Last year was a big year for the energy sector. The war in Ukraine, a rise in post-pandemic industry activity, low gas reserves, and high rates of inflation all combined to cause surges in the price of fuel and an energy crisis that has affected millions. Read here for the 2023 renewable energy industry outlook.
That energy crisis is set to continue. In the short term, that’s not great news for your energy bills, but it does mean renewable energy is emerging as not just the more sustainable energy source, but as the more secure and affordable one too.
In the UK last year, solar, wind, and hydro generation increased by 29% on the year before. In the same period, globally renewable power capacity rose by a quarter. All signs point to continuing growth in the renewable energy industry, but let’s take a closer look at the outlook for 2023.
Renewable Energy Growth In 2023
In response to Russia’s invasion of Ukraine, the European Union has committed to phasing out Russian fossil fuel imports. America is also imposing sanctions. For European and American energy markets, this means there’s an energy gap that needs to be filled.
Meanwhile, China is re-emerging from COVID-19 restrictions, and we’re likely to see a rebound in gas demands as Chinese industries reopen, putting further strain on global gas markets.
Europe also experienced a relatively mild winter in 2022. This conserved some gas reserves and bought some time, but a cold snap this coming winter could see demand outstrip supply.
This all adds up to one thing: energy insecurity. According to the International Energy Agency, energy security is likely to be a key driver in renewable energy growth.
Ford Garrard, CEO of energy recruitment firm Visuna, said: “Alongside energy security, a core driver for renewable energy is the need for businesses to have price certainty. We’re also seeing investors and consumers push for brands to improve their green credentials, meaning the demand for renewable energy is only continuing to grow year on year.”
Let’s take a look at how some of the key renewable industry sectors are performing in 2023.
1. Solar Is Soaring
Solar energy is tipped to be the fastest-growing renewable energy segment in 2023. According to Bloomberg Intelligence, demand is predicted to increase between 20% and 30%, and industry-wide revenue is expected to pass $220bn. We’re likely to see more domestic and business uptake of solar panels as individuals look for greater energy security and cheaper energy costs. Globally, photovoltaic manufacturing is set to diversify as America and India provide subsidies to compete with Chinese manufacturers.
2. Wind Power Is Scaling Up
Growth in wind power is set to continue in 2023, with wind energy capacity estimated to almost double by 2027. The UK is leading the charge in offshore wind power and is continuing to invest in offshore projects. Globally, the viability of floating offshore wind farms is a critical area of interest, and we’re likely to see investments and upscaling of these projects.
3. Storage And Grid Capacity Is Key
Developments in renewable energy storage and grid capacity will support increased growth in renewable generation. In 2023 we expect to see the commercialisation and adoption of diverse energy storage solutions, like compressed air storage and long-duration batteries.
In 2022, the UK Government also announced £22.2bn of funding for distribution network companies. They’re expected to invest in improvements to grid capacity and support the transition to more home-grown, renewable energy sources over the next five years.
4. Investments In Renewable Technologies
In traditional fossil fuel-based industries, investments in renewable and clean technologies are also set to continue. This includes carbon capture storage (CCS) techniques used in industrial processes like steel production and power generation from fossil fuels.
The need for energy security is likely to give a significant boost to the renewable energy industry over the next year and beyond. European and American markets need to source alternatives to Russian gas imports, and growing industrial demands in China, India, and Africa have highlighted the need for more local, secure, sustainable, and renewable energy sources.
In response, many countries have strengthened investments, financial support, and policies for renewable energy, increasing its commercial appeal.
The expected boom in the renewable energy industry this year and into the next decade means businesses need to start investing now, both in renewable technologies and in the right talent to meet the demands of a growing green industry.
Ford Garrard adds: “With growing demand for renewable technologies, storage and infrastructure, we’re likely to see more businesses invest in or pivot towards renewable energy in 2023. With strong growth in renewable technology sectors, it should be a priority for individual businesses, and the sector as a whole, to upskill and invest for the future workforce.”
The future of energy is renewables. Going green is no longer the more sustainable but expensive option, it’s the smart choice for long-term security and affordability. For businesses that want to stay ahead, the time to embrace that transition is now.