Trends in the energy industry: renewables and energy storage
The increasing role of renewable energy sources
One of the long-term trends is the increasing role of renewable energy sources in the global energy mix. According to The International Energy Agency and the report on “Renewables 2018”, shares of modern renewable energy in total final energy consumption will increase from 10,4% in 2017 to 12,4% in 2023. What is important is that renewable energy consumption will increase in all major markets: The European Union, China, The United States, Brazil and India. It is highly probable we may expect this trend for the next decades. Its Increasing role will be clearly visible in the electricity sector: “Renewables will have the fastest growth in the electricity sector, providing almost 30% of the power demand by 2023, up from 24% by 2017. During this period, renewables are forecast to meet more than 70% of the global electricity generation growth, led by solar PV and followed by wind, hydropower, and bioenergy. Hydropower remains the largest renewable source, meeting 16% of the global electricity demand by 2023, followed by wind (6%), solar PV (4%), and bioenergy (3%)”. Using environmentally friendly energy sources is a strong trend and we may take it under consideration and it will continue to grow.
The interest in renewable energy depends to a large extent on oil prices that have become unpredictable. Futurist Richard Watson explains: “The higher the price, the more oil there is, because there’s greater economic incentive to find more, to look for non-conventional reserves or to invest in alternatives like solar or wind. In other words, there are feedback loops”. For example, US market oil prices become unpredictable because of the changes in oil industry like: U.S. oil production, uncertainty over OPEC’s clout, the fluctuating value of the dollar, and shifts in oil demand. “Oil prices have been volatile thanks to unexpected swings in the factors affecting oil prices. For example, global oil prices had fallen to a 13-year low of $26.55/b on January 20, 2016. Six months before that, prices had averaged $60/b. A year earlier in June 2014, they had averaged $100.26/b. Today's oil price fluctuates due to these constantly changing conditions”. These changes creates a foundation for uncertainty and eagerness to look for different energy sources than oil. But financial side is not the only driver of growing interest in renewable energy sources.
In the long term global energy mix will be strongly dependable on international environmental policy. In this year (2019), the uncertainty of future oil demand was caused by commitments to stop climate change. One of predictions says that oil demand could peak by 2025 and it would fall 30% by 2050 if countries kept their Paris Climate Accord commitments. That requires them to cut greenhouse gases enough to stop climate change. Environmental aspects are important to understand the direction of trends in the energy sector. But not only scientifically proven arguments have an impact, Whether we want it or not, changes are also driven by people’s fears and dreams.
To understand how social beliefs may influence the energy sector let’s take a look at nuclear energy. For some people, it is considered as a more effective alternative to renewable sources, when we take a postulate of stop climate change as a priority. Today, the nuclear generates an astounding abundance of Energy, in the U.S. one nuclear reactor produces, on average, 8,23 billion kWh - the equivalent of 25.7 million solar panels. However social fear of nuclear energy and anti-nuclear lobby seem to be even more powerful. A few days after the 11th of March 2011, when a tsunami and earthquake caused the most significant nuclear incident since the 26th of April 1986 Chernobyl disaster, called The Fukushima Daiichi nuclear disaster, Germany’s Government declared a decision to phase out nuclear energy till 2022. Nuclear energy is described as a more effective and stable low-emissions energy sources than renewables. One of the biggest problems with solar and wind farms is their dependence on weather and a variability in production - daytime overproduction, or evening surge demand, but this can change with innovations in the field of energy storage.
The role of energy storage
The increasing role of renewable energy sources are strictly connected to the second big trend in energy sector: looking for ways to store the energy, especially produced by these sources. Futurist Richard Watson writes that we face now an energy storage problem. We don’t have efficient ways to store energy, and this is a big barrier for renewables. During a Capitol Hill briefing organized by the Battery Council International on February 12, 2019 in U.S. Congress, a Democrat Mark Takano said: “Energy storage is the future of renewable energy. Cheap grid-scale storage means that renewables can compete with fossil fuels on cost alone. This is not only better for our environment, but also makes our national grid more secure from natural disasters”. Without good system of energy storage, there is no way to based on wind and solar power, because they are not always fully available, so the energy production from these sources is hard to predict and estimate.
One of the interesting ideas is to use electric cars as a energy storage. In addition to the transport function, such cars could act as moving batteries on the road, which not only take in, but also give electricity to the grid. Study of the Lawrence Berkley National Laboratory in California from 2018 shows that using electric vehicles (EVs) as mobile power storage could eliminate the need to build costly stationary grid storage for energy from renewable sources. Here is strong temptation for developing this approach, because of financial matters. Co-author of the study, Dr. Samveg Saxena from Berkeley Lab, said: "we found that several billion dollars of capital investment could be saved if EVs are used in lieu of stationary storage. Those savings could be redirected to further accelerate the deployment of clean vehicles and vehicle-grid integration, and could even be used to pay EV owners when their vehicles are grid-connected with controlled charging". Using electric vehicles as mobile energy storages is fascinating to observe especially in the context of innovation in the energy industry.
This year Tesla has presented Megapack – a new massive battery, which provides energy when a local electrical grid gests overloaded. Megapack requires 40% less space and 10x fewer parts than current systems on the market. As a result, this high-density, modular system can be installed 10x faster than current systems. Probably we may expect more innovations in this field.
How the future in energy industry looks like?
Thinking about possible scenarios of the future require taking under consideration more trends like virtualization, localization, competition for resources, population growth, wireless recharging, surge pricing, smart meters, boom in energy storage tech, micro-grids, community grids, resource nationalism, diversification of energy sources, ultra – efficient solar, next- generation biofuels (you may find these trends on a map of mega trends and technologies 2017-2050 created by Richard Watson). However we may expect new innovations in energy storage and probable changes in energy mix in some countries.