Green transition and digitalisation to shape energy market trends for 2022

Despite COVID-19 hindering energy sector trends that were likely to accelerate the energy transition, some positive developments have been recorded in 2021. What does 2022 hold in store for energy stakeholders?

Answers to this question were provided during a webinar entitled Top 10 Global Economic Trends for 2021 and 2022 hosted by research firm Frost & Sullivan. Participants were asked to highlight trends that they believe will have the most significant impact on the energy market in 2022.

50% highlighted decarbonisation and the green transition, whilst 36% said digital transformation. 9% said they think everything as a service will have the most significant impact.

Commenting on the results, Aroop Zutshi, global president at Frost & Sullivan, said he was not surprised by the results.

Zutshi said: “Companies that embarked on digital transformation were able to manage the pandemic more than those that are not digitally enabled. Digital transformation will continue to play an important role in the next year and years to come and will be forced on any organisation going forward.”


Zutshi said he anticipates the adoption of electric vehicles (EVs) to increase in Europe, North America, and Asia as the green recovery takes priority.

Zutshi also believes Europe will hold a lion’s share of the new EV market in 2022 whilst China will be the world’s largest single market.

The US will ramp up its EV production in chase of President Biden’s plan to have EVs account for 50% of all vehicle sales by 2030. However, the shortage of chipsets will continue in 2022 and will slow down EV manufacturing at a global scale, he said.

Renewable energy and decarbonisation

Supply chain constraints of components for wind and solar energy projects will continue through the first half of 2022 resulting in delays in project rollouts, according to Zutshi.

However, he said he expects OEMs and suppliers of components to recover from the supply chain disruptions caused by the pandemic by employing various digital mechanisms.

He said the decarbonisation of the global economy and hard-to-abate industries will intensify with an increase in the deployment of hydrogen, electrification technologies and energy efficiency.

Digital technologies and the green recovery

Zutshi said governments will continue to incentivize the ESG agenda whilst “digital sustainability will shape the resilience of water utilities and reduce emissions.”

He said environmental-conscious consumers will demand smart products, resulting in service providers aligning their operations with eco-friendly business cases, technologies and resources.

Neha Anna Thomas, senior economist at Frost & Sullivan said she expects advanced economies to expedite green recovery policies in 2022.

Other trends Frost & Sullivan predicts will shape 2022 include:

  • An increase in 5G use as modernisation speeds up. Energy companies will also continue to adopt cloud computing.
  • More cybersecurity solutions will be deployed to address the increase in attacks. Governments and utilities are expected to put more focus on the development of innovative and resilient solutions.
  • The construction of green buildings will grow driven by national carbon-neutrality targets.
  • In Africa, foreign investments will create opportunities in green hydrogen production whilst national targets and regulatory changes will improve the participation of the private sector and international companies in renewable energy projects.

Some key trends that were witnessed in 2021 are expected to set the stage for 2022. For instance, the positive developments in 2021 around policy, regulation, and commitments by governments to support the move to low-carbon energy-based economies.

Examples of these policy commitments include the enacted Fit for 55 law by the European Commission, the approval by the US Senate of President Joe Biden’s $1 trillion infrastructure bill, the introduction of the Green Hydrogen Strategy by the UK government and targets that were set by the US government to reduce the cost of long-duration energy storage systems and accelerate wind and solar energy deployment.

Governments, utilities and energy stakeholders are expected to embark on measures that enable them to move closer to achieving goals set in 2021.

Negative developments such as the first increase in prices across all solar energy market segments since 2014 in the US and soaring energy prices in Europe are also expected to push governments to come up with innovative ways to address them.

This article was originally published on Smart Energy International


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