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3 Megatrends Shaping the New World of Energy

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The world demand for energy is increasing.

Electricity consumption is projected to grow twice as fast as all other forms of energy consumption. This rapidly rising demand applies pressure to many utilities and businesses to increase energy efficiency and self-generation initiatives. In order to meet this demand, the business community must become radically more efficient with the way it uses energy.

Global megatrends have already started to affect the energy landscape — energy is becoming more decentralized, decarbonized and digitized.

Trend 1: Decarbonized

Pressures from consumers, investors and regulators have caused companies across the globe to dedicate more time and resources to reduce their environmental impact. Further supporting this growth are regional and global regulatory initiatives such as the European Energy Directive (EED) and Paris Agreement.

Perhaps more importantly, similar pressures have increased the desire for public disclosure of energy and sustainability practices to increase corporate transparency and accountability. And the results already are apparent as the renewable energy market is set to grow substantially over the next 15 years. Consider:

  • The average cost of wind power has plummeted 60 percent since 2009, falling below $20 per megawatt-hour in many markets.
  • Four-fifths of companies are planning to build out their renewables portfolio with multiple types of transactions (e.g., offsite PPAs and onsite installations).
  • By 2030, investment in renewable generation is expected to outpace fossil-fueled generation by 60 percent.

Declining renewable energy costs along with increasing outside pressure have created a unique opportunity: true collaboration between sustainability, energy efficiency and energy procurement teams to develop an integrated renewable energy strategy.

Trend 2: Decentralized

Right now, electricity is generated primarily by large power plants. These plants are owned and operated by utilities or other independent power producers. This centrally generated electricity is then distributed across country- or state-wide grids comprised of transmission and distribution lines, and substations. However, an increasing number of companies are taking advantage of distributed energy resources (DERs). DERs can include technologies such as:

  • Onsite solar panels
  • Combined heat and power
  • Fuel cells
  • Batteries

As DER technologies improve and costs continue to decrease, the grid will evolve. The electricity grid of the future will include many small, decentralized microgrids that give customers greater control over the source of their electricity and greater reliability. In fact, 57 percent of consumers have considered becoming power self-sufficient and new distributed generational capacity will exceed new centralized capacity as early as 2018.

Trend 3: Digitized

As the Internet of Things (IoT) takes hold, it will bring unprecedented interconnectivity to everything from the power plant to the plug and improve the generation-to-consumption value chain. It is not only the number of connected devices that will increase, but also the granularity of the data, which means the volume of bits and bytes will skyrocket.

As a result, organizations will have access to more and increasingly precise data. Energy and sustainability teams will be able to:

  • Plot and visualize the impact of energy utilization at a portfolio level.
  • Make changes to loads in real time to avoid costly peaks.
  • Make better use and purchasing decisions in response to real-time grid signals.
  • Run simulations to understand the long-term impact of initiatives against targets.
  • Improve efficiency by controlling consumption in real time in response to changes in weather, occupancy and production scheduling.

A world that is more digitized, decentralized and decarbonized is pushing business toward true convergence and the reality of active energy management. The practical implications are significant. Companies can use data, technology, and innovation to develop new strategies to reduce CO2 footprints, improve resiliency and create new cost-reduction opportunities.

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Megatrends are creating new opportunities for companies to integrate how they buy energy, use energy and operate sustainably, a concept we call Active Energy Management. What could an active energy management future look like?

Download the full eBook to learn about four examples of the impact of the convergence of energy and sustainability.