The energy landscape in 2024 is rapidly evolving, shaped by significant advancements and global shifts. In this piece we take a deep dive into the anticipated energy transformations and trends in 2024. At VECKTA, we have been discussing what we expect some of the major trends will be in 2024. There is no doubt we are going to be a part of pivotal changes:
A BreakOut Year for Distributed Energy – 2024 will be a breakout year for distributed energy. There has been expectation and hype around this sector for years but it has never delivered. There have been many reasons for this but we are seeing an alignment of trends that will unlock this industry. Our prediction is businesses will lead the charge and deploy onsite energy systems at scale for the following reasons.
Growth Through Economic Smarts – The primary driver for businesses embracing onsite energy systems will be the realization that it is the most economic and profitable business lever they have control of. 2024 is going to be a challenging year economically – elections, interest rates remaining higher than the last decade, inflation and mounting debt. Combine this with one of the most expensive cost inputs to any business, energy (5-40% of operating costs), experiencing skyrocketing prices with no respite. Businesses will survive / thrive through cost optimization – managing and reducing energy costs will be critical. The risk to this trend is if businesses hunker down and revert to a let’s just “wait and see”.
Gas Pedal on EV Deployments & Electrification – Electric vehicles are no longer a niche market. Improved battery technology, increased range, and more diverse models cater to a broader audience. The biggest risk is a lack of infrastructure. This is likely to become an election topic. In the words of our very own @patrick baker, “we are building a lot of printers without any ink for them”. The EV market can not thrive without enabling infrastructure. Even if we see some regulations or business commitments throttle back, EVs are now inevitable, and those that lead the charge will differentiate themselves. Power capacity to support more EV charging can not be created quickly by relying on the central grid and utilities upgrading infrastructure, onsite energy systems will be a necessity to quickly deploy charging infrastructure at scale.
Energy Security & Sovereignty – a political topic and pain point for businesses and consumers will be access to reliable energy. Grid outages will only increase globally as infrastructure ages and tries to adapt to needs it was not designed for. In 2023 we saw what happens when countries, businesses and communities do not have access to energy. As well we saw energy being strategically used in military conflicts as a tactic. Centralized systems are more vulnerable with single points of failure. This will lead to multiple trends; more distributed energy, more near/reshoring and diversification of supply chains, recognition that we cannot rely on individual technologies or solutions and a realization we cannot turn the taps off on traditional sources of energy until the replacement technologies are in place. There needs to be a purposeful, equitable and profitable transition.
Supply Chains – Supply chains will be more stable and equipment prices more predictable, recovering from recent disruptions (Ukraine/Oil, COVID, US/China relations). This will unlock some of the constraints in the market.
Critical minerals and metals will play more into the energy transition discussion and will create new superpowers – companies and businesses. Who will embrace the opportunity, adapt or be disrupted? We are already seeing some interesting moves being made with ExxonMobil investing in a lithium mine in the US and Chile nationalizing its lithium industry? Competition for these resources will reshape trade, markets, politics and even borders, and will play a role in global elections – of which 70 countries have elections in 2024!
Severe Weather, Heating and Cooling – as extreme weather events have a greater impact on lives and economies, the connection between the energy transition and everyday life will become increasingly more apparent. This will make it a pressing issue for voters and the summer olympics in Paris will be a focal point. Cooling equipment represents 20 percent of electricity consumption in buildings and in turn a significant portion of operating costs – this will drive more energy efficiency and onsite energy system adoption as solutions will be rolled into complete utility management projects – commercial models facilitate utilities as a service and advance from energy as a service.
Aging Equipment – we are now starting to see diesel generators, gas turbines and solar in some cases are now 15-25 years old and nearing end of life. They will be replaced with more modern, efficient and cost effective technologies.
Regulations – particularly those in EU and CA will have significant impacts on businesses. Financial institutions and investors are increasingly factoring sustainability into their decision-making. Businesses will continue to scramble to capture data, report it in a meaningful way and then show that vs their peers they are reducing their impacts. We will see a transition from reporting impacts to acting on commitments to reduce impacts. Regulations and expectations to reduce emissions will ripple through Supply Chains and employment markets. and companies will need to operate in a more sustainable way to secure/retain contracts, investors and employees.
Incentives – all of these activities will be stimulated by massive incentives from governments around the world.
Other adjacent predictions include:
Retail Media Networks (RMNs) – In this ever-changing energy landscape, we believe RMNs are a great way to create a rewarding experience for customers and organizations alike. By taking advantage of the two minutes customers spend at the pump / 20-60+ mins charging their car, RMNs are creating a potential new revenue stream for companies. Reuters predicts that in 2028, RMNs will be the leading platform for advertising, surpassing television. This presents a fantastic opportunity to deepen relationships with customers, boost brand loyalty and promote growth. This will likely be the revenue model for most EV charging companies, as charging for the energy is not working at scale today.
Crypto – markets will take off in 2024 (this is not investment advice), this will occur for multiple reasons, with the highlights being, the market will become regulated, ETFs will become available (making crypto accessible to all) and the Bitcoin halving event will occur. Additionally, more people will turn to crypto for the same reason they will deploy onsite energy systems, they want to have direct control and be a part of a distributed system vs a top-down centralized system. Like EVs, adoption is here, the question will be how quickly?
AI – The hype around AI won’t make it to consumer markets yet. The technology exists, and in 2024+ the focus will be on creating the enabling technologies and interface(s) that put this new power into our hands – from an energy standpoint – to enable energy prosumers. AI and digital technologies will reshape energy management and distribution at a business level. We will utilize cloud computing, IoT, blockchain, and advanced analytics to automate tasks, optimize data collection and analysis, design the best systems, predict maintenance needs, enable greater collaboration and beyond. This digital transformation is not just a trend but a fundamental shift in how energy systems operate and how they will be able to interact in the future.
Conclusions & beyond about the anticipated energy transformations and trends in 2024.
For all the reasons above, we believe that VECKTA will have a massive year. We have purpose-built the Platform and Marketplace to enable commercial and industrial businesses to achieve reductions in energy costs, increased enterprise value and a differentiated position in their markets at scale and with confidence. We believe VECKTA will be one of the critical enabling technologies that unlock the onsite energy market at scale and maximize these trends. 2024 will not come without its surprises and there will be economic headwinds for those that batten down the hatches and go into defensive mode. For those who see the opportunity and proactively position themselves, they will realize huge advantages for a long time to come.