Five predictions for the energy and utilities industry in 2022
Author : David Hall, VP Power Systems at Schneider Electric UK and Ireland
16 December 2021
The global shift towards more climate-conscious energy efficiency has accelerated the need for sustainable technology to deliver a cleaner, greener, and fairer energy system.
The UK’s 2050 net-zero pledge deadline looms. Together, the IPCC’s latest report on climate change, COP26 and the UK government’s 10-point-plan for a green industrial revolution have added greater focus. Businesses and consumers alike have a growing appetite for sustainable initiatives.
Technologies for renewable electricity generation, energy storage and power grids are essential to decarbonise existing supply and meet growing electricity demand from rapid electrification of buildings, transport, and industry. Clean technology, modern power systems and green energy sources present a vast investment opportunity for businesses.
Considering this, we predict the top five trends that will fuel the next stage of the energy management revolution in 2022.
1. Electric vehicles: Push the pedal on a low-carbon future
The UK government has already set a clear direction for the industry by banning the sale of new petrol and diesel cars by 2030 and trucks by 2040 to reduce carbon emissions and stimulate the “green economic recovery”. As the adoption of EVs accelerates, however, the added pressure they place on ageing electricity networks will continue to increase.
Energy companies and the government must incentivise the transition to electric vehicles towards a low carbon future. A big part of this is ensuring that the infrastructure and power supply match the demand for EVs. Work is underway to put in place a more resilient foundation to connect and power more significant numbers of EV charging points. DNOs need to work quickly and get this right to enable a successful transition from petrol and diesel to EVs and ensure a positive impact across the broader energy network.
2. Microgrids fit for the future
Another important area to get the ball rolling on sooner rather than later is to ensure the grid is ready for a digital future. More and more of our energy supply will come from disparate renewable resources such as microgrids and intermittent renewable energy sources – creating a need for a more decentralised energy supply network.
According to our recent research, 25.4% of UK and Ireland businesses claim to have installed a microgrid or renewable power source (e.g., solar, wind) to reduce their environmental impact. While offering a reliable alternative to the traditional central power grid, the grid itself needs to cope with more complex and bi-directional flows involved with these new technologies and monitor supply and demand more effectively. Investing in the digital grid will be critical to opening up these possibilities for a more clean and efficient energy supply network in 2022.
3. SF6-free – the silver bullet to sustainability
SF6 (sulphur hexafluoride), while rare in the atmosphere, is one of the most potent greenhouse gases in the world. One tonne of SF6 has the same global warming potential as 23,500 tons of carbon dioxide. Most SF6 used in the electrical industry is for electrical insulation and current interruption within power networks.
Replacing SF6 with pure air solutions is essential to reducing environmental risk across power networks. SF6 currently has a special exemption for use in electrical distribution across many geographies. However, as alternatives become more readily available, the EU (European Union) and a range of countries and territories are considering measures to restrict its use, which we expect to hear more about next year.
4. Embrace the growing opportunity in onshore wind
The growth in clean energy projects such as wind power is essential to a more sustainable world. It’s becoming more apparent that wind energy is more efficient, produces no greenhouse gas emissions and is becoming increasingly popular as a renewable energy source. By 2040, the world of electricity will be profoundly different: the share of electricity in everything we do will double, reaching at least 40% of final energy consumption, and six times more electricity will be generated from solar and wind. Even with its benefits, connecting wind to the power grid brings with it a unique set of challenges, including surges, dips, distortions, and stringent grid code requirements.
Next year, wind developers should also look towards combining wind generation with energy storage to be more flexible. The time is ripe for increased investment in onshore wind.
5. Net-zero commitments at the heart
With the focus on sustainability and COP26 taking the world by a storm this year, it is clear businesses need to ensure this is a priority in their plans. In fact, according to Schneider Electric research, more than nine out of ten (91.5%) UK & Ireland respondents said reducing their carbon footprint is a priority for their organisation, with a quarter of businesses (27.4%) saying it is their top priority this year.
As we move into 2022, we’ll be focusing more on ensuring these climate ambitions turn to action. Businesses must act now to handle energy management better to reduce energy waste and create a greener future. Acting sustainably, reducing our carbon footprint, and building smarter cities is the only way we will reach net-zero targets.
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