Energy industry leaders see an urgent need for greater investment in the electricity grid to better connect regions, ensure reliable distribution of resources and meet climate goals, DNV analysis says.
- 87% of energy executives and experts told DNV there is an urgent need for more investment in the energy grid.
- 91% said that expanding and modernizing the electricity grid is critical to achieving Paris’ climate goals.
- 58% believe that storage systems are the main area where investment is expected to increase, followed by solar integration and electric vehicle infrastructure (both 49%).
- More than three-quarters say smart grid deployment is not happening fast enough to support the energy transition.
In fact, three-quarters (76%) of 400 senior energy professionals interviewed in 75 countries say that existing grid infrastructure cannot adequately connect renewable energy sources to areas of high demand.
DNV predicts that the implementation of the smart grid will not happen quickly enough to support the energy transition without significant investment.
Energy leaders see expanding grid capacity as a top priority today to meet climate goals, particularly in Europe and among those working in the transmission and distribution sectors. In the next five years, this is expected to become more important in other regions as well, particularly in North America and the Asia-Pacific region.
When asked about the areas where investment is expected to increase overall in the coming year, more than half (58%) of respondents mentioned the integration of battery storage systems, followed by the integration of commercial solar (49%) and electric vehicle infrastructure (49%) . .
Smart grids, automation and policy reforms (legislation, regulations, licensing and permitting rules) are expected to be the most powerful drivers of a successful energy transition, where success strikes a balance between speed, quality, stability and cost.
Guy Nicholson, Grid Manager at Statkraft reflects and said:
We need immediate storage connections as well as increased transmission, while a financial mechanism to encourage investment in long-term energy storage would encourage innovation and lower prices
The two biggest obstacles to a faster transition fall between management and technology challenges. Lack of political (or government) support is the main obstacle, followed by bandwidth limitations of existing network infrastructure.
Unlike the iterative changes that have been implemented in the past, preparing our networks for the future requires a radical redesign – a difficult task as we need to maintain their functionality throughout the evolution that is to come.
Power grids are the backbone of our energy system and are critical to the development of renewable energy and the achievement of climate goals. We need huge investments to ensure the integration of renewable energy sources, optimize energy storage, expand the system and achieve energy security
said Ditlev Engel, CEO of DNV Energy Systems.
In addition, DNV predicts that electricity’s share of final global energy demand will double from 19% to 38% over the next 30 years. Despite the geopolitical and economic upheavals of 2022, 74% of respondents believe that the energy transition has either accelerated (45%) or has not slowed (29%).
The need for a faster transition to a deeply decarbonized energy system is transforming the energy industry from within: As these responses highlight, it is now clear that energy leaders see the acceleration of the transition as more of an opportunity than a risk, but policy and effective regulatory plans are lagging behind and need to accelerate the pace. to secure the critical investments still missing for a clean energy future
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