Editor Areti Ntaradimou asks industry experts what the major innovations and trends will be in the next 25 years.
The evolution of the energy sector over the past 25 years has surpassed every expectation and today, energy forms a key pillar of political and social strategies in many of the world’s economies. And given the continuous development and advancement of new technologies such as artificial intelligence and virtual reality, we can assume that the next 25 years are also going to surpass our wildest dreams.
To celebrate its 25th anniversary, Smart Energy International decided to risk a dive into the future with the help of you, its readers, and a quintet of experts who each identify what they believe will be five key trends over the next quarter century.
Marine Cornelis, Executive Director of Next Energy Consumer, believes “the future of energy must put people’s needs at the centre”. But she stresses that “this would be meaningless if it were not accompanied by very concrete actions favouring the climate”.
“This demands decarbonisation of the energy system and massive efforts to reduce the energy consumption of buildings.
“And this implies two things: making energy services and home automation more energy efficient and user-friendly by adapting to people’s lifestyles and taking bold steps to accelerate building renovation, contributing to eradicating energy poverty.”
- Race to net-zero and energy efficiency of electronic appliances: the new labels introduced at the end of 2020 will further increase their quality and energy performance.
- Circular and sharing economy: the ‘right to repair’ should also help extend electronic appliances’ life span and fight against programmed obsolescence. Do we need to own an object to use it?
- Decentralised energy generation: local solar energy production by a community of neighbours supported by the municipality could accelerate the trend. How do we make it mainstream?
- Financing the energy transition is key: I don’t have the answers – only questions: How do we ensure that investments in RES constitute 100% of the portfolios of investors (banks, pension funds, energy companies… and everyday people)?
- Mainstreaming different circumstances in energy: to date, women represent only a third of the jobs in RES and often in lower-quality jobs. Women from all backgrounds need to be empowered and for this, we need specific strategies and data. But this won’t be enough: programmes and policies to be explicitly anti-racist. This is the only way the EU will make sure that the energy and climate transitions are just and inclusive.
Alicia Carrasco is Chief Executive Officer at olivioENERGY. She believes that “when it comes to applying new business models in our energy system, the path is not as straightforward as the articles of the Energy Directly imply. For instance, energy communities still need a clear scope and robust regulation”.
- It will be the consumer’s decision to no longer be a passive buyer of energy, but an active participant in the energy sector, as well as a member of the energy community.
- Renewables will make demand-side flexibility necessary to grid management and therefore of the utmost urgency.
- Artificial Intelligence will enable the integration of renewables and grid optimisation.
- Regulations at both a European and a local level regarding both new technologies and sustainable resources are going to be of the utmost importance.
- The resilience of the grid, especially due to climate change and the recent example of Texas, will also be a focal point of the energy sector in the years to come.
New Energy Landscape
Jan Okko Ziegler is Head of Market Studies for Global Infrastructure & Networks at Enel. He believes the EU’s energy decarbonisation strategy “has an important impact on the European distribution networks”.
“Electrification of transportation, increased penetration of distributed energy resources, pervasive digitalisation along with new business and societal technologies are shaping the distribution grids of the future.
“According to BloombergNEF’s New Energy Outlook in 2020, in Europe the share of generation capacity directly connected to distribution grids is expected to grow significantly, from 24% currently to 67% in 2050.
“Worldwide, the average size of new power plants by 2050 will be six times smaller than today. Therefore, to ensure a robust and reliable service that will accommodate e-Mobility, renewables and other forms of electrification, distribution network operators will have to deploy investment programs.
“In addition, distribution grid operators should also consider the sustainable principles that will contribute to the energy transition by distributing electricity in a sustainable and affordable way.”
Electrification, digitalisation, decarbonisation, climate resilience and, to a lesser extent, urbanisation will be the main trends for the energy sector in the near future.
Population growth and increasing levels of urban concentration will require a massive effort to expand and strengthen distribution grids, which will play an increasingly central role in electrification and decarbonisation as well as helping to make our cities more climate resilient.
Driven by the energy transition, Distribution System Operators (DSOs) will evolve from the traditional distribution business model to service enablers with the mission to ensure a more innovative and sustainable platform. As more and more activities depend on electricity, DSOs will need to provide reliable service in terms of quality and continuity.
Luis Morencos, Energy Industry Executive at Microsoft, believes that the energy transition “will be accelerated by breakthrough innovations in storage, sustainable energy technologies and new materials”. He also states that data “will become a transition enabler to accelerate green capacity development, orchestrate a more distributed system, promote the development of new business models, create new ecosystems, empower the consumer, incorporate CO2- impact and get closer to autonomous systems”.
“Data sharing and data interoperability will enable trusted ecosystem for utilities to become data operators.”
- AI ethics: AI will be infused across power and utility operations. Man-machine relations will require the industry to develop AI ethics codes and evolve regulation to maximize value, while retaining reliability, resilience and security.
- Grid Orchestration: Electrification of industries, decentralised two-way flow of power with prosumers and industrial clusters will introduce a complexity of grid operations that will require improved data-driven decision support.
- Security: Electric critical infrastructure represents the backbone of the digital economy and the new role of utilities as data operator will elevate them as a top target for the cybercrime industry.
- Sustainability: As stated by Net Zero by 2050 IEA’s Analysis, the execution of countries’ pledges to net zero goals need to be accelerated. CO2-intensity will replace kWh as the energy measure. The energy industry will play a key role in reaching these goals, by moving from molecules to electrons, and leverage data and technology to manage carbon and accelerate energy efficiency.
- Tech-Intensity: Every company will be a tech company. Utilities will pivot to data operators and re-imagine their business models and future positions in the energy market with a native digital approach. The new generation of energy workers will be native digital and digital skilling will play a key role.
Ilaria Conti, Head of Gas at the Florence School of Regulation, says that the energy sector has undergone such evolution that it is difficult to predict where we may be in 25 years. What is certain, she says, “is that we will have a completely different energy sector from today”.
- Energy will not be a standalone sector anymore; it will be deeply rooted and integrated with other sectors.
- I see a future where an average citizen can, with the use of a simple smart appliance, be in control of basically all the equipment of any kind, including energy related, in their house.
- We will see in market terms that we will have more and more integrated companies. So, companies not specialised anymore in one commodity or in one specific market segment. But companies that are hybrids and that develop dimensional products, providing solutions in telecommunications, and at the same time connecting, for example, renewable sources of energy.
- It will be a different setting, the categories will change, we will not talk anymore about gas, electricity, coal. Actually, coal will probably disappear, at least in Europe. And we will talk about energy vectors, energy providers, energy carriers.
- We will also have internet communities that are not geographically based, but internet-based. This is already happening today – but it will become even stronger in the future.
The experts interviewed are part of the Enlit Europe Impact Circle. Every year, Enlit Europe invites a number of carefully selected energy insiders to help create the programme for the event. The Impact Circle convenes in order to help identify the trending topics in the field of data, grids, markets, the new energy landscape, empowered consumers.