A closer look at energy trends in 2023 and beyond
Demand for electrification and renewable energy continues to grow worldwide, largely driven by the need to reduce CO2 emissions and protect the environment. At the same time, electricity grids have insufficient capacity to absorb renewable production. Last year, we clearly saw the global energy crisis leading to increased demand for renewable energy. However: compliance with existing targets and new policies are paramount in achieving the energy transition and reducing carbon dioxide.
To provide a clear picture of the latest developments in energy technologies and markets, the HyTEPS Power Competence Centre has listed some of the key findings from experts for you.
1: Trends in The Netherlands
More solar energy
- In 2022, nearly 4 gigawatt peak (GWp) of new solar power capacity was installed for the third consecutive year (30% growth). Most newly installed solar panels are for the consumer market. Across Europe, the rollout of solar power capacity accelerated by 47% last year. Dutch New Energy Research expects this European trend to continue in the coming years.
SOURCE: Dutch New Energy Research, Nationaal Solar Trend Report 2023
- The contribution of gas to electricity generation is declining. The growth of renewable sources in 2021 was mainly at the expense of gas power plants while (central) electricity generation from coal actually increased.
SOURCE: Government Climate and Energy Outlook 2022
- By 2030, at least 27% of all energy used in the Netherlands must come from renewable sources and by 2050, the transition to a climate-neutral energy supply must be completed. The current system of cables, pipelines and other energy infrastructure is insufficient to meet the sustainable energy demand of the future. The construction of the new energy system must take into account the transition from fossil to renewable energy sources and an increase in energy demand.
- To generate climate-neutral energy by 2050 will require, among other things:
– 60,000 to 80,000 kilometers of cable
– 8,000 to 13,000 new electrical power stations
– Conversion of part of the current gas network to hydrogen
– New pipelines (on land and sea) connecting new energy sources to industry
– 1,700 wind turbines at sea, including connections to land
SOURCE: Netherlands government
2: Global trends
- Electricity demand growth down slightly in 2022
Global demand grew by just under 2% from an average growth rate of 2.4% in 2015-2019. Electrification of transport and heating continued to accelerate globally, with record numbers of electric vehicles and heat pumps sold.
- Low-emission sources will almost completely meet power demand growth by 2025
The coming five years will see the same amount of renewable energy added globally as in the past 20 years. Total growth in global renewable energy capacity over the next five years will almost double. By early 2025, non-fossil energy will overtake coal as the main source of electricity generation worldwide. This projected increase is 30% higher than the forecast from a year ago: governments are accelerating development of policies related to renewables. However, successfully integrating the rapid growth of renewables into electricity grids will also require accelerated investments.
- CO2 intensity of global electricity production decreased in 2022 but increased in the EU
However, this increase should be temporary, as emissions from power generation are expected to fall by an average of 10% annually until 2025.
- Need for security of supply and resilience due to extreme weather events
As electricity supply and demand are increasingly weather-related, security of electricity supply requires additional attention. Globally, electricity systems faced challenges due to extreme weather events in 2022.
SOURCE: International Energy Agency Electricity Market Report 2023
- Renewable energy consumption will increase by around 11%
Consumption of solar and wind power will increase by 11% in 2023 as more projects come online. Renewable energy consumption will grow at an average annual rate of 10% over the next decade. Asia is expected to remain in the lead. Natural gas consumption will remain at the same level, but consumption of coal and oil will increase. The energy crisis will even result in some governments reconsidering their plans to phase out nuclear power.
- Global energy consumption will grow by only 1.3% in 2023
As the global economy slows and energy prices remain high, total energy consumption in 69 countries surveyed will grow by only 1.3% in 2023.
- Several trends could thwart global energy transition efforts
- Three trends in particular stand out:
– gas supply shortages and growth in coal consumption
– extreme weather conditions causing countries to fall back on fossil fuel usage
– investments in renewable energy may decline
SOURCE: Economist Intelligence Unit Energy Outlook 2023
- Attracting and retaining skilled workers is more challenging than ever as vacancies often remain unfilled and turnover remains high.
- Economic uncertainty is high as different regions chart their own course to address disruptions and build energy and other trade relationships.
SOURCE: DELOITTE Annual perspectives on sector trends 2023 energy, resources, and industrials industry outlooks
- The global battery energy storage systems market, worth over US$3000 million in 2022, is expected to reach >$8500 million by 2028.
SOURCE: INDUSTRY RESEARCH – Battery Energy Storage System Market Rising Demand Analysis 2023