However, key trends indicate rising risks, evolving trade strategies, and geopolitical tensions that could impact energy markets globally (Fitch Solutions, 2024).
Global Energy Market Trends
According to BMI, trade barriers are expected to escalate, leading to higher prices, reduced imports, and increased geopolitical trade tensions. Governments are likely to use tariffs to protect domestic manufacturing industries, particularly in the renewable energy sector, which could slow down global supply chains (Fitch Solutions, 2024).
A notable forecast is the expected rise in tariffs on low-carbon technologies. Between 2023 and 2024, key markets such as the United States, India, and Brazil have increased import tariffs on solar equipment. These markets are projected to further raise tariffs in 2025, targeting East Asian manufacturers that account for over 80% of global solar panel production, 50% of electric vehicles (EVs), and 50% of wind turbines (Fitch Solutions, 2024).
The implications of these tariffs include higher costs for renewable energy projects, potential project delays or cancellations, and increased financial risks for investors. BMI warns that an intensified trade war could disrupt bilateral and multilateral agreements, resulting in greater market uncertainty. Additionally, rising costs in renewable energy could slow the decline of energy emissions, inadvertently leading to continued reliance on fossil fuels (Fitch Solutions, 2024).
A South African Perspective
South Africa’s solar industry is expected to play a pivotal role in the nation’s shift towards sustainable energy. The country’s vast solar potential, along with decreasing costs of photovoltaic (PV) system components, has made solar energy an increasingly attractive choice for businesses and independent power producers.
The adoption of EVs has also gained momentum, particularly following the South African government’s White Paper on EV integration, released in December 2023. The policy outlines a roadmap for incorporating EVs into the transport system to reduce greenhouse gas (GHG) emissions. In October 2024, President Cyril Ramaphosa announced preliminary plans for tax rebates or subsidies to encourage consumer adoption of EVs. This development is expected to drive increased investment in EV infrastructure in 2025.
Looking Ahead
The 2025 energy landscape is shaping up to be one of shifting strategies and heightened trade risks. While renewable energy investments continue to grow, geopolitical challenges and economic constraints will require governments and businesses to adapt accordingly. In South Africa, the momentum in solar energy and EV adoption will likely persist, but policy incentives and strategic investments will be crucial in navigating the global energy transition.
References
Fitch Solutions. (2024). Energy Transition Key Themes 2025: Risks Rising, Shifting Strategies. https://www.fitchsolutions.com/
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