The energy market needed to adapt in 2020 because of the pandemic. For 2021, expectations are for resumption and investment in renewables!
The pandemic that struck the world in 2020 imposed severe restrictions to contain the increase in infection caused by the coronavirus and had a significant impact on the energy market. With the lockdown in several countries, fuel sales decreased, as did consumption, which caused factories and industries to decrease production. In Brazil, industrial production decreased 18% in April 2020.
In contrast, social isolation and reduced travel caused the CO2 emission rate to fall, decreasing between 7% to 13% compared to the previous year. The bad news is that in the coming years the economic recovery may lead to an increase in numbers, but with the investment in renewables it is possible to walk a new path for the energy sector. Understand better!
What are the expectations for the energy market in 2021?
According to the electric energy secretary of the Ministry of Mines and Energy, Rodrigo Limp, for 2021, there is a prospect of growth resumption. Despite the drop in consumption observed in 2020, forecasts indicate an increase in electricity consumption of more than 4%.
Energy companies in Brazil operate on three major fronts: generation, transmission and distribution. Each of them operates in a segment, but nothing prevents them from developing on more than one front. Generation companies are responsible for generating electricity, whether from renewable sources or not. In this case, investment security is associated with the energy matrix used.
In the case of transmission companies, they take energy from the generating company to the distributor. Thus, it becomes a safer segment, as it is not subject to default or direct fluctuations. Distributors are those that receive energy and distribute it to consumers. As they deal directly with the consumer, they are more subject to market volatility.
For 2021, the bet is on investment growth in generating companies, especially those that use renewable sources. The Federal Government itself has already been making investments, such as the Mais Luz na Amazônia program to bring light to the 300 thousand people who make up the Legal Amazon. Decree 10,387, of June 5, 2020, was created to boost the deployment of new renewable sources across the country, bringing social and environmental benefits.
Why is clean energy a trend for 2021?
Brazil is a privileged country for its ecosystem and the availability of natural resources. Currently, about 80% of the energy consumed here is produced from renewable sources. When comparing with the world average, which is in the range of 25%, it is possible to see how there is a significant advance in this direction.
For 2021, the expectation is a continuation of the expansion of renewable sources, mainly solar energy. In 2020, this source started to account for almost 2% of the Brazilian energy matrix. According to experts, Brazil may become one of the three largest distributed generation (GD) markets with solar energy in 2021, with prospects for installing more than 175 thousand new on-grid photovoltaic systems installed. The source is rated to be the best replacement for hydroelectric plants.
The United States, United Kingdom and European Union are also concerned with the economic recovery in 2021 without giving up sustainability. Country representatives are considering fiscal adjustments at the carbon border in jurisdictions that account for 30% of global imports in value. For the next few years, the British government plans to invest 100 billion pounds for green infrastructure and France will allocate 9 billion dollars for green industries.
Therefore, the prospects for the energy market for 2021 are very positive and point to an increasingly clean and sustainable energy source. If you want to better understand the possibilities of investment and business development in the sector, contact us!