Commercial opportunities presented by renewables14th April 2021
Renewables are an increasing presence in the global energy mix, with the International Energy Agency stating that they provided 28% of the world’s power in Q1 2020 – a jump of 2% year on year. As investment in the sector continues and technology advances, renewables present businesses and investors with significant commercial opportunities.
In the UK, electricity demand plummeted during the first UK lockdown, resulting in the National Grid turning off coal-fired power plants. The country went two months without burning any coal for the first time on record. In 2021, the first weekend of April marked the UK’s greenest weekend yet, as 80% of the country’s electricity was generated from zero-carbon sources: wind power provided 39%, solar provided 21% and nuclear accounted for 16%.
While the US is slightly behind, with less than 20% of the energy mix provided by renewable sources, more than half of Biden’s $2 trillion American Jobs Plan is committed to climate-related spend, including decarbonising electricity by 2035. This will require massive investment in wind and solar over the next five years, including offshore wind, where the US has been a late adopter.
As investment in renewables increases, so too will the prevalence of these record-breaking days. With the sector becoming more and more commercially viable, we believe that there are clear opportunities available to those in the sector who have a clear view of the risks associated with rapidly moving markets. These include:
- Support for building out of assets will drive activity over the medium / long term – the UK and northern Europe are world leaders in some technologies (such as offshore wind) and these expertise are increasingly in demand globally
- The asset base is both increasing and ageing, which will require more ongoing maintenance
- Electricity grids need rebalancing and there will be a range of hardware, software and service requirements for reshaping and managing the grid.
- There is a renewables skills shortage in the global market. Opportunities for international expansion are clear as the UK is a key source of talent that is in demand worldwide.
To discuss any of the points raised in this article, please get in touch.