A look ahead and my predictions for 2024
My view on key trends we should expect to see in 2024
Since the first post was a look back at 2023, it only felt right to post my views on what to expect in 2024:
Real estate investors and developers will play a crucial role in building decarbonization as well as developing the zero emission vehicle charging infrastructure. Buildings contribute to nearly 40% of the global emissions. Nearly a third of this comes from materials and construction and the remainder from operational emissions including space heating & cooling as well as lighting.
Click here to learn more about Architecture 2030’s efforts to tackle emissions in the built environment. Virtually all major cities and countries now have a building decarbonization target. In the U.S., NYC’s Local Law 97 (LL97) has tagged over 250,000 buildings to reduce their emissions 40 percent by 2030 and 80 percent by 2050. Japan has new building energy efficiency standards coming in to effect from 2025 to tackle building emissions. The European Union passed its Energy Performance of Buildings Directive (EPBD), a key legislative tool to implement building decarbonization goals. Building owners and developers are therefore rushing to implement solutions including upgrades to HVACs, building envelopes, and installing rooftop solar, to meet these new mandates. Gas stations are now slowly being replaced by charging stations. Apartment complexes, office buildings, and shopping centers will increasingly be designed with charging stations, helping to improve the overall charging infrastructure network and revitalize communities.
The use of carbon offsets and carbon-neutral claims will come under increased scrutiny. The EU has kicked it off and intends to ban claims such as “eco” and “carbon-neutral” by 2026. These rules, that still need the approval of the EU parliament, will likely set the stage for other geographies to follow. Carbon neutral claims have a direct impact on the use of carbon offsets. EU’s rules, if approved, will likely set the stage for heightened scrutiny of the use of carbon offsets and the certification bodies.
Looking beyond just carbon. Tackling carbon emissions is important but not the only challenge that needs a solution. Tackling carbon emissions without addressing how we reinforce and rebuild cities and towns is going to exacerbate conditions for vulnerable communities. Growing drought-resistant crops, crop rotation, better flood defense, and improving response to natural disasters, will take center stage, globally. According to a report from the UN we will need between $215 billion and $387 billion a year, this decade, to tackle impact from global warming.
The circular economy and circular business models will increasingly gain steam. Single-use plastics and plastics packaging have a seriously negative impact on the environment. Even though recycling rates have increased around the world, an overwhelming percentage of these plastics still find their way to the landfill. Expect to see new regulations targeting this industry, fueling innovation in the waste-to-resource industry. This is likely to create pathways for small and medium businesses to offer innovative solutions that the incumbents seek. As the first wave of electric vehicles near their end-of-life in 2027, expect to see increased investment, partnerships, and new policies incentivizing battery material recycling. With rising resource nationalism, investments in regional recycling capacities and networks will increase.
More hydrogen capacity, everywhere. According to a report from McKinsey & the Hydrogen Council, 1,418 hydrogen projects have been announced globally, out of which 1,011 will be either partially or fully deployed by 2030 (see image from the report below). While this is exciting, according to the Bloomberg New Energy Finance (BNEF) database, only 10% of these clean hydrogen projects slated to come online by 2030, have a buyer (offtake agreement). Expect to see a strong push from this industry to seek better incentives from governments around the world.
LNG will play a transitional role while nuclear rises. Even though a fossil fuel that everyone aims to move away from, LNG will continue to play a crucial transitional role in the energy transition. LNG produces 40% less CO2 than coal and 30% less than oil. Until back-up batteries are deployed rapidly, and until the grid infrastructure gets better, LNG has a role to play in the energy transition. Similarly, while it continues to struggle to gain public acceptance, nuclear power will gain steam in 2024. According to the World Nuclear Association 60 reactors are under construction and about 110 additional ones are planned, mostly in Asia.
Deployment of renewables will continue. Solar and wind will continue to grow. While permitting continues to be a bottleneck for the growth of this industry in the U.S., the International Energy Agency predicts that the new capacity additions could reach 550 GW in 2024. Across the EU, more policy and regulatory changes have been put in place just in the last 18 months to accelerate the pace of deployment of renewables, triggered by the Russia-Ukraine crisis. Asia will lead the pace of renewable capacity installations thanks in large part to China followed by India.
Growth in virtual power plants. Virtual power plants (VVPs) integrate multiple small-scale energy resources (e.g. solar parks, electric vehicles, batteries, etc.) to improve grid resilience. Since these are unlike traditional centralized power plants, VPPs can be nimble and help balance supply and demand. While VPPs have gained steam thanks in part due to the U.S. Department of Energy Loan Program Office, the Association of Southeast Asian Nations (ASEAN) is putting an increasing focus on this effort as well. Singapore, Malaysia, Philippines, Indonesia, Australia, China, India, and Vietnam are making steady strides to deploy VPPs, through favorable incentive schemes. Across the EU several large VPPs are anticipated to come online; Elisa’s 150MWh VPP in Finland and Shell-owned 250 MWh sonnenVPP in Germany will be some of the largest in the region.
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