3D Energy Trends Explained
Three key trends steer the future of the global energy sector, and these are often abbreviated as 3D. In t his short article we provide an overview of what these 3D energy trends are, and how each contributes to industry transformation.
Decarbonization involves the production and consumption of renewable energy, as opposed to the fossil fuels. Decarbonizing the power sector means reducing power generated from carbon-emitting sources and as a result, lowering the carbon emissions per unit of electricity generated. Globally, firms and governments need to decarbonize their power sectors as a crucial part of meeting the emissions reduction targets envisaged in multilateral accords such as the Paris Agreement. Some studies predict that an entire decarbonization of the power sector by around 2050 is necessary to fully meet the Paris Agreement’s target. Decarbonization can be achieved by increasing the utilization of low-carbon energy sources, particularly renewables, and by reducing the use of fossil fuels. Worldwide, renewables now produce a third of total power capacity.
Decentralization involved the use of new technologies that foster and disseminate storage and generation of electricity close to consumption centers. At the moment, electric power is typically generated in centralized large power plants. From those plants the generated power is transmitted to cities and further distributed to consumers. However, the advance of renewables, which consolidated wind and solar as reliable, storable and inexpensive sources of power, gives power generation a great potential for decentralization. The trend is for distributed solar farms generating and storing power next to consumer with substantial capillarity. Furthermore, wind farms can be decentralized where wind conditions and economic conditions allow it to. The greatest benefit of decentralized power generation is customer proximity, which further decreases energy costs related to transmission and distribution.
Digitalization is a result of great investments made in automation of high, medium and low voltage electrical networks, both for business and home consumers. This is basically part of a larger movement of society on the path of shared knowledge and a collaborative economy, leveraged by platforms that are emerging to better monitor electric power in every part of generation and consumption. Digitalization is helping to improve safety, productivity, accessibility and sustainability of energy systems around the world. Energy suppliers can use digital tools to improve operations. Similarly, consumers can use digital tools to improve their user experience with e.g., monitoring the market prices of energy in order to decide when to use certain electro-appliances.
These three major trends suggest that consumers of the future will be unchained from power utility companies: decarbonization allows consumers to generate their own renewable energy; digitalization allows them to control and monitor power generation; and decentralization allows consumers to send any power generation surplus to the electrical grid.
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