2023 Global Energy Trends
The global energy market entered 2023 in flux. War shifted energy prices in Europe, while the impact of substantial government investment accelerated an already rapid push toward renewable energy and grid-scale solar. As we inch closer to year’s end, we check in on the 2023 global energy trends impacting businesses big and small.
Energy in 2023
Initially expected to last weeks, if not days, the war in Ukraine eclipsed the 1-year mark in February 2023. The conflict has reshaped Europe’s gas supply, resulting in triple-digit price increases for several nations within the Eurozone. At the same time, the Inflation Reduction Act’s promised investment in US renewable energy and energy efficient programs started paying – in some cases, billions of dollars hit construction and development markets over the course of just a few weeks.
Renewable Energy in 2023
Across public and private investment streams, more than $2.8 trillion went into the energy industry this year, marking a 24% increase compared to 2021. Fossil fuel investment grew by a slightly more pedestrian 15% over the same period.
Of the $1.7 trillion invested in renewable energy, solar, wind and nuclear have benefited the most. Utility grid updates and grid-scale storage have also received must-needed attention.
What’s driving the trend?
More countries (and companies) are investing in renewables to limit exposure to high energy price volatility. During the ongoing heat waves of mid-summer, energy prices jumped 800% overnight and total consumption broke historic records. For manufacturers and other energy-intensive businesses, even minor energy price fluctuations can cost millions – these energy cost spikes could be crippling.
Energy Equity
One of the underreported benefits of the IRA is the policy’s focus on underserved, lower-income communities. More intentional energy programs bring the 44% of US households that currently meet the definition of low-income. Low-income households spend roughly 8.6% of their monthly income on energy, or 3.5 times the national average. This energy burden leaves families vulnerable to energy price volatility and limits economic opportunities.
What’s driving the trend?
Twenty-three states have community solar programs that require some form of investment in low-income communities. These programs can’t come soon enough; rising energy prices triggered double the number of past-due payments in 2022, a trend that’s expected to continue through 2023.
Related: Natural Gas Investment Doesn’t Make Financial Sense
Cybersecurity and Renewable Energy
Cyber-attacks on renewable energy resources increased 46% in 2021, with the rate expected to increase annually as more solar, wind and nuclear energy sources are added to the grid. Cyberthreats against manufacturers have also increased, with denial-of-service attacks halting operations at wind turbine factories in 2022.
What’s driving the trend?
There are roughly 90 GW of distributed energy resources (DER) in the US today, including more than 3 million solar generation sites. Almost all of these systems are connected to and monitored by an internet connection. There are almost cybersecurity requirements for DER as of 2023, leaving the entire grid susceptible to attack. Those standards need rapid introduction to ensure safe and secure renewable energy access in the years ahead.
Global Energy Trends Come Home
US energy policy has enjoyed a much-needed influx of federal and private investment. Five years ago, fossil fuel and renewable energy investment was nearly equal. In 2023, the ratio of investment is clearly behind renewables and 1:1.7. We’re proud to connect Michigan businesses with the resources and expertise to make energy-efficient upgrades across several industries. Let’s get started; speak with a Keen energy consultant today.