As another challenging year draws to a close, many of us will be forgiven for looking towards a brighter 2022. And although shadows loom on the immediate horizon, with a number of countries reimposing lockdown restrictions as a result of a surge in COVID-19 cases, the outlook for the year ahead is much better, and we can all hope that 2022 will finally begin to resemble ‘life as we knew it’.
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The Economist Intelligence Unit’s (EIU) ‘Energy in 2022’ report certainly suggests that there will be an improving outlook for energy consumption next year as economies recover from the impacts of the COVID-19 pandemic. The EIU is forecasting a 2.2% rise in global energy consumption across the 69 countries covered by its forecast, to reach 13 410 million toe next year.1While this figure is higher than those seen in 2019 (which will compensate for the decline in consumption seen during the pandemic), it also represents a slowdown of the rebound this year, as energy consumption begins to normalise.
Increased energy demand will also support higher prices, with the EIU predicting that the price of oil will average US$78.5/bbl next year (assuming that the current OPEC+ production deal remains in place). Price forecasts for natural gas and LNG have also climbed significantly, and are expected to stay high until 2Q22 as stocks are rebuilt.
However, just as the pandemic is likely to have altered the way that we live our lives forever, we all know that the energy sector is bracing itself for a ‘new normal’ of its own. As the energy transition begins to gather pace and governments around the world work towards pledges made at COP26, the EIU notes that many companies will need to undertake urgent reviews of their strategies next year.
The ‘Energy in 2022’ report highlights green hydrogen as a new technology to watch out for in the year ahead. Increased government support and business interest in clean fuel technologies is likely to result in new investment that could eventually reduce the cost of extracting green hydrogen, which has been a significant barrier to its commercial use until now.
The viability of green hydrogen will be tested in the coming decade. In its recently published ‘World Energy Outlook’, the International Energy Agency states that: “Success will depend on major investments in innovation to lower the costs of production and in transport to ensure that new end-user equipment and vehicles quickly become available on the market.”2
However, there is emerging consensus that hydrogen will play a key role in the transition to net zero, and momentum across the entire hydrogen spectrum – from green to blue and turquoise to yellow – is gathering pace like never before.
In light of this, I’m delighted to announce that Palladian Publications will be launching Global Hydrogen Review in spring 2022: a brand new publication dedicated to the entire spectrum of the hydrogen sector. To ensure you keep up-to-date with the latest developments in the hydrogen revolution, please visit www.globalhydrogenreview.com where you can read the latest industry news and register to receive a free subscription to the magazine.
1. ‘Energy in 2022’, Economist Intelligence Unit, (November 2021).
2. ‘World Energy Outlook 2021’, International Energy Agency, (October 2021).