Revisiting our 2024 trends forecast
Abby L. Watson
Co-Founder and President - systems thinking strategies for climate and sustainability
?The close of the year approaches and as we take stock of all that has happened, the progress made and goals unmet, it never ceases to amaze me how it feels like life manages to accelerate, year after year.
The magic of these early winter moments is due in large part to their liminality. The planet stands on the cusp of a biannual solar shift, and human societies and systems across the globe mark this particular shift as the start and end of the endless cycle, the transition from one calendar year to the next. One can clearly see the historic influence of Northern Hemisphere geopolitical actors within this rhythm. So much of Western and European culture was influenced by the impact of seasonal shifts on an agrarian society. We observe the transition from one year to the next in December and January because in the Northern Hemisphere that's when the sun reached its minimum and began its return. Of course, the Southern Hemisphere experiences quite the opposite. I wonder if it feels odd to mark a "new year" at a time when the sun begins dying rather than being reborn.
For many in the world of business and government, this is a natural period of reflection and anticipation. At The Groundwire Group , we've begun thinking about the key trends we think we shape our climate landscape in 2025, and looking back on how our themes for 2024 have played out. Here's a download on how things have landed based on the key themes we identified in our report Macro Meets Micro: Deciphering Renewable Energy Trends in 2024.
Theme 1: Water and Commerce
Early in 2024, we identified risks to the insurance market and global trade as a result of water-related issues. Throughout the year we monitored the media environment, archiving different stories related to our key themes. This theme absolutely dominated the tally. In the first half of 2024, Panama canal drought and military tensions along the Suez continued apace, while a container ship accident that killed six people and shut down the Port of Baltimore for over a month drew a line under our reliance on water-based transport to facilitate global commerce, and its risks.
The biggest story, though, was the story of rain, and how extreme precipitation events are driving insurers to the brink of insolvency.
2024 kicked off with devastating flooding events in Maine, Vermont, and the Northern Plains, while later, a hurricane dumped a 1 in 1000-year flood atop mountainous North Carolina, hundreds of miles from the coast. The National Weather Service issued a record 91 flash flood emergencies this year, as the U.S. saw more flooding events in a single year than ever recorded. Of course, the United States was not alone in this: Mexico, Spain, Vietnam, Chad, and Myanmar all experienced record-breaking floods that killed thousands of people and destroyed entire regions. Is it any wonder that insurance companies are creaking under the strain? In the past two weeks alone, prestige news outlets like The New York Times, The Washington Post, and The Guardian have all published feature articles about American homeowners struggling to insure their homes.
Meanwhile, my local area experienced a rare phenomenon that became truly unsettling over time: a stretch of nearly 60 days this autumn without any measurable precipitation. Day after day, the sky felt like an intense blue dome overhead, with October temperatures often edging into t-shirt weather - not normal at all for a Philadelphia autumn. For the first time in my 20 years in the area, we experienced a region-wide drought severe enough to prompt a water conservation notice. Our precipitation debt could take over a year to repay.
These types of extreme swings in precipitation will only become more typical, which will almost certainly become a planning problem for future energy systems heavily reliant on hydroelectricity. That's not dampening the enthusiasm with which many advocates and energy wonks greeted December's biggest energy story: an agreement between Quebec and Newfoundland and Labrador on a new 50-year contract for energy from the Churchill Falls hydroelectric plant, setting the stage for a further 3+ GW of hydroelectric generating capacity to be developed.
Theme 2: Interest Rates and Unemployment
We mapped out the various structural factors working against the Federal Reserve's goal for lowering inflation and our assessment remains unchanged: tight labor supply and strong consumer spending point to a risk that inflation could take off again at the drop of a hat. The Federal Reserve appears to feel the same way. While the Fed began to reduce interest rates in 2024, they did so cautiously, with three small cuts since September. Potential new restrictions on immigration or tariffs on imported goods will only increase the inflationary pressures working against the Fed's goal, which likely contributed a recent shift in expectations for future rate cuts. Federal Reserve officials signaled broad expectations for only two rate cuts in 2025. Has the much-ballyhooed "soft landing" been achieved? Only time will tell, but it appears they might be on the right track, if a lengthy one.
The challenge these macroeconomic conditions present for renewables also remains unchanged, perhaps even worse than we expected early in 2024. Our fears that the pressures on household budgets are nearing a breaking point were well founded. Household debt in the U.S. reached a record high $17.94 trillion in 2024, and while incomes have made bigger gains thanks to labor market conditions, credit card delinquencies are at their highest rate in over a decade. Energy consumers in some states saw their average monthly electricity bill increase more than 15% from 2022 to 2023, and disinformation actors are already falsely blaming these increases on renewables. Looking ahead, we can expect to see plenty of proposed bills in state legislatures looking to address utility rate increases, and energy advocates need to think really strategically about how we address the need to make significant reliability investments in our grid. It's a bad time to be making up for deferred maintenance, but here we are. What can we do to limit the burden on households and develop the educational foundation among the public we need to counter disinformation?
Labor shortages remain a fact of life, and one that I see around me every day. Reporting on Wood Mackenzie's analysis indicates that labor and equipment shortages delayed roughly 53 GW of U.S. solar and energy storage projects in 2024. Stricter immigration measures and deportations will further limit the supply of labor in key areas of the U.S. economy, and the most crucial roles in areas like the electrical trades require several years of training. Project developers who expect to build projects in the coming years should begin thinking early about their labor supply strategies and associated housing needs.
Theme 3: Trust and Verification
Our 2024 trends forecast signaled an impending inflection point in the digital world. Artificial intelligence, machine learning, and large language models are rapidly transforming entire industries, especially those associated with online communications. While AI's impact on energy demand grabbed most of the headlines and rapidly became one of the most relevant factors driving transmission and energy system planning, the risk factors we flagged for public trust in renewable energy development and sustainability efforts are playing out mostly as expected.
We had feared that AI-augmented communication campaigns would be weaponized in the 2024 election cycle and could be used to sow distrust in the outcomes. While the U.S. election had plenty of dramatic twists and turns to keep us on our toes, AI-generated disinformation seemed to play a less prominent role than we anticipated. That said, new generative AI technology seems to be contributing to a kind of subversive shift that's more difficult to articulate.
Life in 2024, especially for younger people, is lived online. More than three-quarters of American adults report using YouTube in Pew's recent survey, and around half are users of Meta's Facebook and Instagram sites. While bot accounts have plagued social media spaces for years, AI-enhanced tools and content generation capabilities are enabling an explosion of internet garbage. Images of impossibly cute animals that look almost-real, scammy stories about orphans with pitiful images of a child in the rain, creepy videos of imaginary animals squirming about. Google search, so dominant it has been deemed a monopoly, now uses AI to suggest answers to your questions, and finding a trustworthy-seeming primary source requires scrolling past more and more sponsored links and sketchy information aggregators.
Distrust and paranoia are the obvious fruits of such a rich environment. It is becoming increasingly difficult to trust what we see, and people seem less inclined than ever to believe what those in positions of authority say is true. The recent drone panic in New Jersey is a perfect example of how easy it is becoming to stoke fear among the public. Failures within our institutions to communicate transparently with the public contribute to the sense that an elite class routinely withholds or manipulates information to protect their own interests. Citizens in Venezuela took matters of transparency into their own hands during this year's election and built a volunteer network to count every single vote - the ruling authoritarian party still sits in office despite all evidence of a sound electoral defeat.
How we communicate is how we define the world. It is the single greatest evolutionary advantage of language, the sharing of information about the world beyond ourselves. Our shared humanity can help us establish the trust and common context necessary for communication to become information that builds knowledge, even across enormous cultural and linguistic barriers. The difference we have seen in the quality of widely-available generative AI tools in a single year is astonishing. How this powerful technology shapes our future depends on how we respond collectively to the way it has already begun to influence our culture.
Bonus holiday listening: