Global energy demands are outpacing the supply of green energy. For now, the solution is to rethink and plan ahead, argues Didem Cataloglu.
World leaders have well-stated their targets at COP26 to reduce emissions through renewable energy.
According to the International Energy Agency (IEA) in 2020, nearly all new electricity capacity was renewable energy, which represents 90% of new power capacity expansion globally. The limitation, however, is that global demand for renewable energy is surging beyond the supply rate.
An IEA report indicates “…electricity generation from renewables – including hydropower, wind and solar PV – is on track to grow strongly around the world over the next two years – by 8% in 2021 and by more than 6% in 2022. But even with this strong growth, renewables will only be able to meet around half the projected increase in global electricity demand over those two years, according to the new IEA report.”
To meet COP26 requirements, utilities will need to invest significantly in renewable power generation, such as wind and solar, which have shown remarkable growth. In addition, utilities will need to allocate more funds on battery technology, which is already making good progress toward large-scale implementation.
Another crucial focal point is that the industry will need to train or reskill more professionals in wind, solar and hydroelectric power. A major portion of the COP26 accord reached last year emphasized the need to reskill workers from traditional energy jobs to fill emerging positions in renewable energy. As the IEA points out, achieving this goal will require collaboration between governments, employers, regulators and the workforce.
Beyond renewable resources, a wide range of technologies and software are also now available to guide decision-makers to best optimize their spending.
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Advanced financial modelling software enables producers to close the gap between supply and demand of diverse energy sources, while also preparing for possible shortages in the future. Systems, such as asset investment planning (AIP) software, enable decision-makers to explore different “what-if” scenarios to determine optimal pathways in service improvement and contingency plans for potential disruptions.
These insights can drive better deployment of assets, resources (labour and funds), and production capacity to meet short, medium and long-term energy demands.
Utilities can also optimize spending on their existing energy grids. Efficient investment not only supports cost reduction efforts but also enables more rapid integration of new power sources onto the grid.
For example, one North American producer found a way to optimize its capacity and reliability. Using advanced asset management tools, this producer was able to model optimal strategies for CAPEX and OPEX.
These strategies provide the best possible ROI, while controlling risk and meeting service levels for its expansive transmission network. Furthermore, it can set roadmaps for the implementation of those strategies, despite a shortage of qualified labour.
To reduce the current supply and demand gaps, AIP software and the proliferation of skilled renewable energy professionals are among the many essential elements that will empower utility companies to accelerate the achievement of their net-zero transition goals.
Didem Cataloglu is Chief Executive Officer of DIREXYON Technologies.
