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Deloitte predicts five trends to expect from renewable energy in 2021

Deloitte predicts five trends to expect from renewable energy in 2021

As good as 2020 was, 2021 could be an even stronger year for renewable energy as one of the “Big Four” accounting organizations and the largest professional services Deloitte has highlighted five major trends expected this year despite coronavirus pandemic and domestic economic recession.

In the latest analysis from Deloitte’s renewable energy industry outlook, the consulting firm looks at the top five trends fostering industry collaboration and presented a market outlook for 2021.

According to Deloitte, the first trend expected in 2021 is an expected rise in deal activity across the value chain as stakeholders consolidate positions.

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“Renewable energy dealmaking will likely rise in 2021 as companies, utilities, and governments prepare to meet ambitious climate targets,” Deloitte said in its 2021 outlook.

Deloitte noted that different types of industry players will likely consolidate their positions across the value chain while a growing number of Special-purpose Acquisition Companies (SPACS) entering the clean energy space may also boost investment in renewable companies.

Deloitte predicts an emerging hydrogen economy would expand clean energy infrastructure.

“As decarbonisation proceeds, many industry stakeholders are considering hydrogen production and storage projects, in addition to wind and solar, to find ways to cut carbon emissions,” Deloitte said.

In 2021, the report noted that “as renewable penetration on the grid increases, green hydrogen development is expected to follow because of its potential to act as seasonal storage of fuel available on-demand to generate power for grid balancing.”

Thirdly, Deloitte admitted that energy storage is becoming one of the fastest growing asset classes in the energy industry as falling costs and maturing technology are making use cases for storage more economical, which could enable storage to provide multiple functions, from ancillary grid services to on-demand power.

“As utilities focus on decarbonisation and create netzero targets, offshore wind holds great promise for many, thanks to its high capacity factors and deployment potential,” the 2021 report said.

Deloitte expects onshoring to address COVID-19 and digitalising supply chains which is likely to become a priority for stakeholders in 2021 as the renewable energy industry strives to thrive in the post-pandemic era.

“In fact, shifts in sourcing have already been underway since 2018, as many installers have started diversifying their supply and announcing new manufacturing plants in the United States,” Deloitte said.

The report noted that the potential for increasing renewable energy demand, as well as the electrification of the transportation and industrial sectors and oil and gas companies’ plans to increase participation in the electricity value chain, are accelerating energy industry convergence. “These trends may foster collaboration that gives rise to new business models and helps advance the energy transition,” Deliotte concluded.