1. The industry finds its formula to decarbonize
The European Union aims to be climate neutral by 2050. In other words, it has set a target of having an economy with net-zero greenhouse gas emissions. This goal is at the core of the European Green Deal and is in line with the community’s commitment to increase global climate action in accordance with the Paris Agreement.
That is why the path to decarbonization will shape the steps of the business fabric this year. Many industries have already begun transition processes, but there is still a long way to go, and the lack of knowledge on how to progress poses a significant challenge. In this regard, this year will go beyond just discussing technologies and will focus on addressing this challenge globally, from planning to strategic analysis.
The key elements on the path towards decarbonization will involve a commitment to net-zero emissions, Scope 3 carbon footprint, offsetting, renewable energies, electrification, and a comprehensive understanding of environmental challenges, among other aspects. All available technologies will contribute to this common goal based on the process and context.
2. Energy prices will continue to soar
While it is challenging to predict how energy prices will behave over the course of an entire year, all indications point to energy costs continuing to burden businesses and households, posing a challenge to the expected post-COVID economic recovery.
This prediction is driven not only by the energy market but also by geopolitical and meteorological factors that directly impact market volatility. Thus, it can be stated that in 2022, prices will continue to rise due to the persistently high gas prices and the increasing cost of emitting CO₂. This situation will depend, among other factors, on the progress of installing new renewable capacity and the evolution of energy storage technologies.
In this context, renewable energies, particularly photovoltaic and wind power (including offshore), present an opportunity to reduce energy costs and integrate environmentally friendly generation models. The challenge lies in overcoming the technological hybridization to increase stability in electricity generation, advancing storage technologies that promote the use of renewable sources, and driving new models such as energy communities, industrial symbiosis, and self-consumption.
Therefore, improving economic and energy efficiency in operations, maintaining and enhancing assets in service, and optimizing designs will become increasingly attractive. The European Commission would not support measures that “cheapen waste” without private competitive action, as the focus will be on achieving economic and energy efficiency.
3. Mobility plugs into sustainability
If 2021 was a year for the automotive industry to prepare its decarbonization plans, 2022 will be the year in which these plans are fully implemented, especially with the approval of the PERTE (Strategic Projects for Economic Recovery and Transformation) for electric and connected vehicles by the government. As a result, mobility will plug into sustainability, and everything surrounding electric vehicles will take center stage.
The charging of batteries will have a technical and economic impact on the electrical system, both in operation and in possible reinforcements needed for the existing infrastructure. Therefore, mechanisms to provide flexibility to the grid and the development of charging centers will have a significant impact this year.
The integration of users into this system will be another upcoming challenge. The bidirectional vehicle-to-grid (V2G) technology, which allows electric vehicles to return energy stored in their batteries back to the grid, will be another key challenge to enable this interaction.
In this context, green hydrogen will be a valuable asset in reducing dependence on combustion engines. Initiatives like the PERTE will foster the development of hydrogen refueling stations for heavy transport, helping to establish the necessary infrastructure to ensure the deployment of “green” vehicles.
4. Green hydrogen as an energy vector
Green hydrogen is already here and will play an important role in decarbonizing sectors that are difficult to electrify. Thanks to its renewable potential, Spain can position itself as a European leader in this transition, providing a foundation for the development of new generation and demand technologies. Industries, aiming for decarbonization, will need support this year to accompany them from the earliest stage to the real integration of hydrogen into their processes.
Sectors of the industry that already consume hydrogen (around 500,000 tons in Spain, primarily in petrochemicals, refining, and fertilizers), as well as heavy transport and high-temperature heat processes, will be the first applications for substituting green hydrogen for fossil fuels.
In the field of renewable energy, hydrogen will emerge as a key player in energy storage and management systems, beyond batteries. Thus, hydrogen technologies will contribute flexibility mechanisms to the electrical grid, which is increasingly urgent due to the electrification of certain sectors and the growing penetration of renewable generation in the system.
5. Cybersecurity: safeguarding the electrical grid with locks
We are entering a new energy world, a world of decentralized generation and intermittent renewable sources combined with a growing commitment from users. This landscape will enable the electrical grid to become more flexible, dynamic, and interconnected. However, it will also introduce new risks and security threats.
To ensure cybersecurity in the energy sector, blockchain technology offers a qualitative leap. Its mechanisms of decentralized management, secure and immutable transaction recording, and automation of operations can pave the way for optimal management of the entire value chain of distributed and decentralized energy. This would include bilateral and flexibility markets, energy generation and distribution management, sales, billing, payments, innovative financing mechanisms, contract management, incentives, and more.
This shift towards decentralization would allow each participant in a network to transact directly with any other participant without an external intermediary to validate and secure the transactions, thus reducing costs and execution time. The information embedded in these scenarios could include data on offered and demanded capacity, the origin of electric energy, or fulfillment of forecasts. All of this could be integrated and verified within a blockchain.
6. Storing energy: the great challenge of electrification
The efficient storage of energy will be a fundamental pillar this year as it will enable the flexibility of renewable energy production, ensure its integration into the system, and support electrification of various uses.
On the demand side, the need for flexibility will increase as renewable capacity grows and traditional generation is phased out. On the supply side, investments in energy storage will be key in 2022.
Battery systems, one of the most critical components of electric vehicles, will need to become increasingly dense, secure, and lightweight. Materials such as silicon, silicon carbide, graphite, and lithium are expected to play a crucial role in achieving smaller and lighter batteries with higher energy storage capacity. This will contribute to the advancement of the electric transition in the automotive industry and the safe and massive deployment of renewable energies.
Equally important will be the integration, control, and management of energy storage systems to ensure optimal utilization and benefits for the overall system. In this regard, algorithms will play a crucial role in offering greater flexibility to the electrical grid, opening the field for the creation of new planning and operation services, establishing demand response schemes, and promoting the integration of energy storage systems and renewables.
7. The industry gains momentum towards industry 4.0
2021 was a turbulent year in the industrial sector, particularly in logistics, marked by supply chain issues worldwide. This trend is expected to continue in 2022, making it necessary for companies to accelerate their transition towards Industry 4.0 in order to fully digitize.
Intelligent management of large volumes of information will be crucial. Through Internet of Things (IoT) solutions, industries will be able to improve industrial processes, better understand customer needs, and identify market trends and opportunities. It will also be relevant for logistics, which will need to adapt to decarbonization goals by seeking sustainable alternatives.
Digital twins will also take a step further this year as an innovative technology for simulating and analyzing industrial processes, maximizing the benefits of digital transformation.
Specifically, Building Information Modeling (BIM) methodology, as a transformative tool in the management of electrical distribution assets, will provide the capability to support the transition from the current development model to a highly demanding environment like Industry 4.0.
8. The city accelerates its ‘green’ revolution
Who would not want to live in a ‘green’ city? The Smart City is a concept that is here to stay and will revolutionize the way we perceive and experience urban life. Cities will begin to combine technologies with information in order to improve quality of life, reduce energy costs, and minimize environmental impact.
Regulated lighting to improve energy efficiency, smart cards for citizens, sustainable mobility systems, a wide variety of applications to interact with the city, efficient waste management, and intelligent water and energy supply are some of the applications that can be encompassed in a Smart City.
All of this with a focus on the citizen, so that a newly planned, compact, and connected city increases productivity and competitiveness, improves livability with easy access to services, and enhances environmental protection.
Within the concept of a Smart City, sustainable building will set the trend. Building from a sustainable perspective will involve actions ranging from the choice of materials, the construction process, and even the urban environment, to the demolition phase and waste management. This should also include proper management and reuse of natural resources, the use of efficient facilities, and the utilization of renewable energy sources.
9. Waste claims its spotlight
What was once a linear chain with an endpoint has now become a circular value creation process in which we all play a part. The circular revolution will not only be an inevitable challenge but also an incredible market opportunity for those who can adapt best.
Efficient waste management to properly valorize waste and comply with increasingly strict national and international regulations in this field will be crucial.
But it does not stop there. The new production model must be considered from the beginning of the value chain: from the use of materials, design, production methods, energy consumption, and distribution model. Thus, the concept of ‘eco-design’ will be in vogue this year, and the main efforts should be focused on the early stages of the production process.
This transformation will allow us to reduce our dependence on critical materials, some of which have seen rising prices due to geopolitical crises. It will also lead to the transformation and creation of new business models where we must be capable of generating value in the territory.