Research from London-based multinational Ernst & Young (EY), in collaboration with intelligence firm International Data Corporation (IDC), has indicated that renewable energy technology advancements are accelerating the pace of the global energy transition.
EY has previously worked with IDC in 2018 to identify decarbonisation, digitisation and decentralisation as key driving forces behind three tipping points in global energy transition. According to this latest research these “drivers” are progressing faster than previously estimated, bringing the tipping points for the energy industry forward by as much as two years.
IDC Energy Insights associate research director Jean-Francois Segalotto said: “This research and analysis has resulted in a multi-regional cost parity model for the energy industry that takes into account both distributed generation and storage, as well as several other enabling technologies.
“For those energy companies that are actively rethinking their business model, the results of this research provide a concrete horizon against which they can benchmark their action. For those that haven’t yet done so, the data provides one of the strongest calls to action.”
The research identifies four key forces that have contributed to the acceleration of global transition efforts: cheaper and more effective renewable technology, ambitious clean energy targets and policy revisions, corporations and consumers giving renewable energy more momentum, and stakeholder action reshaping energy investment.
EY global energy leader Benoit Laclau said: “A revolution in the power sector is driving rapid change in renewable energy supported by digital technologies, the falling cost of battery storage, and empowered consumers.
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“These are quickly ushering in a new energy system, transforming our world into one where cleanly generated electricity will power almost every aspect of our lives.”
In addition to these four key forces, the research also identifies “the electrification of everything” as a major factor in accelerating changes to the global energy mix.
The research predicts that 50% of global total final energy consumption will be electricity, with electrified infrastructures in urban areas (where 70% of the world’s population is predicted to live) being a critical component to building sustainable and climate-safe cities.
Discussing decentralisation in the UK, Association for Decentralised Energy director Tim Rotheray says: “Whether through onsite generation, storage, energy efficiency, capturing waste heat or smart vehicle charging, the next stage of the energy revolution centres on the energy user.
“From homes to industrial sites, we need to help energy users drive a dramatic change in our energy system. Those same users will benefit from lower bills, cleaner air and even a rebate on their power bill for helping the system. Facing the climate emergency is a challenge for everyone. Our analysis shows it can be an opportunity for everyone too.”
Laclau added: “As the countdown to a new energy world accelerates and a new distributed model emerges, energy companies must be agile and take on a proactive role in the transformation of the sector. But the challenges of the sector cannot be solved in isolation.
“When industry players, regulators, governments and companies in adjacent sectors work together, there is greater potential to unlock the innovation needed to address the most complex energy challenges.”