From policy changes to changes in how individuals and businesses consume energy, below are just some of the changes that could happen in 2021 relevant to energy so you can be prepared.
Renewables will experience a resurgence
Due to the pandemic, some solar and wind projects were postponed as we learned how to live in the new normal. In 2021, we should expect to see a resumption of those projects, with some coming online this year leading to more renewable energy capacity likely approaching 2019 levels. Unfortunately, growth may still lag previously anticipated growth, so room for improvement in renewable energy growth will likely still be a priority into 2022.
Oil production will continue to decline throughout 2021
Due to the COVID-19 related lockdowns, the demand for oil dropped precipitously as individuals and businesses no longer used their cars, public transport, or airplanes to get to where they needed to be. This sharp decline for an already-battered oil industry does not look to be getting better, and production may not ramp up to pre-pandemic levels for the foreseeable future.
Liquified Natural Gas and Coal will feel 2021 impacts
Liquified natural gas will likely continue to be lower than pre-pandemic levels up until the second half of 2021. However, this is dependent on the industrial sector’s economic recovery, given that it is the primary driver of demand for liquefied natural gas. Similarly, demand for coal has followed a similar path due to the COVID-19 related economic slowdown that has plagued our world. If in 2021, there is increased electricity consumption and the use of natural gas increases to fuel the demand for more energy, it is likely that coal prices will increase as well.
Electric power generation may remain relatively low through 2021
Given continued economic uncertainty throughout various sectors, electric power generation may remain relatively low as businesses and industries scale up to meet potentially more demand if the COVID-19 vaccines enable a return to workplaces across the world. Additionally, the ability of the construction industry to add new capacity to power generation will play a role in if and how electric power generation is ramped up this year.
Global energy demand will continue to rise despite pandemic-related economic uncertainty
Leading the way on global energy demand, developing nations will continue to demand more energy as they bring power to places that were not connected or lacked sufficient power. Additionally, higher standards of living worldwide will increase the demand for consistent, reliable energy even if developed nations’ energy demands remain relatively stable or even decline.
What can we expect for 2021?
2021 promises to be a tumultuous and uncertain year for energy given the uncertainty surrounding an economic recovery and the speed at which the global population can get vaccinated against COVID-19. Given some governments’ vaccination targets, the second half of 2021 could be markedly more certain than the first.