17 Jun What Is Going to Change Energy Markets In 2020?
By Donna James
The energy industry is evolving, there’s no doubt about that. The global demand for renewable energy sources keeps growing steadily, but it doesn’t look like it’s going to jeopardize fossil fuel producers anytime soon. The two branches of the same industry are still struggling to find the right balance, which is by no means an easy feat.
On the contrary, it’s a long-term process that includes a wide range of smaller steps, with some of them being visible in 2020 already. If we add the COVID-19 pandemic to the equation, we can definitely notice certain disturbances in the energy market.
Now, the real question is what is going to change energy markets this year. We prepared six answers for you.
1. Price volatility
In case you haven’t noticed, oil prices dropped below zero this April as there is simply not enough demand in the age of coronavirus, while producers continue to pump crude from their wells. The price of oil is obviously volatile to the point where it’s impossible to make long-term predictions and business plans.
2. Is there a future for oil rigs?
This energy market trend goes hand in hand with the previous one. Namely, oil rigs are by far the most expensive way to extract crude, which basically means that the current price is killing their profitability. In such circumstances, we can’t help but ask: Is there a future for offshore oil rigs? The way things are developing at the moment, the future doesn’t look so bright.
3. Fossil fuel is resilient
We can see that the energy market is threatening to jeopardize traditional
energy suppliers, but the truth is that fossil fuel remains highly resilient. According to the report from twiftnews, about 79% of the US energy production comes from fossil fuels and 80% of consumption originates from fossil fuels. The fossil fuel production is alive and kicking and it doesn’t look like halting soon.
4. Green energy keeps growing steadily
International organizations, led by the International Renewable Energy Agency, keep pushing the green energy project because of the growing demand for cleaner technologies and CO2 emission reduction.
The story looks more realistic every year since the costs of environmentally-friendly technologies are seeing a stable decline. A study reveals that renewable energy is the fastest-growing energy source in the US, increasing 100% from 2000 to 2018.
5. Flexibility is fundamental
Despite some obvious shifts in the energy sector, we must emphasize that changes don’t take place so quickly in this field. This is why flexibility becomes one of the most important aspects of the business.
The point is simple – producers need to provide energy around the clock, with or without wind, sun, and other sources of green energy. It requires a reliable system of energy storage, interconnectors, and all the other corresponding technologies.
6. New regulations emerge
New solutions demand new regulations, so we are going to see additional legislation efforts in 2020 and beyond. For example, the International Maritime Organization adopted an entire set of new regulations in January, in an attempt to reduce sulfur emissions.
The Bottom Line
Although being inert for decades, energy markets have been showing the early signs of changes in the 21st century. This year promises to be very exciting with all the disturbances caused by new regulations and the COVID-19 pandemic, so it’s important to follow the most promising trends.
In this post, we showed you six trends that are going to change energy markets in 2020. What do you think about the recent energy market developments? Please let us know.
Donna James is a freelance writer and proof-reader in the USA.