2022 Renewable Energy Outlook

Date: April 2022

Author: Sophaphan Saptippayarattana
Partner | Audit & Assurance
Deloitte Thailand

Contributor: Tasada Sangmanacharoen
Consultant | Clients & Industries
Deloitte Thailand

The change in renewable energy industry has been accelerated more than before. In just a decade, renewable energy’s contribution to US electricity generation has doubled—from 10% in 2010 to 20% in 2020. Its growth is also 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. According to Deloitte’s 2022 Renewable Energy Industry Outlook report which fielded a survey of more than 500 US executives and other senior leaders in five specific industry groups: chemicals and specialty materials, engineering and construction, industrial products, oil and gas, and power and utilities, has summarized 5 trends of 2022 renewable energy as follows:

Growing interest in next-generation clean energy technologies

Energy industry stakeholders are considering investments in the clean energy tech: renewables such as wind and solar into the electric grid. For an industry that has mainly focused on solar and wind, private investment and pilot projects could help expedite commercialization of emerging technologies such as green hydrogen, advanced batteries, and other forms of long-duration storage. These technologies can furnish zero-carbon electricity and longer-term seasonal electricity storage, ease grid congestion, boost reliability, and facilitate integration of solar and wind into the grid.

Solar championing new configurations

Solar photovoltaic (PV) systems, in other words, solar cells are among the most cost-competitive energy resources in the market after an 85% cost decline over the past ten years. In addition, 2022 could also see the industry growing solar-plus-storage buildouts, exploring floating solar PV modules, and expanding community solar projects to new markets. Pairing storage with solar offers cost synergies and operational efficiencies.

Transmission infrastructure is becoming a key priority, especially for offshore wind

Transmission development is expected to be an important part of the renewable energy industry’s agenda in 2022. As the development is a key for connecting new, often remotely located renewable energy capacity to electricity consuming centers, challenges for renewable growth should be minimized. This is especially true for offshore wind, which is saw for significant growth and must be connected to coastal infrastructure. Both enhancing the capacity of existing lines and building new lines could be key in solving the transmission challenge. In fact, 76% of the power and utility respondents to a recent Deloitte survey are also either planning or depending on new transmission projects to boost renewable energy access.

Supply chain strategies continue to evolve

The renewable energy industry is likely to continue to evolve supply chains, as profits have suffered recently amid logistics-related cost pressures. In 2021, the solar industry remained under pressure and their YoY prices increased for the first time in seven years due to supply shortages of components (semiconductors, modules), raw materials (polysilicon, commodities), and labor as well as rising shipping costs.

Circular economy critical for renewable energy industry’s sustainable growth

In 2022, end-of-life management strategies for renewable energy industry products and materials are likely to capture attention, as early installations approach the end of their useful life. This could help reduce waste, increase resource security, and provide additional financial value as well as sustainability credentials. By 2030, decommissioned PV modules could total one million tons of waste, and there could be 80 metric kilotons of lithium-ion batteries to recycle in the US. In the case of wind, about 8,000 aging wind blades are expected to be removed in 2022, and the accumulated blade waste through 2050 could total about 2.2 million tons.

Renewable Energy in Thailand

Currently, although natural gas and coal (including lignite) had mostly contributed to Thailand’s electricity generation in 2021, renewable energy had contributed to about 10% which increased from that of in 2011 at 2%. Biomass was also the renewable energy most generated in 12M2021’s target at 33% and solar energy at 25%, which aligned with the country’s Power Development Plan (PDP) emphasizing the increase use of renewable energy. The Committee on Energy Policy Administration is also considering to enhance the share of electricity generation from renewable energy to 10,193 MW in PDP 2022, which will increase by 1,000 MW compared to PDP2018 rev. 1.

Solar revenue in Thai companies also saw favorable. For example, WHAUP’s solar revenue soared from 58.5 million THB in 2020 to 254.6 million THB in 2021, while that of GUNKUL’s 2021 also rose 19.64% from 2020.

The year ahead promises new growth paths for the renewable energy industry. The industry would also be changing due to more advanced technologies. Thus, it is crucial for leaders across sectors to keep being updated and apply their strategies in the right place at the right time.