The International Energy Agency (IEA) has released its World Energy Outlook 2023. The report shares an upbeat update on the global progress towards achieving aspirational Net Zero targets. It highlights that the number of distributed energy assets is set to grow exponentially within the next decade. Government-set decarbonisation goals are accelerating this electrification. The IEA therefore predicts that the world as we know it could look very different by 2030.
The IEA forecasts:
- 10 x as many electric vehicles
- Solar power growing to offer more than the US power system currently generates
- Renewables reaching a 50% share of the energy mix
- Heat pumps and electric heating systems to exceed the sale of fossil fuel boilers
- 3 x as much investment in offshore wind projects
“The transition to clean energy is happening worldwide and it’s unstoppable. It’s not a question of ‘if’, it’s just a matter of ‘how soon’ – and the sooner the better for all of us,” says Fatih Birol, IEA Executive Director.
Coordination and cooperation are the watchwords in the report to help support this transition. The report also encourages policymakers to consider its findings at COP28.
A spotlight on energy flexibility
The process to decarbonise the power system is well underway across the UK and Europe. Renewables contributed a 42.1% share of electricity generation in Q2 2023 in the UK, and are nearing a 40% share in 2022 across the EU.
The evolution of DNOs to a DSO structure already shows a shift in mentality within the energy industry, as key stakeholders start to adapt in the face of these trends.
This transition to a decarbonised, electricity-first energy mix is accompanied by a growing understanding of the need for power flexibility – one of the solutions highlighted in the report.
The IEA shares that the rapid growth of solar PV is bolstering the need for short-term flexibility. At the same time, wind farms can become “an important driver of, longer term, seasonal flexibility needs as its share increases in power systems across the world.”
The role of demand side response
More heat pumps, electric cars, and other distributed assets in the future will also make demand less predictable. The report shares that demand side response can provide a solution.
Demand side response is when system operators use market signals to ask flexibility providers to increase or decrease their use of electricity.
The IEA points to the need for adequate price signals, digital tools, and smart controls, alongside regulatory support, to ensure the industry can make the most of the demand side response opportunities.
“The IEA report has some compelling projections for the energy transition, but crucially also puts a spotlight on the critical role that modernising the grid has to play to make that happen,” says Chris Broadhurst, Chief Commercial Officer at Electron.
“With a smarter grid, we can unlock the abundance of renewable energy faster and cheaper than with grid reinforcement alone. This means dynamically optimising where and when we use energy so that we can reduce our reliance on gas, whilst also reducing congestion, connecting more clean technologies faster, and ultimately reducing costs for end consumers.”
How can a flexibility market platform help?
A solution is needed to manage flexibility while ensuring scalable processes to meet current and future energy demand.
A market platform like ElectronConnect can help network utilities and municipal suppliers to coordinate local flexibility markets at scale – through demand side response, as well as other use cases.
“This is the mission that we’re on at Electron – to help system operators and network utilities launch operate and scale local flexibility markets so that we can unleash the abundant potential of renewable energy,” says Broadhurst.
Want to learn more? Reach out to our team of experts.
