2022 Recap, Energy Transition in 2023, Energy Storage Trends, Transition Metals, EV Race & Circular Economy Rankings
Guillaume Fouché
Business Leader Latin America, Caribbean, US Mid-Atlantic & South East @BloombergNEF | Co-Founder & Board Member @AMIVE | MBA | Clean Energy, Mobility & Sustainability
Hi, Happy New Year 2023 and welcome to the 10th edition of?The Race to NetZero?Newsletter, a monthly round-up of the best research and news from?BloombergNEF.
Our analyst team has been pretty busy in this first month of the year, find some of their best work below:
2022 Recap: A Year of Breakthroughs and Setbacks for the Race to Net Zero, in Five Charts
It’s been a mixed year for the race to reach net-zero emissions. While combating climate change has been near the top of the agenda, governments, companies and individuals have been more focused on how to deal with surging inflation and an energy crisis sparked by Russia’s invasion of Ukraine.
Against that turbulent backdrop, progress worth celebrating has been made. There are more electric cars on the world’s roads than 12 months ago, more solar panels and wind turbines in operation and development, and more ambitious policies have been set out – not least the landmark climate legislation passed in the US in the summer.
But we’ve also seen a dash for gas and coal in a bid to shore up energy security, a somewhat damp squib of a COP27 summit, and a series of extreme and devastating weather events that underscore the need for urgent action to slow global warming.
The pressures seen this year will undoubtedly remain in the spotlight in 2023, potentially exacerbated by recessions. Here are five charts from BloombergNEF taking stock of the energy transition and what could lie ahead.
1. Renewables are continuing to get cheaper, undercutting fossil fuels
2. Clean energy capacity is growing, but not fast enough for net zero
3. Peak fossil fuels won’t be enough if consumption doesn’t fall dramatically
4.?Carbon markets could be key to the pivot from fossil fuels, but prices need to rise
5. Batteries haven’t been immune to the inflation crisis in a blow to EVs
Energy Transition in 2023: Into a New Era
The outlook for low-carbon transition continues to look extremely bright. Globally, BNEF expects clean power capacity additions to increase by at least 18% in 2023, shrugging off supply chain woes and interconnection delays to hit yet another all-time record at more than 450GW.
Clean energy is more cost-competitive than ever as fossil fuel costs remain elevated, and renewable costs are now resuming their long-term decline, with the global average levelized costs of onshore wind?falling?6.3% from 1H to 2H 2022, offshore wind falling 10.2%, and fixed-axis PV falling 1.7%. Supply chain constraints are easing and prices of key inputs, such as polysilicon, nickel and cobalt, are down. Electric vehicle sales are continuing to ramp up, and are projected to hit 13 million in 2023, up from around 10 million in 2022 (more, if you include buses and medium/heavy-duty vehicles). Clean hydrogen will be cost-competitive sooner than expected, thanks to elevated fossil fuel prices.
Sustainability commitments from companies and financial institutions remain at an all-time high, and our conversations indicate that these are here to stay, in spite of a few high-profile controversies. The setting of new Science-Based Targets, in particular, hit a new record in 2022, and many more governments are taking steps to promote corporate climate-risk disclosure.
Clean energy policy-making is alive and well, too. The US Inflation Reduction Act (IRA), the single most consequential development in the global energy transition last year, will direct massive investments into clean energy technologies in the coming years, and help drive scale into nascent technologies like hydrogen and carbon capture. The EU has reached agreement on the Fit for 55, RePowerEU and carbon border adjustment mechanism, setting the scene for faster decarbonization across the bloc. Elsewhere, Brazil ejected its Amazon-slashing incumbent president, Australians continued to vote for faster climate action, and Indonesia and Vietnam are attracting international finance with their accelerated decarbonization plans.
So if 2023 marks the start of a new era in the low-carbon transition, it won’t be an era characterized by any sort of slowdown. Quite the opposite: the transition will only accelerate and expand. But this acceleration will take place against a profoundly changed backdrop, characterized by four new dynamics: countries in competition; energy security at a premium; a more transactional transition, and the delivery imperative. Let’s unpack each of these dynamics.
Top 10 Energy Storage Trends in 2023
At the beginning of each year, we pause to reflect on what has happened in our industry and gather our thoughts on what to expect in the coming 12 months. These 10 trends highlight what we think will be some of the most noteworthy developments in energy storage in 2023.
Transition Metals Become $10 Trillion Opportunity as Demand Rises and Supply Continues to Lag
领英推荐
Demand for key metals needed for the deployment of energy transition technologies such as solar, wind, batteries and electric vehicles will grow fivefold by 2050, under BloombergNEF’s so-called Net Zero Scenario. Supply, on the other hand, is constrained due to a lack of investment, increasing country risk toward mining, and ever more depleted reserves.
Country risk remains the key barrier to the development of new mining projects. The global economic slowdown and the need for countries to secure supplies of critical metals have led to the resurgence of resource nationalism and higher resource taxes. These interventions slow down investments in new mines. Given the importance of these metals to the energy transition, governments must strike a balance between meeting the immediate needs of their local economies and the long-term ambition of a global net-zero future.
2H 2022 Levelized Cost of Electricity Update
Global supply chain pressures have started to ease and key commodity prices are cooling off after a tumultuous 18 months. However, the inflationary effects are still catching up with renewables projects financed in 2H 2022 and some key commodities remain stubbornly high. In addition, new macroeconomic challenges have emerged. Inflation is at multi-decade highs and central bank interest rate rises are hitting capital-intensive renewables and storage projects hard. A strong US dollar has further weakened the purchasing power of equipment importers, leading to cost rises in several markets.
China’s BYD Winning 2022 Electric Vehicle Sales Race
The electric vehicle superstar of the year is China’s?BYD, with sales well past a million units and still?going strong.
The often asked question is: “Is it already ahead of?Tesla?” The answer is yes, and no.
BYD beats Tesla if plug-in hybrid electric vehicles (PHEVs) are included along with battery electric vehicles (BEVs). If only pure BEVs are counted, Tesla remains ahead for now.
“BYD shows the advantages of focusing on only one kind of drivetrain – electric,” said Corey Cantor, BloombergNEF’s lead EV analyst.
BYD?stopped production?of fossil-fuel vehicles in March. Sales outside China are minuscule for now, but that could change soon. The company has been extending its sales network in several Latin America countries, and recently?signed?a land purchase deal to build an EV production plant in Thailand.
The Leaders and Laggards in the Quest to Reach a Circular Economy
As the world continues to grapple with its plastic waste crisis, BloombergNEF’s annual Circular Economy Ranking reveals the companies that are leading the charge to develop more sustainable packaging and those that are falling behind.
Based on their strategies and ambition to transition to a circular economy, Colgate-Palmolive, Coca-Cola and Pepsi are the top three brand owners, while Borealis, Braskem and Dow are at the front of the pack among plastic producers.
BNEF has once again assessed 40 companies in total, comprising 20 brand owners and 20 plastic producers. Some 35 of these firms now have net-zero emissions targets, with Oreo maker Mondelez, brewing giant AB InBev, and oil major ExxonMobil among those announcing new commitments since late 2021.
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I hope you all enjoy a great 2023!
Best Regards, Saludos, Cordialement
Guillaume
Head of Business | Utilities & Energy | Global Market | Energy Transition | Renewables | Business Development & Sustainability | Compliance & Governance | Capital Strategy | Driving Sustainable Investments in Energy
1 年Hola Guillaume! Would be a great approach to see a deep dive on network role in energy transition.?New behaviors of prosumers, bidirectional flows, needs for hosting capacity, will be strategic issues to face which make the DSO role a key driver in Energy Transition.
Emerging Technology Business Development
1 年What is net zero?
A comparative analysis by type of lithium battery technology would be interesting, e.g., the LFP battery does not use nickel or cobalt, an alternative with lower mineral costs, whose mass manufacturing will occur after the partial release of the patent in 2022 and total by 2025, its production outside of China will bring competitiveness to western-made EVs
Director Comercial | Director Financiero | Director General | Banca Empresarial | Banca de Consumo| Coach Ejecutivo
1 年Pareciera que el precio se estabilizó en estos últimos tres a?os. Se necesitará alguna acción disruptiva para continuar con la eficiencia Francisco Cabeza Santillana?