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Power, Utilities & Renewables
Deloitte’s Global Power & Utilities team helps clients across power generation; transmission; and distribution and water companies anticipate and respond to complex market challenges and their resulting opportunities by offering an unparalleled range of services, innovation, and critical thinking.
2022 power and utilities industry outlook
Tackling a tall order
In 2021, the power and utilities industry tackled tough challenges, made measurable progress, and received clean energy encouragement from a new administration. As the US economy began to emerge from its pandemic-induced recession, electricity sales rose 3.8% through August 2021 over the prior year. At the same time, unprecedented and unpredictable extreme weather events challenged the grid’s reliability and resiliency, and cyberattacks on critical infrastructure increasingly made headlines.
In 2022, the tough challenges remain—boosting clean energy, ensuring reliability and resiliency, and maintaining security, while keeping costs down. To tackle this tall order, the electric power industry will likely continue to advance in its “3D” transformation: decarbonization, digitalization, and decentralization. We’ll be watching for technology deployments to advance and markets to evolve. Industry spending will likely remain high, and renewable penetration could accelerate further.
In our annual power and utilities industry outlook, we explore five trends that will likely impact the industry in 2022, from enhancing decarbonization and resiliency strategies, to deploying 5G and cloud technologies, to harnessing flexible load and supporting building electrification. In the policy arena, while state mandates such as Renewable Portfolio Standards and federal renewable tax credits have underpinned the clean energy transition to date and will likely evolve further in 2022, we’ll also be watching the potential impact of additional federal policy, investment, and regulatory support.
2022 renewable energy industry outlook
The renewable energy sector is ready to branch out
In 2021, the renewable energy industry remained remarkably resilient. Rapid technology improvements and decreasing costs of renewable energy resources, along with the increased competitiveness of battery storage, have made renewables one of the most competitive energy sources in many areas. Despite suffering from supply chain constraints, increased shipping costs, and rising prices for key commodities, capacity installations remained at an all-time high. Wind and solar capacity additions of 13.8 GW in the first eight months of 2021 were up 28% over the same period in 2020. Many cities, states, and utilities set ambitious clean energy goals, increasing renewable portfolio standards and enacting energy storage procurement mandates.
Renewable energy growth is poised to accelerate in 2022, as concern for climate change and support for environmental, sustainability, and governance (ESG) considerations grow and demand for cleaner energy sources from most market segments accelerates. At the same time, the Biden administration’s vision to fully decarbonize the US economy is helping spur activity in the renewable sector that will likely drive further growth—particularly if proposed legislation is enacted. In our renewable energy industry analysis, the following five trends are expected to move to the forefront in 2022, opening new avenues in the renewable energy growth story.