While the overall outlook is good, there is a mixed bag of trends, predictions and problems that will directly impact sustainability, renewable energy, greenbuilding and cleantech in 2014.
The year to come may prove a challenging one for sustainability. According to an Ecova report, the growth of sustainability in 2014 will be complicated by increased energy and resource prices. The report titled 2014 Energy and Sustainability Predictions: Findings from Leading Professionals is based on a survey of 500 energy and sustainability professionals.
The combination of cost cutting pressures and environmental disclosure will push firms to develop a total energy and sustainability management strategy to remain competitive and meet resource management needs, says Jeff Heggedahl, Ecova president and CEO.
A total of 70 percent of respondents predicted that water will emerge as the top sustainability initiative in 2014. The report indicates that water is percieved as a significant opportunity for savings and improvement. The survey states that water concerns are second only to energy. Ford's 2014 Trend's Report concurs with the Ecova assessment that water will be the priority issue this year as does a Credit Suisse report titled Water: The Next Challenge.
The Ecova report also states that benchmarking regulations will contribute to an increasingly complex environment. However, it further indicates that peer benchmarking is another area where there are opportunities to capture additional costs and energy savings.
While there is both good and bad news for the U.S. renewable energy industry in 2014, overall, the skyward trend continues. As reported in Renewable Energy World, on December 20 Credit Suisse released a highly favorable report that predicted unprecedented growth for renewable energy in the US.
They attribute their bullish forecasts to a combination of state Renewable Portfolio Standards (RPS) and cost competitiveness of renewables when compared to conventional power generation including natural gas. Their report predicts that renewable energy will meet 85 percent of future power demand growth through 2025. This translates to a forecast of 100 GW of new renewable capacity with wind and solar market share more than doubling from 2012 to 2025, accounting for approximately 12 percent of US electricity generation.
Despite these positive predictions for renewable energy, a new report called America’s Power Plan points to problems associated with outdated utility business models in the U.S. As it stands now, utilities are being rewarded for building and maintaining fossil-fuel plants and this is having a deleterious effect on U.S. renewable energy. The report suggests that these problems can be addressed with the right shift in policy.
Kevin Wedman, Vice President of Power and Utilities, Bureau Veritas North America, believes that the biggest obstacle to the development of utility scale renewable energy comes from the absence of adequate transmission infrastructure to support renewable energy projects.
George Danner of the Business Laboratory indicated that he is concerned about the fact thatelectric utility companies use dated models to predict demand. While Brian MacCleery, Principal Product Manager, Clean Energy Technology, National Instruments, believes it’s time to reward utilities for switching to renewable energy.
At utility scale power levels, economies of scale have driven down the cost of solar. Due in part to these price declines, the Credit Suisse report anticipates that U.S. solar will increase 11 times and account for 20 percent of the growth in renewable energy between 2012 and 2025. Higher efficiency and the declining price of technology has brought solar into the range of price parity with natural gas. The costs of solar are expected to continue falling for the next several years.
Mercom Capital Group, an Austin, TX-based clean energy communications and consulting firm, released its solar industry outlook for 2014. Their report predicts that new U.S. installations will total 6 GW in 2014 adding to the country’s current total of 10.25 GW.
The report says utility-scale projects and leased residential projects have been the main drivers of U.S. growth. With more than $3 billion in solar lease funds to finance installations, third party-financed residential installations have been the catalysts of growth in 2013.
Mercom predicts that in 2014, the U.S. will install more solar power than Germany, India, Italy and the UK. Only China and Japan are expected to install more solar energy than the U.S. in 2014.
The Credit Suisse report projects that wind power will double and account for about 80 percent of U.S. renewable energy growth from 2012 to 2025. Wind energy is becoming much less expensive and much more effective at harnessing power and making electricity.
One of the unknowns that will directly impact the future of renewables in the U.S. is the fate of the Production Tax Credit (PTC), which expired at the end of 2013. It remains to be seen what Congress will do when it resumes in January. It is important to note that the PTC has been allowed to expire only to be subsequently resurrected many times in the past.
Green building in North America will continue its strong growth in 2014. This is but one of a number of predictions made by Jerry Yudelson, an author and leading green building consultant. He attributes this growth to the confluence of commercial real estate construction along with government, university, nonprofit and school construction.
In 2014, the focus will increasingly be on the greening of existing buildings. He anticipates that we will see growing interest in energy efficiency in all types of buildings involving automation for energy efficiency using cloud-based systems. He calls 2014, “The Year of the Cloud.”
He sees zero-net-energy buildings as the next logical step for building design and development. He further predicts that there will be much more competition for LEED, including the Green Globes rating system offered by the Green Building Initiative.
Other trends that he predicts will continue are Green Building performance and disclosure, healthy building products, disclosures and declarations as well as "Red Lists" of chemicals of concern. Solar power use in buildings will also continue to grow alongside water awareness and conservation.
Cleantech is expected to do well in 2014. This is due to a broad cleantech recovery and the rise of crowdfunding. However, electric vehicles may not perform as well as many had hoped and there are some surprises in store for the rare earth elements (REEs) industry. These are some of the salient predictions from cleantech guru Dallas Kachan, managing partner of Kachan & Co., a cleantech research and advisory firm.
Despite some speculation to the contrary, Kachan believes the term "cleantech" will remain through 2013. He succinctly defines cleantech as shorthand for environmental and efficiency-related technology innovation.
The forecasts offered by Kachan & Co.’s 2014 cleantech predictions are far more optimistic than last year's assessment or the year before. In 2014, they see an overall upward trend in metrics like corporate, private equity and family office investment, venture debt, project finance, mergers and acquisitions, and new innovation.
While Kachan is bullish about cleantech, he is downright negative about electric vehicles (EVs) for 2014. He anticipates slower-than-expected growth of EVs due to improving efficiency innovations for the internal combustion engine and fuel cell vehicles.
Kachan further predicts that REEs will not generate the huge returns that some had anticipated. He also suggests that this will be due to growth in REEs recycling in 2014.
Kachan's optimistic assessment is in part derived from an earlier report which compares investments in cleantech with other technology booms. Whether we are talking about dot coms, networking, biotech or the PC, there are parrallels that bode well for the future of cleantech. In all of these technological revolutions there were periods of rapid growth that ultimately gave way to corrections, after which we saw more stable growth. This appears to be where cleantech is at in 2014.
As explained by the Kachen report, "we believe the world turned an important corner in cleantech in 2013."
Richard Matthews is a consultant, eco-entrepreneur, green investor and author of numerous articles on sustainable positioning, eco-economics and enviro-politics. He is the owner of The Green Market Oracle, a leading sustainable business site and one of the Web’s most comprehensive resources on the business of the environment. Find The Green Market on Facebook and follow The Green Market’s twitter feed.