Expert Perspectives: (More) Global Energy Trends

May 11, 2017 Richard Badham

Expert Perspectives: (More) Global Energy Trends

As the global energy landscape shifts, and shifts in rapid fashion, the effects can be felt across multiple departments and stakeholders in multiple geographies. Here’s an overview of the prevailing trends. However, there are other important developments beyond the seven outlined. So our energy market experts — Robbie Fraser, Joseph George and Daniel Waters — are here to provide additional insight on what to keep an eye on now and what to expect in 2018.

Q: What didn’t make 7 for 2017 trends cut?

Robbie: Actually, our first trend — “Where will renewable energy grow in 2017?” — could have easily had a companion on the other side of the energy spectrum. In recent years, the outlook for oil demand growth has undergone a fundamental shift. Unlike clean energy, which is growing pretty much everywhere, oil demand growth has concentrated more and more in emerging markets.  European demand is on the decline and we’re likely already in the window of peak demand in the U.S.

Still, we expect relatively strong global demand growth over the next few years because of how quickly that market is expanding in China and India. Those markets are likely to lead global oil demand growth in the foreseeable future and that has large-scale implications for global oil dynamics.

Q: Which trend would have surprised you most a few years ago?

Joseph: Not long ago, the trends we’re seeing in renewable energy probably would’ve seemed out of reach. Rapidly expanding renewable generation is no longer a regional anomaly, but truly something we’re seeing on a global scale. It’s happening in developed and emerging markets alike, and some of the major OPEC countries have already invested heavily in wind and solar projects.

At the same time, the exponential rise in off-site corporate renewable deals has been impressive, both in terms of scale and the pace at which these deals have cemented a position as a long-term trend to watch.

Office coworkers talking during meeting together in design studio

Q: What’s on the horizon in 2018?

Daniel: For starters, 2017’s global trends won’t end on Dec. 31. The trends we selected were chosen primarily because of the degree they’re reshaping today’s energy market. But their ability to have an impact far into the future is also an important piece of why they’re featured.

Of course, there’s also some potential changes to the energy market that are likely to start building momentum into 2018. The shale boom for U.S. natural gas appears to have stalled of late, but the industry is preparing to make a push toward returning to annual growth. We’re already seeing that process take place in the U.S. oil industry. Moving into next year, the question becomes how long this trend can keep going.

Beyond the U.S., Brexit negotiations are ongoing, and the world will also be paying close attention to elections in France and Germany this year. That ties in with the political trends we’ve highlighted for 2017; the final results are certain to factor into next year’s edition.

Q: Is there a trend people hear a lot about that is misunderstood?

Joseph: Coal is a hot topic and could have earned its own whitepaper. With carbon markets covering more emissions every year, one might imagine that coal is extinct. While coal-fired capacity is shrinking across the developed world, coal will still be the future lifeblood of many electricity grids. In the “Where will renewable energy grow in 2017?” section, India was featured as a leader in solar expansion, but India will also be the world’s leader in new coal capacity. Japan, which has been a member of the Organisation for Economic Co-operation and Development since 1964, recently announced it will pursue additional coal generation as a way to diversify its electricity portfolio.

Japan and India are two examples of how the coal market isn’t shrinking, but that’s not to say the market is expanding globally. If anything, the trend is flat. Chinese coal consumption has leveled off and is likely declining. In 2018, Canada will join the ranks of countries pricing carbon. Last year, the U.K. saw periods where gas and wind forced coal completely out of the marketplace — for the first time since… well, since electric power existed.

If you missed the “7 for 2017: Global Energy Trends” whitepaper, download it here.

The post Expert Perspectives: (More) Global Energy Trends appeared first on Schneider Electric.

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