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Global Energy Group - Our Predictions for 2021

  • United Kingdom
  • Energy and infrastructure


As we look ahead to another excitng year, see 7 predictions from our Global Energy Lawyers about what to expect in 2021, from oil markets to hydrogen and nuclear power plants.

Year of setting the course

2020 was the year in which, in addition to measures to overcome COVID-19 crisis, new climate targets were defined and numerous strategies for the energy transition were developed at European and national level. 2021 will be the year in which the course will be set to actually achieve these goals. This concerns legislative measures in particular for the promotion and regulation of hydrogen as the energy carrier of the future and for the expansion of renewable energies and grid infrastructure in the offshore sector. In addition, in view of the increased climate awareness of shareholders, a further increase in the commitment of the private sector is to be expected.

Clean energy

2021 should be a game changer for clean energy – we have finally reached an inflexion point globally for renewable energy:

  • At a political level, the end of 2020 marked the first ever announcement by President Xi Jinping that China would aim to be carbon neutral before 2060, a new presidency and direction in the US with President elect Joe Biden committing to re-enter the US into the Paris Climate Agreement, as well in the UK, the Government committing to a 10 point plan for a green industrial revolution.
  • At a corporate level, the major corporates are committing to fulfil their previously made promises around ESG. Through shareholder, investor and consumer activism, this is a primary driving force for an upturn in direct and indirect investment in both energy efficiency and clean energy demand
  • At a financing level, funds, corporates, oil majors, utilities are raising huge amounts of money to deploy at this market. With the right regulations behind it, this wall of money could be deployed quickly directly into the sector but also the supply chain that feeds off this market will grow significantly

Post-Covid, a more flexible workforce, as well as increased use of EV, will require more flexible generation and storage of power. As the demand for power increasingly moves away from the traditional model, and the transmission and distribution systems becomes increasingly stretched, the requirement for flexibility will only increase. This will drive more than just ‘more power’, but will require increasingly sophisticated intelligent technological solutions to deal with this.

The service sector into the clean energy space should increase dramatically. The drive for more jobs (part of the 10 point plan above) will require investment. This will also open up the pool of money available and investment houses that traditionally steered clear of the power or heat sectors can support and fund the service industry.

Off-shore wind will increase with the new rounds being announced, and the continued reduction in costs. We also see floating offshore wind increasing as a global solution in areas that cannot currently benefit from fixed bed offshore wind.

Hydrogen will continue to gather a huge amount of interest. Although, it may still be too early for funds it is clear that corporates and utilities will be ramping up their investments.

Larger scale projects and portfolios will continue to dominate the secondary and tertiary market; but new unsubsidised development projects will start to come to the fore, as well as re-powering of existing assets

The journey to net zero 

Corporate strategy around net zero will drive demand for more energy transition assets and innovative financing to help fund this. This will be on a global basis but much of the traction will be with European and US companies. What will follow is countries including those in less mature markets setting policy objectives to ensure that local supply chain companies and international companies can source energy transition assets.

Project operating disputes 

The global oil industry has been struck by an unprecedented collapse in demand as a result of the COVID-19 pandemic, with short term global demand initially falling by a third from pre-crisis levels of around 100 million barrels a day. Unsurprisingly given such rapid demand and price value destruction, industry investment levels are being cut to the lowest levels for decades as producers take steps to conserve cash. This will inevitably have knock-on effects for other stakeholders, such as field service companies, as well as leading to substantial reductions in future production levels. Meanwhile the two-decade long run of sustained exceptional growth in clean energy investment and installations is set to continue (even more so with the incoming Biden administration), albeit with some inevitable disruption around supply chains and the like. These trends set the stage for more frequent and significant project-related disputes. For example, there can be little doubt that the likelihood of potential defaults by oil and gas project JV participants will increase in a post-COVID-19 environment, as the future commercial viability of projects is called into question and parties reassess their portfolio assets. This in turn means a greater likelihood of disputes connected to issues such as failures to provide required approvals for work programmes and budgets or to meet funding calls. More broadly, there is also a greater risk of insolvency-related issues arising from participants experiencing financial difficulties.

‘Point to Point’ to ‘Transmission Networks’ 

2021 will be heralded as the year that point to point offshore transmission lines in Europe (whether connecting offshore wind farms to the transmission network or interconnectors joining two different transmission networks) fell out of favour and the work really started in developing a regime in which offshore transmission lines connect and work as a network in European waters. Networks are now being recognised as offering greater flexibility and resilience for the offshore electricity network, as well as significant cost savings to the ‘point to point’ model. Many challenges with this approach are yet to be resolved, but 2021 will be the year we started to overcome them.

Oil & Gas  

Many countries will, during the course of this first quarter of 2021, see an easing of lockdown restrictions and a resultant increase in demand for oil & gas. Investment in oil & gas projects was flat in 2020 but more projects will get sanctioned towards the second half of this year. The focus on the environmental ramifications of oil & gas projects has increased and will continue to increase. In addition, most oil & gas companies have declared their commitment to energy transition and their desire to invest in low-carbon projects. These oil & gas companies will, in 2021, become a central part of the global energy transition journey rather than an impediment to it.


We will see increased roll-out of distributed energy solutions particularly around housing and heating schemes. This may, or may not, include investment in SMR technology. Anticipation is that there will be one more large-scale nuclear power plant built in the UK.

Significant capital will be deployed in connection with Hydrogen, in the widest sense; for full deployment significant investment will be needed in hardware and software. In addition, there are a number of existing storage pipeline projects capable of being used for hydrogen.

Overall, we will see new technologies for energy efficiency gaining momentum.