The clean energy technology (CET) sector is undergoing significant growth and transformation in 2024. S&P Global Commodity Insights, a leading provider of information and analysis for the energy and commodities markets, has released its latest report on the top trends in clean energy technology for this year. The report highlights key developments and investments that will shape the future of the industry.
Trend 1: Clean Energy Technology Investment on the Rise
According to the report, investments in clean energy technology are projected to increase by 15% in 2024, reaching nearly $800 billion. Solar energy will lead the way, accounting for 55% of total investment. Policy initiatives, particularly in new technologies like carbon capture and storage (CCUS) and hydrogen, will be the key drivers of these investments.
Trend 2: Declining Costs of Clean Energy Technologies
The average cost of adding clean energy technologies to power grids is expected to decline by 15% to 20% by 2030. Falling raw material prices and oversupply are driving down costs for solar and batteries. However, emerging technologies like green hydrogen and CCUS have seen cost increases.
Trend 3: Decarbonization Efforts by Manufacturers
Renewable energy manufacturers are increasingly focusing on decarbonization across their value chains. They are developing strategies to lower emissions in their products and decarbonize operations. This trend aims to increase transparency and traceability in renewable supply chains and materials.
Trend 4: Price Wars and Consolidation in Solar and Storage Manufacturing
Solar and battery manufacturers are facing lower margins due to oversupply and price drops. Downstream players like distributors and installers are burdened by high inventories and declining prices. This situation has led to a price war and market consolidation. Smaller manufacturers may face negative gross margins, while larger manufacturers will need to differentiate themselves through innovative products or exceptional pricing decisions.
Trend 5: Record Auctions for Offshore Wind Capacity
The offshore wind sector is expected to reach an “unprecedented milestone” in 2024, with over 60 GW of new capacity set to be auctioned in at least 17 markets. This surge in auctioned capacity demonstrates the growing commitment to offshore wind energy and presents both challenges and opportunities for the global wind turbine supply market.
Trend 6: Increasing Competition in the Wind Turbine Market
Chinese turbine manufacturers are increasingly competing against Western counterparts in international markets. Lower prices, technological innovation, and new supply chain investments have given Chinese manufacturers an edge. This competition poses challenges for Western turbine makers, who need to regain profitability while safeguarding market share.
Trend 7: Growing Interest in Low-carbon Hydrogen
Hydrogen is gaining global interest as a feedstock for ammonia, synthetic methane, and synthetic liquids. Subsidies and mandates are driving investment in green hydrogen production. Denmark and the Middle East are among the regions leading the way in green hydrogen facilities and production.
Trend 8: Technology-based Carbon Dioxide Removal (CDR)
Carbon dioxide removal (CDR) technologies are experiencing rapid development and funding. Verification methodologies and certifications for technology-based CDR are being established, reducing uncertainty for potential buyers. The market is expected to see a significant increase in projects in 2024, driven by government support and funding.
Trend 9: Streamlining Renewable Power Development
Efforts to alleviate grid congestion and permitting constraints are underway to streamline renewable power development. Grid-connection delays and congestion are major bottlenecks for renewable deployment worldwide. Higher investments in transmission and distribution (T&D) and storage, as well as the facilitation of other renewable technologies, are key strategies to overcome these challenges.
Trend 10: Increased Demand for Flexible Power Systems
With over 1 TW of wind and solar installations expected in the next two years, there is a pressing need for more flexible power systems. Power systems highly dependent on intermittent renewable generation require increased flexibility assets such as storage and demand response. Transmission system operators (TSOs) will be required to assess flexibility needs by 2025, driving additional large-scale energy storage procurements.
FAQs
Q: What is the projected investment in clean energy technology for 2024?
A: The report forecasts a 15% increase in clean energy technology investments in 2024, reaching nearly $800 billion.
Q: Which renewable energy source will receive the largest share of investment?
A: Solar energy will enjoy the largest share of investment, accounting for approximately 55% of total investment.
Q: What are the key drivers of clean energy technology investments?
A: Policy initiatives, particularly in new technologies like carbon capture and storage (CCUS) and hydrogen, will be the primary drivers of clean energy technology investments.
Q: What are the expected trends in offshore wind capacity auctions?
A: The upcoming year is set to witness an unprecedented milestone, with more than 60 GW of new offshore wind capacity auctioned in at least 17 markets.
Q: How are manufacturers addressing decarbonization?
A: Renewable energy manufacturers are focusing on decarbonizing their products and operations, aiming to increase the transparency and traceability of renewable supply chains and materials.
Q: How will transmission system operators (TSOs) contribute to flexible power systems?
A: TSOs will be required to assess flexibility needs from 2025, driving additional large-scale energy storage procurements to ensure balanced supply and demand in power systems highly dependent on intermittent renewable generation.
Conclusion
The trends outlined in the S&P Global Commodity Insights report indicate a promising future for clean energy technology. With increasing investments, declining costs, and efforts to decarbonize manufacturing and power systems, the clean energy sector is poised for growth and transformation in 2024 and beyond.
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