As 2021 kicks off with growing optimism that the end of the COVID-19 pandemic could be close, much of the world’s attention should again be turning to the ongoing climate crisis. Between the record number of wildfires in the U.S., the continued warming of the Arctic, and ever-increasing ocean-surface temperatures, the urgency of our predicament is well understood by policymakers, businesspeople, and the public at large.
This year will be a pivotal one in our efforts to mitigate, contain and, ultimately, reverse greenhouse emissions, the major contributor to global warming. With a new U.S. administration pledging major investments in sustainable energy, and many state governments taking significant steps of their own, expect a torrent of activity on the sustainable energy front in 2021, leading to promising developments in both innovation and the economy.
A lot can happen in a year—especially one with as much change and potential global impact as 2021 will have. Here are four ways our collective efforts to grapple with climate change will impact society and the economy in 2021.
1.Extreme weather events will continue to cause significant disruptions to the energy grid.
The reality of climate change was impossible to ignore in 2020. The wildfires that scorched much of the American West set new records in both number and amount of acreage burned, while the country as a whole saw more extreme weather events than ever. Climatologists expect these events to increase in both frequency and intensity in 2021, putting enormous stress on our domestic energy grid.
In response, utility companies will look for new ways to stabilize our energy infrastructure, reduce the impact of extreme weather events, and put us on a path to a more sustainable energy future. Enel X is paving the way for technology, including demand response, energy storage, and electric vehicle smart charging, to improve energy reliability during times of stress on the grid, such as heat waves and cold snaps. Pairing these solutions with renewables and furthering the development of microgrids also holds potential for enhancing energy resiliency during natural disasters and other power interruptions.
2.The role of storage in achieving a 100% renewables electric grid will grow.
The declining cost of battery storage—and substantial improvements in battery technology—will help enable the transition to a fully renewable electric grid. Battery storage gives electric-grid operators and utilities access to stored energy to be delivered when needed, such as during periods of high electricity demand or to smooth the supply of electricity from renewable energy plants to grid. Driven largely by investments in the electric vehicle sector, battery storage has now reached the point where it is making solar and wind stable and reliable energy alternatives to oil and gas. The sector overall is predicted to reach $546 billion in annual revenue by 2035 according to Lux Research.
Storage is also becoming a more viable option for companies that want to improve their energy sustainability while reducing energy costs by combining solar plus storage. In these systems, batteries store energy produced when the sun is shining and release that energy when it’s needed. This has two important benefits for organizations:
- They can tap into that stored energy to avoid using electricity from the grid when it is most expensive, and
- They can be compensated by the local utility for discharging stored energy when needed by the grid operator such as during demand response events.
For example, Enel X is helping the University of Massachusetts Boston meet its sustainability goals with a system that integrates a number of emerging clean-energy technologies on the campus, including a solar photovoltaic system on the top of the school’s parking garages, a lithium-ion energy storage system that provides reserve power when the sun isn’t shining, and JuiceBox electric vehicle (EV) chargers to support EVs.
3.Major investments in electric-vehicle infrastructure will have positive effects throughout the economy.
General Motors plans to hire 3,000 new employees to develop EVs underscores the enormous role U.S. automakers have in the transition to zero-emissions transportation. With the pending releases of new electric trucks and SUVs, combined with federal support for building EV infrastructure, consumer demand for EVs will continue to increase as that infrastructure becomes even more sophisticated and available. Meeting this growing demand will support original equipment manufacturers’ efforts to expand their product mix into cleaner alternatives, such as pickup trucks, leading to an uptick in job creation in cutting-edge, specialized fields.
4.Companies of all sizes will re-evaluate sustainability commitments as the world’s largest companies audit their supply chains.
Many companies have publicly set ambitious goals for moving to zero or near-zero emissions within the next decades. A critical part of fulfilling that goal will be looking at companies downstream in the supply chain and pushing them to reduce their own carbon footprint.
Companies in sectors such as agriculture, manufacturing, steel, and transportation shouldn’t just prepare for this kind of scrutiny—they should be ready to meet the challenge. By committing to transparency and adopting best practices, companies can ensure that they will not lose business going forward to rivals that can make these commitments.
It’s clear that 2021 will be critical in many ways. While major challenges are still ahead, there are many reasons to be optimistic that a year from now we will be on a clearer path to a clean energy future, with the energy transition driving economic recovery and growth.