An Outlook on the Future of Renewable Energy

The landscape of renewable energy is rapidly evolving, reshaping how we think about and use energy. From harnessing the power of the sun and wind to exploring more novel sources like wave energy, the future of renewable energy is full of potential and the goal of energy transition is being taken more seriously. At the end of 2023, during the COP28 climate talks in Dubai, world governments agreed on what's being billed as an historic statement and for the first time, have collectively set a goal to move away from fossil fuels. This marks a significant shift in our global energy system. Even though the use of oil, gas, and coal reached new record highs in 2023, renewable energy has been experiencing its own boom.  

In this article, I offer a high-level look into what the future holds for this evolving industry, and how WeConnect Energy has launched a dedicated sector to embrace the challenges and opportunities presented by the emerging renewable energy sector.

The Projected Growth of Renewable Energy

The global capacity for renewable energy is projected to see a significant increase in the coming decades. According to Deloitte, this growth is driven by declining costs, supportive government policies, and increasing corporate commitments to sustainability. Investment in renewable energy is also expected to rise, with a focus on both established and emerging technologies.

Government and corporate policies play a pivotal role in the growth of renewable energy. Incentives, subsidies, and regulations encouraging the adoption of renewable energy are key drivers. Similarly, the commitment of corporations to renewable energy through purchasing agreements and investments is a significant contributor to the sector's growth.

The expansion of renewable energy is not just beneficial for the environment but also the economy. The sector is expected to create numerous jobs, from manufacturing and installation to maintenance and research. This growth presents opportunities for economic development, especially in regions transitioning from traditional energy sources. However, research from the Boston Consulting Group highlights a significant gap in the availability of skilled workers in the green energy sector, which is crucial for driving forward global decarbonisation initiatives. According to these findings, the deficit in skilled personnel within the green economy is projected to reach 7 million by 2030. This shortage is particularly pronounced in critical areas such as solar, wind, and biofuels technologies, essential components of the energy transition. The lack of skilled workers in the energy industry across all sectors, is a recurring issue, my colleague Chris Kelly has previously discussed these issues faced within the Geoscience sector.

As many know, renewable energy offers substantial environmental benefits, notably the reduction in greenhouse gas emissions. But an often-overlooked fact is that its growth also has social implications, including energy security and the potential for energy independence for many countries for whom this has previously been a struggle. The adoption of renewable energy sources is not just an environmental or economic choice, but a social one as well, with the potential to transform communities by providing more stable and sustainable energy solutions.

A sometimes-overlooked facet of the clean energy transition brings to light the importance of energy justice, which ensures that the benefits and burdens of energy production and consumption are fairly distributed. This involves a careful consideration of the socio-economic impacts, including the potential for job creation in the renewable sector and addressing energy poverty. A just transition is crucial and must consider the needs of communities that may be adversely affected by the shift away from fossil fuels. We must ensure that policies and practices support equitable outcomes for all stakeholders involved in the energy system​​. The responsibility for ensuring energy justice during the clean energy transition rests upon a collective effort involving policymakers, businesses, and community leaders, and managing this diverse mix of stakeholders can be a complex endeavour to say the least!

We recently launched our Low Carbon & Renewables sector, which includes a Hydrogen division and with that, have been keeping an extra close eye on trends in this arena. Some highlights I believe worth mentioning include:

1. Electrolyser Shipments Increase: Policies in Europe and the U.S. are expected to drive hydrogen use in sectors such as oil refining, shipping, and aviation. Clarity on U.S. tax credits and subsidies in Japan and South Korea will support this growth​​.

2. Diverse Hydrogen Production: The EU is opening up to blue and nuclear hydrogen alongside renewable hydrogen, with regulations and subsidy programs expected to boost these sectors​​.

3. Ammonia as a Hydrogen Carrier: There's growing interest in ammonia for hydrogen transport and storage, with expectations of increased orders for ammonia carriers as part of the hydrogen infrastructure​​.

4. Clean Energy Investment: A massive £650 billion is projected for clean energy technology investments in 2024, with a significant portion expected for hydrogen and related technologies. This investment trend underscores hydrogen's pivotal role in the energy transition​​.

5. Decarbonisation of Hydrogen Production: There's a push towards decarbonising the hydrogen production process itself, with manufacturers focusing on lowering emissions in the production of hydrogen technologies​​.

These trends highlight the ongoing evolution and expansion of the offshore wind and hydrogen sectors, with significant technological, economic, and environmental developments expected to shape the industries in the coming years. For further reading on the points mentioned above, I’d recommend checking out the 2024 Renewable Energy Industry Outlook and Wood Mackenzie’s outlook for further reading in this area.  

‍Stable Sectors & Emerging Technologies

Solar and wind energy have been the frontrunners in renewable energy for years, and their dominance is expected to continue. Advances in photovoltaic technology and wind turbine design are making these sources more efficient and cost-effective. Additionally, integrating solar and wind farms into the urban landscape, like solar rooftops and offshore wind farms, is gaining momentum. This bodes well for both sectors in the upcoming years.

Beyond solar and wind, new technologies are emerging. Geothermal energy, while not new, is seeing renewed interest due to technological advancements that make it more accessible. Ocean energy, encompassing tidal and wave energy, is another area with significant potential. These sources are constant and predictable, offering a stable energy supply, we are sure to see even more development within these areas soon.

However, according to several reputable institutions such as McKinsey, the future of renewable energy is not just about generation but also storage. Advanced battery technologies, like solid-state and flow batteries, are crucial for managing the intermittent nature of renewable sources. These technologies allow for the storage of excess energy, ensuring a stable and reliable energy supply.

Similarly, artificial intelligence (AI), machine learning and blockchain are increasingly crucial in optimising energy systems. From predictive maintenance of wind turbines to optimising energy distribution networks, these technologies enhance efficiency and reduce costs.

Furthermore, hydrogen energy is also gaining traction as a clean alternative for sectors hard to decarbonise, such as transportation and heavy industry. Green hydrogen, produced using renewable energy, holds great promise for a sustainable energy future. We are still a long way to go before Hydrogen becomes commonplace, with the bankability of large-scale green hydrogen projects still causing low FID rates, however as a concept Hydrogen is providing itself to be a viable alternative to fossil fuels should the commercial challenges be ironed out.  

The combination of these well-established sectors, along with new and innovative solutions, indicates that our collective future will only continue to become increasingly sustainable as more and more industries transition to renewable alternatives.  

Hydrogen Strategies in our Home Markets

With offices in both, I take a particular interest in the advances within the UK and UAE markets and when comparing the hydrogen energy initiatives, both countries are making significant strides; albeit with different approaches and focuses reflective of their unique resources and strategic priorities.  

The UK's hydrogen strategy is part of its broader commitment to achieving net-zero carbon emissions by 2050. The UK government has outlined an ambitious plan to develop up to 10GW of low-carbon hydrogen production capacity by 2030 . This plan includes significant funding for hydrogen projects and a "twin track" approach that supports both electrolytic "green" hydrogen and carbon capture-enabled "blue" hydrogen. The strategy aims to scale up hydrogen production, stimulate investment, and develop the necessary infrastructure for a thriving hydrogen economy. The UK's focus is on creating a domestic market for hydrogen, supporting innovation, and leveraging its existing energy sector expertise to transition towards cleaner energy sources​​​​.

In contrast, the UAE's National Hydrogen Strategy 2050 has set a goal to become one of the largest producers of hydrogen by 2031, with a focus on low-carbon local industries and achieving climate neutrality. The UAE plans to accelerate the growth of its hydrogen economy by developing supply chains, establishing hydrogen oases, and setting up a national research and development center for hydrogen technologies. The strategy outlines the production of 1.4 million tons per annum (mtpa) of hydrogen by 2031, with an increase to 15 mtpa by 2050. The UAE's approach emphasizes leveraging its abundant solar energy and natural gas resources, alongside its strategic geographic location, to foster a robust hydrogen market both domestically and internationally​​.

Both the UK and the UAE are positioning themselves as leaders in the hydrogen sector, with the UK focusing on integrating hydrogen within its existing energy transition framework and the UAE aiming to capitalise on its natural resources and strategic location to become a major hydrogen producer and exporter. While the UK's strategy is heavily intertwined with its broader climate goals and energy transition plans, the UAE's approach is more focused on establishing a global hydrogen market presence and harnessing hydrogen as a key element of its sustainable economic development and climate action efforts​​​​.  

Our Goals & Ambitions

I'm thrilled to have recently joined WeConnect Energy's as the Director of Low Carbon & Renewables. Our focus has expanded beyond conventional approaches, as we eagerly embrace the opportunities and challenges in the renewable energy sector. This move reflects not only our adaptation to the changing energy landscape but also our strong commitment to leading in low carbon and innovative energy solutions.

In our effort to support companies in finding the best matches to handle the challenges and opportunities of the future, it is vital to know how the tasks required of people working in the renewable energy sector will develop. This is why the team and I continuously follow the latest developments to keep abreast of new advances in the market. So, if you are looking for talent to set your company for success in the renewable energy sector, don’t hesitate to reach out.

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On a final note, I am planning to release a series of informative content over the coming year, as well as attending the World Future Energy Summit in Abu Dhabi, and the World Hydrogen Summit in Rotterdam. So, keep an eye on our website and social media channels for updates and reach out to me to discuss further at either event.