As 2019 approaches, it looks set to be an interesting year, both in politics and within the energy sector. In recent years, there have been numerous significant changes introduced into the energy sector, helping to make it more effective, affordable and eco-friendly. So, what does 2019 hold for the industry and which factors are likely to impact it as we head into the new year?
OPEC warns there will be crude oil oversupply in 2019
One of the main factors set to impact the energy sector going into 2019 is an oversupply of crude oil. OPEC has warned that the surge within oil output is going to leave the crude oil market in oversupply. This could mean Russia and other oil-exporting countries could need to make significant output cuts.
Initially, oversupply of oil may seem like a good thing. It pushes the price of crude oil down, making it much more affordable. However, what it also does is increase the likelihood of layoffs, resulting in less money going into the economy. This would have a worldwide impact.
However, the Energy Minister in Russia, Alexander Novak, claims he isn’t convinced that there will be an oversupply next year. So, it isn’t certain whether or not crude oil will be pushed into oversupply, but the threat is certainly there.
Solar installations will begin to rise
As the world looks towards renewable energy sources to help reduce its negative impact on the environment, solar installations are set to rise. In the US, tariffs introduced on solar imports resulted in a decline in installations throughout 2018. However, experts are predicting more companies will be investing in solar throughout 2019 as they start to see the larger cost savings potential.
China is also set to have surplus stock of solar modules, which would likely push down its prices. This in turn will drive competitors to lower their costs, making solar installations much more affordable.
Technology has resulted in a lot of competition within the energy sector. This is unlikely to slow down in 2019. As businesses look to save money on their monthly energy use, they’ll be taking advantage of sites such as Utilitywise, to compare the different options out there.
There will also be a switch to more renewable energy sources. It isn’t just Americans who will be investing more in solar power – businesses throughout the UK are also likely to start looking into more natural, renewable energy sources.
No deal Brexit could see North Sea shutdown
Unsurprisingly, Brexit will have a major impact on the energy sector within the UK. As a No Deal Brexit becomes increasingly likely, experts are warning that could lead to a North Sea shutdown.
The worry is that if no deal is reached by March, it could lead to severe labour shortages which would force North Sea oil operations into shutdown. Out of the 7% of workers who make up the oil and gas industry, a staggering 5% are EU workers. So, a hard or no deal scenario could have dire consequences on the industry.
There’s also the fact that the North Sea energy production has been struggling to attract investors. With Brexit looming and if there is an unsatisfactory result, the sector will find it even more difficult to get the funding it needs to continue operations.
As you can see, there are a lot of factors set to impact the energy sector in 2019. An uncertain Brexit and an oversupply of crude oil are two potential concerns experts will need to address as we enter into a new year.
Sources: ft.com / utilitywise.com / cnbc.com