Energy Trends and Predictions for 2022
This week, GridDuck is speaking to investors and partners with various areas of energy expertise and asking for their new year predictions.
Whether you work in the energy sector or not, 2021 has been a turbulent year: a rollercoaster of highs and lows, restrictions, recoveries and rebounds. While we appreciate it’s hard to make accurate predictions about what’s around the corner, GridDuck has asked its energy partners for trends, observations and thoughts as we enter 2022. Here’s what some of them told us:
Electrifying Transport and Cleantech with Nick Butlin
Nick Butlin is the managing director of Viriya Energy, a company providing energy consulting services to businesses.
He predicts that next year decarbonisation will be higher on the priority list than ever before. He also thinks it will be an opportunity for governments to flex their investment muscles in building strong post-COVID economies.
“I think we will see support and funding across the board for decarbonising technologies and in particular transport electrification, the area in which I work, as a key driver of the energy transition,” he says.
Nick explains that the drive to net zero will be supported by more battery electric vehicles being manufactured and brought to market, many coming with embedded smart charging capabilities.
“With 60% of consumers and numerous fleets and bus operators looking to electrify, this could be a huge number of vehicles and many kWh of battery capacity.”
He also has two bonus predictions in transport and cleantech, touching on the more sci-fi side of technological progress. “We aren’t likely to have full, level-5 autonomous vehicles this year, although it will still continue to be talked about as if it had already arrived,” he tells GridDuck. “We are however quite likely to see large-scale trials of climate engineering - attempts to block the sun with cloud seeding - although hopefully not quite Bond-villain style.”
Mike Davies on the Drive to Net Zero and Energy Prices
We can’t count how many times we heard or read about the UK government’s net zero carbon target by 2050. COP26 in November became a platform for launching and renewing commitments to ambitious plans. Yet many believe we aren’t entirely on track. In October, the Young Energy Professionals Forum surveyed its 2000+ members, who come from over 350 organisations. Less than half (47%) believed that the government would reach its target with its current strategy.
Mike Davies, from ClearCost Energy, specialises in helping a range of individuals and businesses to understand and mitigate the financial risks associated with the energy market. He believes that the drive to net zero will bring out people who make exaggerated claims with ineffective products, supported by pseudo-science. “Expect the magic magnets to reappear,” he says, “probably pulling carbon dioxide out of the air by some mysterious process.”
Davies also has this word of caution for businesses working towards a net-zero strategy in the coming months. “The combination of volatile energy prices and the introduction of net zero initiatives during 2022 leaves plenty of scope for organisations to get their energy contracting strategy badly wrong.
“Any energy contracting strategy should consider how costs can be contained during peaks in market prices,” he advises, “but still reap the rewards of dips in market prices, and the savings produced from net zero initiatives.”
The energy sector in particular has been hit by a significant energy crisis. Demand for gas decreased in 2020 as a result of the pandemic, but it rebounded sharply. Prices for wholesale gas went up dramatically in 2021. It caused the collapse of several UK energy suppliers, with consumers facing steep rises in the cost of their bills, leading to an inevitable increase in fuel poverty.
Davies says it’s likely energy prices will remain high in the foreseeable future. However, these costs tend to be cyclical, although the UK is in a somewhat vulnerable position.
“Currently, generation of UK electricity is to a large extent reliant on imported gas, and this is unlikely to change significantly in 2022, leaving the UK exposed to world gas prices,” explains the managing director. “Of course, the resurgence of COVID-19 may adversely affect the world economy and reduce the demand for gas, with prices collapsing again. It’s likely that 2022 will be a rollercoaster ride for energy prices.”
Meanwhile, the International Energy Agency (IEA) estimates that worldwide gas consumption could be 7% higher in 2024 than its pre-Covid levels, if it continues to be left unchecked. This is despite our commitments to net zero targets.
Akshat Gupta on Electric Vehicles and Grid Flexibility
Akshat Gupta is an energy expert who promotes net zero through the design of consumer products. He expects more consumers to purchase electric vehicles, driving down the cost of charging them. But he believes that currently more needs to be done to encourage wider takeup.
One of his suggestions is for the government to come up with proper incentives for consuming energy when it’s cleanest. “They need to encourage people to use energy during different time periods, rather than making it all fixed,” he says.
He also believes that EV drivers face too much admin and red tape to participate in grid flexibility. As we shift away from fossil fuel generation, it’s increasingly important that EVs support the grid by being flexible - enabling it to match the peaks and troughs of renewable energy.
“While a lot of work has been done and there has been some good progress, the steps you need to go through as a consumer and a provider are not straightforward enough,” he tells GridDuck. “The local distributors and network providers need to go much further and make it easier for aggregated EVs to participate.”
Elaine Trimble and Molly Webb on Consumer’s Changing Habits
While governments clearly play a part in shifting away from fossil fuels to renewables, consumers play a significant role, too, and will increasingly put pressure on companies that lag behind their values, by voting with their wallets. Research from consulting firm Accenture indicates that many consumers are looking to support brands that are engaged in helping their communities or in playing a positive role in tackling issues such as climate change.
Accenture surveyed more than 25,000 consumers across 22 countries and found that a full 50% cited the pandemic for causing them to rethink their personal purpose and re-evaluating what’s important to them in life. Additionally, 42% said the pandemic made them realise that they needed to focus on others more than themselves.
These findings are echoed by Elaine Trimble and Molly Webb, co-founders of Yoyu, an app for forecasting renewable energy availability and thus helping people to identify when they should use more or less energy. For example, the app will tell you when you should do your laundry - saving both money and carbon. It can help users save up to 50% of carbon per action.
The co-founders believe that people are increasingly thinking about their communities and neighbourhoods, especially with a lingering pandemic, high fuel prices and COP26 not far behind us.
“We predict that this trend will continue and deepen,” they say. “The way people already question where their food comes from, and are starting to be conscious of where they are investing their time and money, will lead them to question what is behind other areas of their consumption and habits.
“When this turns to the providence of energy, people will become more and more interested in where the electricity we use actually comes from, regardless of which tariff they have.”
GridDuck is an IoT platform that helps businesses monitor their energy consumption, bringing down their energy bills and saving carbon. If you’d like to make 2022 an environmentally and financially positive one, why not schedule a no obligation, 15-minute call to discuss how we can help?