The crisis may even accelerate new energy trends
Businesses in 2021 are entering an entirely new marketplace that has been indelibly shifted by the pandemic reality. Most industries have already seen extreme changes to business operations - and the energy sector is no exception. While some of the trends the world is witnessing in energy were already well in the works prior to COVID-19, many of those have pressed on in spite of hurdles created by the pandemic - and in some cases, the challenge posed by the global crisis may even serve to accelerate some of them. To get an idea of some key energy trends already changing the business landscape, and expected to make even greater waves in the future, we take a closer look here.
In recent years, the energy sector has witnessed a distinct shift towards carbon-free, clean, and renewable energy sources to meet a global demand from both the wider public and many industries to help protect the environment. This demand has prompted the governments of many nations to create policies requiring businesses to decrease both energy usage and emissions under force of law. Some governments have introduced additional incentives to reduce emissions, such as taxation according to usage. As efforts to decarbonize continue, they have the potential to massively impact the budgets and operations of all kinds of businesses crossing many industries.
Those learning about energy management in MBA school will already be well aware of the top renewable energy sources, harnessed most typically from wind, solar, and geothermal sources. As the global demand for natural energy continues to peak, businesses in the sector will continue to look for ways to generate more efficient power from wind, sun, and geothermal sources, while trying to reduce the costs of production.
Businesses in renewable energy are also likely to continue exploring a variety of technologies that can be used to convert natural energy sources into electricity, leading to new opportunities and possible technological evolutions in the sector. Advanced batteries and offshore wind are key examples of technologies that stand to advance rapidly as a result of government backing. Initially stalled by the pandemic, many renewable energy projects using such technologies are back on track for 2021.
Those taking an MBA degree in energy management are likely to have heard the hype surrounding green hydrogen. This type of hydrogen fuel is expected to pick up in practice in various industries as the cost of renewable energy continues to fall. Long known for its ability to massively reduce global carbon emissions, green hydrogen is produced by a method known as electrolysis that can be powered by renewable energy rather than fossil fuels. Having an ability to provide the level of power needed in transportation, manufacturing, and other energy-intensive industries, the fuel source is also incredibly clean, with water as its only by-product.
Oil businesses were already experiencing a downturn in profits prior to the pandemic, due once again to the increased demand for renewable energy sources in favor of fossil fuels. COVID-19 made the oil supply chain even more uncertain, as demand initially plummeted for refinery products, with oil prices steeply dropping accordingly. Oil production is expected to continue to decline through much of 2021.
Oil in the long term will also be dramatically impacted by electrification efforts in transportation, with the governments of many nations already projecting bold goals for banning internal combustion engines. As this definitive move away from gasoline-powered vehicles begins to accelerate, the demand for oil will continue to fall. This has forced many oil businesses to reinvent themselves to be realigned with new clean energy initiatives, and will ultimately impact other businesses along the oil industry supply chain.
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