2019 promises to be an exciting year for the energy sector, even though it may be more about laying groundwork than historic breakthroughs. As new technologies begin to find their way into useful, real-life applications, the next months will be full of seizing opportunities, but also, facing challenges.
The core trends that drove growth in 2018 won’t fade away. Declining costs of wind and solar generation, advances in battery storage technologies, progress in smart devices adoption and grid operators’ digital transformation will continue to shape the industry.
What will rise to the surface? Here’s what we expect.
As the severe effects of the rise in global temperature are being felt everywhere on the planet, the world is becoming increasingly aware of the upcoming crisis. Climate is changing. The demand for energy is increasing with the growing population. The instability in geopolitical affairs is expanding. All this leads the industry towards sustainable energy solutions.
Sustainable technologies are no longer an acceptable form of energy production. They are becoming a preferred method for energy production. It is predicted that wind and solar will generate half of the world’s electricity by 2050. Coal, on the other hand, is supposed to shrink by 27%, to only 11% (New Energy Outlook 2018).
As the prices of renewables continue to decline and battery energy storage systems improve, utilities are likely to switch from older, more expensive, coal-based methods to cleaner energy sources throughout 2019 and beyond.
Today, the stability of the electric power grid is maintained through the real-time balancing of generation and demand. Grid-scale energy storage systems could change the status quo by ensuring the power storage from a few seconds to months and, at the same time, contribute towards cutting the costs.
Energy storage is the key to tackle the challenge standing behind the renewables. As the wind and the sun produce electricity only when the weather conditions are optimal, they need to be paired with a solid and effective storage system. Only this way, renewables can ensure smooth and steady power supply.
As battery prices are coming down and their use is increasing, we assume that they will drive the shift towards cleaner energy and storage will represent a core component of the new industry technologies moving into the future.
Despite the hype, smart-home technology is still in the early-adopter phase. For a long time, the complexity of the devices, their prices, lacking privacy protections, and dubious value propositions remained a stumbling block for both consumers and manufacturers.
However, in 2019 the market may finally be gaining traction as people start to understand the technology better and, at the same time, smart devices are becoming more intelligent and more affordable. The number of connected devices is expected to grow significantly from 27 bn in 2019 to 75 bn by 2025 (Statista).
Convenience and security are two main drivers for smart devices adoption. Still, a killer value proposition hasn’t yet emerged. Could it be energy savings? Why not. The Internet of Things has the power to turn every object into a capable computer, ready to sense, analyze and disseminate data, offering consumers more precise information and influence over their environment. With IoT technology, even simple devices, like smart thermostats and lighting systems, not to mention more advanced systems monitoring and automating the use of energy in the whole building could significantly contribute to energy savings.
Dubai is already implementing various IoT based initiatives, like smart lightning systems, which are supposed to save up to 40 percent on LED lighting and up to 70-80 percent on conventional lighting. Transforming the services with the use of new technologies into a more efficient and intelligent ecosystem is a chance for the energy sector to step into the future.
The demand for precise and immediate insights into energy usage is set to continue in 2019. Projected increases in electricity costs and higher demand will lean the industry towards smarter ways for monitoring, controlling and saving energy.
The ultimate solution for both customers and power providers is smart energy management.
On one hand, intelligent systems offer customers not only the precise information about the amount of consumed energy, but also remote control of connected appliances and an ability to manage them better for future savings. On other, improved data analysis and thus, more accurate forecasts of demand, help energy providers to meet their clients’ needs and win over the new ones. Above that, offer new kinds of services like personalized cost-effective recommendations and insights. Additionally, data aggregated from connected devices can be used to better map customers’ behavior and adjust the offer for specific market segments.
In 2019 the necessary ingredients for smart energy management will finally be coming into place as smart devices will reach higher market penetration, the technology will further develop and integrated systems will gradually incorporate new home appliances.
Fierce competition among aggregators and equipment providers, boosted by technology advancements and ever-changes costs of energy are likely to stimulate the further application of demand-side response.
For now, demand response is foremost an opportunity for energy providers. By encouraging their clients to reduce or shift their electricity usage during peak periods, based on time-based rates or other forms of financial incentives, they can assure the continuity in the electricity delivery. But it could also be a chance for consumers to play a significant role in the process of managing the additional grid capacity when the demand for electricity exceeds its existing supply.
Geopolitics will focus on providing and fulfilling policies supporting sustainable growth, while countries and cities around the world will continue to adopt ambitious renewable energy targets.
Power providers will continue to respond to the call for the implementation of new technologies. We expect progress in the energy storage and Smart Grid systems that utilize Artificial Intelligence and Big Data. As these technologies further develop, the capabilities of both might be the ultimate solution for the energy sector, seeking to balance the grid and consumer demand.
All in all, the energy industry is poised for the digital transformation in 2019 and beyond. We hope to see numerous smart initiatives happening around the globe. The UK’s first energy-positive buildings, which generate, store and release more energy than they consume, surely won’t be the last one. Prepare yourself for these irresistible changes and identify the opportunities up front, before they disrupt your business.