New Energy Outlook 2022 | BloombergNEF | Bloomberg Finance LP (2023)

FAQs

What is the outlook for BNEF 2023? ›

Acceleration to continue in 2023

The outlook for low-carbon transition continues to look extremely bright. Globally, BNEF expects clean power capacity additions to increase by at least 18% in 2023, shrugging off supply chain woes and interconnection delays to hit yet another all-time record at more than 450GW.

Key Takeaways. The energy sector is coming off a strong year, as tight supplies and rising demand fueled high energy prices in 2022. Those dynamics are likely to continue into 2023, given the long lead time it takes to ramp up new supply and refining capacity.

According to the BloombergNEF (BNEF) 2H 2022 Energy Storage Market Outlook forecast, energy storage installations are set to reach a cumulative 411 GW (or 1,194 GWh) of capacity at global level by the end of 2030. This is 15 times greater than the storage capacity that was online at the end of 2021 (27 GW or 56 GWh).

Heavy industry will dominate clean hydrogen demand

Heavy industry is likely to be a dominant end-use for hydrogen as the world strives for net zero by 2050. Five sectors — steel, ammonia, methanol, chemicals and oil refining — will use more clean hydrogen in 2022 than all the world's 51,000 hydrogen cars combined.

The global energy storage market is growing at a strong 23% compound annual growth rate, with annual additions projected to reach 88 GW/278 GWh in 2030, or 5.3 times the expected 2022 level for new installations, according to BloombergNEF's 1H 23 energy storage outlook.

BNEF's sensitivity analysis shows that system costs subject to 2022 commodity prices should be 22% higher year-on-year at $323/kWh in June 2022, compared with $264/kWh in June 2021.

Oil Prices Will Come Down – And So Will Energy Stocks

After hitting US$ 22 in June, the price per barrel of WTI crude slowly receded to US$77 in early 2023. Most oil stocks followed that slide, with their strong performance in the first half of 2022 slowly eroding in the second half.

We estimate that around USD 2.8 trillion will be invested in energy in 2023. More than USD 1.7 trillion is going to clean energy, including renewable power, nuclear, grids, storage, low-emission fuels, efficiency improvements and end-use renewables and electrification.

North America's Advanced Energy Storage System market share is the highest globally, driven by government initiatives to promote renewable energy and reduce carbon emissions. The region is home to several companies that are active in the development and deployment of advanced energy storage systems.

How much will Bloomberg Nef green hydrogen cost? ›

These restraints are why BloombergNEF expects the cost of liquefying and transporting green hydrogen from Australia to Japan by the end of the decade to be around $30 per million British thermal units.

Green hydrogen price may drop to $7.5/kg by 2025.

Notably, FactSet predicts this industry group could post 46% year-over-year growth in earnings in 2023, despite the broader sector's expected decline. In sum, limited supply could offset falling demand to help keep commodity prices elevated.

We expect dry natural gas production in 2022 to set an annual record in the United States, averaging 98.0 Bcf/d. We forecast production to grow slightly in 2023, averaging between 100 Bcf/d and 101 Bcf/d for the year, about 2% more than in 2022.

Natural Gas Forecast: Prices Predicted to Surge Above $3 in Q3 on Increased Demand, Flat Production for 2023. The EIA's Short-Term Energy Outlook (STEO) predicts natural gas prices will climb above $3 in 3Q2023 due to increased demand and flat production.

Renewable capacity is expected to further increase over 8% in 2022, reaching almost 320 GW.

Now, BNEF expects the volume-weighted average battery pack price to rise to $152/kWh in 2023.

At the beginning of 2023, lithium prices stood six times above their average over the 2015-2020 period. In contrast to nickel and lithium, manganese prices have been relatively stable. One reason for the increase in prices for lithium, nickel and cobalt was the insufficient supply compared to demand in 2021.

While battery costs are viewed as a key cost driver for electric vehicles, prices have been declining rapidly driven by improving technology and higher volumes. We estimate that Tesla's battery costs have declined from $230 per kilowatt-hour (kWh) in 2016 to $110 in 2020.

Those dynamics are likely to continue into 2023, given the long lead time it takes to ramp up new supply and refining capacity. The main risk for the sector for the next year is that a severe global recession or new COVID wave could substantially reduce demand, causing energy prices to drop.

Are energy stocks recession proof? ›

What Are the Most Recession-Proof Stock Sectors? Among the Global Industry Classification Standard (GICS) 11 stock sectors, consumer staples, utilities, healthcare, and energy are among the most recession resistant. That is because they are always in demand regardless of the state of the business cycle.

It's still a good time to invest in energy stocks. While the price of crude oil has come down from the lofty heights seen last year when West Texas Intermediate (WTI), the U.S. standard benchmark, peaked above $120 a barrel, oil and gas companies are still reaping the benefits of elevated oil prices.

Energy stocks are 2023's worst-performing S&P 500 sector, down 9.2%, compared with the broad index's 7.8% gain. Concerns about a slowing global economy and energy demand have weighed on oil and gas prices, taking shares of energy companies down with them.

It Is Not Too Late To Buy Energy Stocks

Absolutely not. There are too many fundamentally bullish factors at play that we see Energy Stocks leading the market for the next few quarters. To put it simply, high oil prices are here to stay.

Container-based storage solutions to boost sales in the market. Who are the top players in the market? IBM, Microsoft Azure, Dell Technologies, Equinix, NetApp, and Hitachi Vantara are the top players in the market.

The following industries are considered to be energy-intensive: food, pulp and paper, basic chemicals, refining, iron and steel, nonferrous metals (primarily aluminum), and nonmetallic minerals (primarily cement).

QuantumScape: The Company Solving the “Forever Battery” Challenges.

Amazon strikes green hydrogen deal with fuel cell maker Plug Power, sending shares up. Plug Power's stock surged after Amazon struck a deal with the fuel cell maker to power some of its operations with green hydrogen. As part of the deal, Amazon received the right to buy up to 16 million shares of Plug Power.

Amazon has signed an agreement with Plug Power to supply 10,950 tons per year of green hydrogen for its transportation and building operations starting in 2025.

Who is the leader in hydrogen fuel cells? ›

Companies that are leading the hydrogen and fuel cell space include DuPont de Nemours, Inc. (NYSE:DD), Air Products & Chemicals, Inc. (NYSE:APD), Bloom Energy Corporation (NYSE:BE), and Plug Power, Inc. (NASDAQ:PLUG).

A large amount of hydrogen is required to generate just a small amount of energy. As a result, cars would need huge tanks with hydrogen or they'd have a very short range between fuel stops. That makes it a necessity to build an extensive network of hydrogen fuel stations.

China. China is the leader of the global hydrogen market with an output of 20 million tons, accounting for ⅓ of global production. Sinopec aims to generate 500,000 tonnes of green hydrogen by 2025.

However, in March this year, BNEF performed a new analysis that concluded that green hydrogen was now cheaper to produce than blue and grey H₂ in Europe, the Middle East, and China due to high fossil-gas prices.

We can generate hydrogen from the fossil fuels we gather to power our industries and vehicles. However, compared to simply using natural gas in itself as a fuel source, turning it into hydrogen requires us to use more energy, meaning it is simply easier and cheaper to use the natural gas as it is.

The sudden growth of green hydrogen since 2020 could cut the cost of the resource to less than $2 kilogram as soon as 2040 in most markets, according to recent analysis by Wood Mackenzie. Hydrogen fuel cells are already cost-competitive with lead-acid batteries used in the forklift market.

Aurora calculated in a case study that output of clean hydrogen in Germany will cost between 3.9 and 5 euros ($4.23-5.43) per kilogram by 2030.

The global cold storage market size was estimated at USD 138.97 billion in 2022 and is expected to reach USD 159.70 billion in 2023.

The global battery energy storage market size was valued at USD 9.21 billion in 2021 and is projected to grow from USD 10.88 billion in 2022 to USD 31.20 billion by 2029, exhibiting a CAGR of 16.3% during the forecast period.

Over 2022-2027, renewables are seen growing by almost 2 400 GW in our main forecast, equal to the entire installed power capacity of China today. That's an 85% acceleration from the previous five years, and almost 30% higher than what was forecast in last year's report, making it our largest ever upward revision.

How big is the energy storage market in 2025? ›

In 2020, the energy storage market in the United States surpassed 1.6 billion U.S. dollars, a year-over-year growth of roughly 2.5-fold. This market is expected to continue growing in the next five years, to reach 8.2 billion dollars in 2025.

Cold Storage supermarket in Causeway Point will be closing down after serving the estate for 23 years. The space will be taken over by FairPrice Finest. Cold Storage's last day in operation is on Sunday, Feb. 27, 2022.

There are many reasons why cold and refrigerated storage warehouses are such a hot investment right now. Consumer demand for fresh and frozen perishable items like meat and produce continues to drive the need for storage in the supply chain.

McLeod said these supermarkets and hypermarkets were closed because the Group believed that their performance was unlikely to improve.

Solid Power (SLDP)

Forever battery stocks like Solid Power (NASDAQ:SLDP) are headed higher, too. For one, the U.S. Department of Energy just awarded the company over $5 million to develop its technology, “which could significantly help lower the price of EV batteries,” according to Electrek.com.

In late 2021, QuantumScape illustrated that its forever battery performed in 4-layer formats up to 800 charging cycles. A quarter later, the company scaled successful results to 10-layer batteries up to 800 cycles.

After a series of investments in lithium-ion battery manufacturing, Poland's production capacity rose to 73 GWh in 2022, overtaking the US to become the second largest in the world, behind only China.

Notably, FactSet predicts this industry group could post 46% year-over-year growth in earnings in 2023, despite the broader sector's expected decline. In sum, limited supply could offset falling demand to help keep commodity prices elevated.

Renewable energy capacity 2022 by country. The leading countries for installed renewable energy in 2022 were China, the U.S., and Brazil. China was the leader in renewable energy installations, with a capacity of around 1,161 gigawatts. The U.S., in second place, had a capacity of around 352 gigawatts.

Solar photovoltaics are the fastest growing electricity source. In 2020, around 139 GW of global capacity was added, bringing the total to about 760 GW and producing almost 3 percent of the world's electricity.

Why invest in energy storage? ›

Energy storage can be used to lower consumption from the grid at peak times and the grid also financially rewards those who can reduce consumption and/or feed into the grid within a short space of time.

The capacity of storage systems will grow 15-fold by 2030, reaching 411 gigawatts, according to BloombergNEF, a research company. The amount of storage capacity to be deployed from 2022 through 2030 is greater than the capacity of all the power plants in Japan, according to BNEF.

Under the provisions of the Inflation Reduction Act, the American electrical grid could achieve up to 90 percent of its electricity without carbon emissions by 2030, according to an analysis published Wednesday by the National Renewable Energy Laboratory (NREL).