Published Date: 2019-06-14 | Views: 122 | Miscellaneous
Energy and power systems around the world are predicted to go through rapid transitions and a significant transformation as customer expectations keep changing and competitive and technological forces become more prominent in future. The demand for a high-tech digital experience and exploration of new technologies to cater to the sophisticated energy and power needs of customers are expected to bring advanced changes in the industry. Industry observers anticipate aggressive rise in solar and wind power generation, growth in the natural gas sector, and decrease in coal-fired power generation in the coming years. This could be due to increasing focus on reduction of carbon footprint and the rise of key factors such as customer preference and economics.
The global energy and power industry is witnessing great improvements in operations because of the advancement in technology. Growing adoption of customer-interface technologies and smart grids is a good example of how technology is positively impacting the global energy and power industry. Integration and digitalization of supply chain management, back-office systems, and operational systems are prophesied to increase even more in the global energy and power industry. Players are anticipated to make strategic thinking and technological awareness as their core of strategy and planning.
According to the International Energy Agency’s (IEA) World Energy Outlook 2018 report, growth in the total global energy demand could be lower than that in the total global electricity demand until 2040. Emerging economies are predicted to account for most of the global power generation by 2040, with Africa exhibiting the quickest growth. Power generation in Africa is foretold to increase 140% by 2040, followed by the Middle East and Asia Pacific with 96% and 84% increases respectively. Central and South America is also expected to show strong growth in power generation with a 68% increase. However, Europe and North America are projected to show low power generation growth with a 15% increase.
Establishment of Joint Ventures and Capacity Expansion as Key Growth Strategies
US electric power holding company, Duke Energy has a market capitalization of $61.5 billion and operating revenue of $24.5 billion, as of December 2018. It serves 7.7 million electric retail customers in six US states and 1.6 million natural gas customers in five US states. According to the company’s press release in June 2019, Duke Energy Florida will be building its three largest battery storage projects with total capacity of 22 megawatts. The projects are expected to improve Florida’s smart grid.
ENGIE, a French natural gas distribution company, operates in various fields such as petroleum, renewable energy, nuclear, natural gas, power generation and distribution, and energy transition. In May 2019, it created a 50/50 joint venture with Energias de Portugal (EDP) in the fixed and floating offshore wind sector. In April 2019, it intended to form a 50/50 joint venture with Tokyo Gas to create Heolios EnTG in Mexico. The joint venture will develop and operate six renewable energy projects.
British multinational electricity and gas utility company, National Grid announced the inclusion of two new strategic fund investments and four new portfolio companies through its investment and innovation arm National Grid Partners in June 2019. In the same month, the company introduced its first-of-its kind new battery storage system in Pulaski, New York.
US-based clean energy company, NextEra Energy claims itself to be the world’s largest wind and solar energy producer. Électricité de France (EDF), a French nuclear electric power generation company, announced in May 2019 that its subsidiary EDF Renewables in the UK has expanded its existing Edinburgh office for covering 60 new jobs created for the offshore wind farm project Neart Na Gaoithe.
Rapid Increase in Energy Consumption to Boost Growth of Global Smart Grid Market
The global energy and power industry includes leading sectors such as smart grid, wind power, battery, nuclear power, and solar photovoltaic. Demand for smart grid is anticipated to increase with growing interest in smart cities, increasing energy consumption, and rising investment in grid digitalization using smart technologies. Wind power is predicted to attract market growth while riding on its emergence as a reliable and cost-efficient energy source. Promotional systems, international incentives, and rising energy prices are some of the main factors pushing the demand for wind power.
The growth of the global battery market could be attributed to the swelling demand for plug-in hybrid electric and electric vehicles. Reduced prices of raw materials and the advent of new applications could be other factors strengthening the rise of the global battery market. Governments and energy companies are expected to invest in nuclear energy due to growing energy concerns birthing out of the depletion of fossil fuel reserves and increasing demand for clean power. Adoption of solar power is prophesied to see a rise as a result of the tremendous growth in energy demand and aggressive reduction in the cost of solar technology.
According to the International Energy Agency’s (IEA) World Energy Outlook 2018 report, combined energy demand from OECD countries is expected to decrease 4% by 2040. Contrastingly, developing countries are foreseen to show a 45% growth in their combined energy demand by the same year. This could result in higher growth in the energy demand from developing countries compared to developed ones. As per the report, developed countries are projected to account for a 30% share whereas developing countries are forecast to secure a 70% share of the global energy demand in 2040.
Top Trends of Global Power and Energy Industry
● Power Consumption: Electricity demand is projected to show robust growth in the coming years, mainly due to increased electrification across important end-use industries.
● Renewables: Renewable power generation is foretold to secure a substantial share of the total power generation globally, marking a drastic shift from fossil fuel-based power generation.
● Gas: Among fossil fuels, gas is probably the only one anticipated to collect a strong share of the global energy demand. However, it could face intense competition from renewables.
● Energy-related Emissions: Analysts expect carbon emissions to decrease because of the drop in coal demand observed in the power industry.
● Oil: Oil demand is predicted to exhibit growth in the near future. However, its rise could be diluted by the use of technologies promoting more improved efficiency and the implementation of new policies.
● Regulatory Changes: Conventional allowed rate of ROI and cost-of-service regulatory structures are less likely to promote innovation in the global energy and power industry. However, thankfully, there could be new opportunities created with the development of more flexible regulatory initiatives.
● Greening of Power Grids: Decarbonization and grid greening have been at the top of the minds of governments and regulatory authorities. Renewable energy demand is foreseen to increase as thermal power generation decreases.
● Grid Flexibility: It has become a global theme in the energy and power industry. Companies are investing in power interconnectivity and energy storage innovation to increase power systems connectivity and improve grid flexibility.
● Electrification: When paired with renewable power, electrification can help in largely reducing energy-related carbon dioxide emissions. The combination can also have socio-economic benefits and help in decreasing local air pollution levels. Furthermore, it could be cost-effective than fossil fuel-based alternatives.