Five shifts for energy in 2030

The energy sector has undergone more change in the past 10 years than in the previous 50 years. US shale gas production has increased nearly tenfold, pushing US imports to their lowest levels since the 1980s.

The cost of solar power has fallen so significantly that it has become equivalent to traditional sources in some parts of the world. This is despite previous projections that the price of solar energy had been high due to a shortage of silicon suitable for making solar panels. After the Fukushima disaster, many nations also stopped using nuclear power plants.

With this shift in mind, we must be prepared, as the next ten years will be as unpredictable as the last. The appearance of trends for 2030, however, leads us to believe that the future is positive.

We transport ourselves to the future and present here the five most important trends that we expect to see in the coming years:

1. The implementation of a price on carbon

The trading of national emissions permits in China had some initial problems after its launch in 2017. Despite this, by the early 2020s it was responsible for 50% of the reduction in Chinese emissions. The presence of a powerful regime regarding the loss of competitiveness in other countries.

As a result, more nations began to implement their own emissions trading regimes. In the end, all countries included the energy sector in their regimes, and this was done by impacting the prices of fossil fuel sources and increasing the attractiveness of investment in renewables around the world.

Following the European Commission’s decision to rectify the over-allocation of allowances in the EU Trading Regime, the European and Chinese markets could be linked. Canadian-Californian decided to negotiate its inclusion in the system. The new inclusions paved the way for the establishment of a global price on carbon by 2030. This means that there will be a single price, applicable worldwide, for the right to emit a tonne of CO2 into the atmosphere – providing a simple and powerful initiative for the transition to clean energy sources.

2. Investment in renewables has quadrupled while divestment from coal is widespread.

In 2013, the US stopped investing in new coal-fired generation projects abroad. In the same year, the World Bank Group capped its financing for new coal-fired projects. Encouraged by earlier initiatives, the Norwegian Sovereign Wealth Fund pledged to divest from coal in 2015. Spurred by the growing focus on the long-term risk associated with divested assets, pension funds and other institutional investors followed suit in the 2020s, shifting their investments to renewables around the world. By 2030, there will be more than $1.2 trillion invested annually worldwide in renewables, more than five times the investment in fossil fuels.

3. Public engagement in energy spreads to areas with community-owned energy

Many developed countries did not meet their energy efficiency targets in the 2020s due to a lack of public engagement. Consequently, governments were directed to focus on decarbonizing energy generation. This led to increased financial and regulatory incentives for microgeneration with renewable sources. Learn why energy efficiency is the best opportunity for emissions reduction.

In 2030, microgeneration will generate more than 50% of energy in developed countries, compared to less than 5% in 2016. In addition, research indicates that this area has seen an increase in the use of specific energy efficiency technologies, reduced energy consumption, and much less resistance to technologies such as wind microgeneration.

Politicians are beginning to see microgeneration as a way to get citizens engaged in energy production. Furthermore, the measure could reduce socio-cultural barriers to the use of more affordable renewable sources.

4. Europe becomes the production center for the next generation of renewable energy. Having lost much of its photovoltaic production to China, Europeans have prepared themselves so that this will not happen again. The next generation of renewable energy could be dominated by Europe, which will invest heavily in R&D together with multinational companies.

Europe will become the production center for photovoltaic solar films. Continuous printing technology allows the production of panels as efficient as conventional silicon panels, at a fraction of the conventional cost.

3D printing has enabled lower costs and faster production of large wind turbine blades, by reducing the complexity and energy intensity of production. By 2030, Europe will be the production center for renewable energy. Growing markets around the world for the new generation of technologies that are being produced confirm European hegemony.

5. The fossil fuel lobby is (almost) extinct

The widespread electrification of transport and heating, the transition to Smart Grids, and the huge increase in the need for energy storage have created opportunities for companies involved in the energy sector. As expected, start-ups led initially, but by 2030 the market is dominated by previously strong companies in other sectors.

These mature companies know which market conditions are instructions for new products to thrive, and how to achieve this.

In 2030, the energy lobby is different. Powerful voices, once concerned about agricultural subsidies or air quality, are now calling for cost-reflective energy prices and the removal of fossil fuel subsidies.

The vested interests of the past are realizing that their control over energy is declining.