
5. Emissions may peak sooner than anticipated
China, the world’s biggest producer of climate-warming greenhouse gasses, has seen an unprecedented solar and wind capacity installation boom in the last few years. The result is staggering – China’s emissions could reach a peak and start declining as early as 2024.
This excellent news proves that the fast adoption of clean, sustainable technologies brings us closer to fully decarbonizing our world economy.
6. Decarbonization of heat: the most significant opportunity in today’s energy transition
While significant strides have been made in decarbonizing electricity with solar and wind technologies and in transportation through adopting electric cars, heat (as mentioned – 50% of world energy) remains a sector heavily reliant on fossil fuels.
As discussed above, the regulatory environment increasingly encourages the reduction of fossil fuels, signaling a substantial business opportunity in the heat sector. Furthermore, recent studies suggest that the most efficient, clean, and cheapest option in industrial process scenarios are renewables-powered industrial heat pumps and solar thermal collector arrays combined with thermal storage.
In other words, renewable heat technologies, such as solar thermal collectors and efficient renewables-powered heat pumps, reduce emissions, cut operation costs, and allow big industrial & commercial heat users to enjoy grants and tax reductions. These ecological, economic, and regulatory benefits present a promising innovation and growth market. Therefore, the decarbonization of heat is a crucial area of focus and holds immense potential in driving the global energy transition forward.
2024 – a greener future is underway
As we enter 2024, we are on the verge of significant changes in the global energy landscape, shaped by geopolitical developments, heightened climate consciousness, and technological progress. The shift towards renewable energy sources, the electrification of various sectors, and the emergence of innovative energy storage solutions are all indicative of a future that is both more sustainable and environmentally friendly.
This period represents a crucial juncture for businesses, governments, and individuals alike, as the transition to renewable technologies and sustainable practices offers not only environmental benefits but also the potential for economic growth and increased resilience. The journey towards a cleaner and greener future is underway, and it promises to redefine our relationship with energy and the environment.
