Looking Ahead at Q3 2024: Energy Industry Trends, Challenges, and Opportunities
Posted: June 13, 2024
The global energy landscape continues to evolve, marked by innovation, regulatory
shifts, and a collective push towards sustainability. The rise of renewable energy
sources, an international focus on decarbonization, and myriad geopolitical tensions all
underscore the importance of vigilant assessment of energy industry trends on a
global scale. Understanding these trends is important for stakeholders across the
energy spectrum, from government bodies and corporate decision-makers to
individual consumers.
Here, we’ll dissect the global energy trends ahead as we approach the second half of
2024, identifying key developments and their implications for the future of energy.
We’ll explore some of the large emerging patterns informing policies, driving business
strategies, and inspiring innovation within the industry. By assessing these trends, we
offer actionable insights to empower informed decision-making in an ever-changing
energy landscape.
Assessing 2024 Global Energy Industry Trends
Over the past several months, the complexities of the energy market unfolded with a
renewed focus on the diversification of energy sources, the resilience of supply chains,
and the ever-growing role of technology in shaping consumption patterns. With energy
demand projected to grow and diversification efforts gaining traction, the second half
of 2024 will continue to hold both significant potential and profound challenges.
Key global energy trends that seem poised to make a substantial impact this year
include:
Renewable Energy
Renewables like solar, wind, hydro, and biofuels are set to expand notably, thanks to
their increasing affordability, dependability, and availability. Renewable energy is set
to generate nearly 25% of American electricity this year; by 2030, the US could see up
to 850 gigawatts of new utility-scale solar, wind, and storage installations, driven by
increased federal funding and tax incentives.
Energy Storage
Advancements in energy storage technologies—including batteries, pumped hydro,
and hydrogen—are vital for managing the fluctuating nature of renewable energy.
These technologies supply backup power, grid services, and load shifting. The demand
and use of energy storage seems likely to continue increasing as efficiency improves
and supportive policies and regulations emerge.
Government Policies
Many governments globally have introduced policies to support renewable energy
transition, including subsidies, tax incentives, and renewable energy targets or
mandates. In the US, renewable energy demands continue to rise as states, the federal
government, and large companies strive to achieve identified decarbonization targets.
The current presidential administration aims to reduce US greenhouse gas emissions
by 50–52% from 2005 levels by 2030. However, with no dramatic legislation likely in
the run-up to November presidential and congressional contests, the rule of thumb is
generally to look to the regulators, rather than the legislators, during electoral cycles.
Internet of Energy (IoE)
The Internet of Energy (IoE) refers to the modernization of electricity infrastructure,
enabling advanced data and analytics, increased connectivity, and automated
management of energy resources. It encompasses the integration of smart grids with
renewable energy systems, energy storage, and IoT (Internet of Things) devices; these
technologies facilitate the flow, management, and analysis of energy in a responsive
and intelligent manner.
By leveraging the principles of the internet—connectivity, communication, and open
information exchange—IoE aims to optimize energy consumption, improve the
reliability and security of energy systems, and support the widespread adoption of
renewable energy.
Quantum Computing
Quantum computing performs calculations at speeds exponentially faster than the
most powerful classical computers. In the context of the energy sector, it has the
potential to drive significant advancements across energy optimization, materials
discovery, carbon capture and storage (CCS), and cybersecurity.
While quantum technology itself is an emerging field, investments, and research to
advance the field in 2024 are ongoing, with pilot projects showcasing the potential
impacts of quantum computing on energy systems.
Renewable Energy in 2024
Renewable energy adoption has been expanding worldwide, though the pace and
scale of adoption vary significantly across different regions. Opportunities for
renewable energy continue to grow with increasing cost-competitiveness,
technological innovations, and rising environmental concerns.
Solar and wind power have particularly seen substantial growth, forming a significant
part of the energy mix in many countries. Hydropower remains a major source of
renewable energy, though its growth is slower due to environmental and social
concerns.
Technological advancements have led to a significant reduction in the costs of
renewable energy technologies. Improved affordability makes renewable energy
competitive with—and in some cases cheaper than—fossil fuel-based energy sources.
Energy industry trends show increased investment in renewable energy projects from
both public and private sectors, as companies are increasingly committing to
renewable energy to power their operations. Apple, Amazon, and Microsoft, for
instance, are on course to run their operations entirely on renewable energy by 2025.
The growth of electric vehicles also provides a significant opportunity for the
expansion of renewable energy to power the transportation sector, further reducing
reliance on fossil fuels.
But despite the significant headway in renewable energy adoption, there are still
considerable challenges to address.
Challenges
Intermittency, infrastructure, and market barriers remain major challenges for the
renewable energy sector. Solar and wind power are fairly intermittent sources of
energy, creating challenges for grid stability without significant investment in storage.
Despite substantial progress, energy storage technologies like batteries are still
relatively expensive; their capacity and duration limitations also hinder the ability to
fully leverage renewable energy sources.
Currently, many energy grids are not designed to accommodate high percentages of
renewable energy. Upgrading infrastructure to handle distributed and intermittent
power sources is necessary—but costly. In addition, regulatory frameworks in some
regions have not kept pace with technological advancements. This creates barriers to
the integration of renewable energy into existing systems.
The renewable energy sector can also be affected by supply chain disruptions, such as
those caused by geopolitical tensions. This may impact the availability of raw materials
and components.
Market Implications of Geopolitical Issues
Conflict in the Middle East and Ukraine, a year of elections around the world, and rising
regulatory uncertainty in natural resource sectors, are refocusing attention on political
risks in commodity markets.
Tensions in the Middle East—a region responsible for one-third of global seaborne oil
trade—caused market unrest at the beginning of 2024. American and British airstrikes
in retaliation to Houthi attacks on tankers in the Red Sea sparked fears of conflict
escalation and potential disruptions to essential oil trade routes. Although oil and LNG
output remains unaffected, an increasing number of shipowners are rerouting their
cargoes.
Assuming no major interruptions in oil supply, the market is expected to remain
adequately supplied in 2024. Non-OPEC+ production growth is projected to exceed the
increase in oil demand comfortably. The International Energy Agency (IEA) can take
decisive action to stabilize the market if a supply disruption occurs, leveraging its
collective emergency reserves of around 4 billion barrels, which include 1.2 billion
barrels of government-controlled emergency stocks. This strategic reserve serves to
calm market concerns and provide reassurance to governments, industries, and
consumers.
Looking at longer-term implications, we will continue to see a concerted push toward
low-carbon economies as countries try to meet the specifications laid out in the 2015
Paris Agreement (and similar accords). This transition has a multiplicative
effect—stimulating investments in renewable energy and clean technologies, while
potentially depreciating assets tied to fossil fuels. The shift could prompt a reallocation
of capital, disrupting traditional energy markets and influencing pricing structures.
Embracing Innovation in the Energy Transition
As we navigate through the complexities of global energy industry trends, we stand at
a crossroads of challenge and opportunity. The industry needs to embrace innovation,
invest in sustainable practices, and adapt to geopolitical forces. Gilmore keeps a
steady eye on transition progress, providing flow control solutions that bolster energy
efficiency in oil and gas production. Our team of expert engineers prioritizes safety,
operational efficiency, quality, and reliability—while striving to offer the best pricing
strategy.
Connect with us to find out how our global distribution network can help you reduce
operational costs and improve productivity in your energy operation.
