World energy demand is growing exponentially and the paths to meeting it are many. Steadily, and quite quickly, the world is diversifying its primary sources of energy. As we transition from fossil fuels, such as oil and coal, through natural gases and nuclear power and further towards renewable sources dependent on whims of weather, there’s an increasing need to overcome the gaps which arise when the scales of energy supply and demand are out of balance.
With energy consumption expected to increase one third by 2035, we are meeting the challenge of matching supply to demand by drawing on the best technologies we have in generation, distribution, and efficiency in consumption. The solutions we need exist today and there is enormous potential to implement energy efficient technologies: 63% of energy saving potential is found in industry and buildings and 90% of buildings in the EU have not been renovated for energy efficiency. At the same time, it’s documented that GPD increases by 1% annually as a direct result of introducing energy efficiency measures. So, market forces are propelling accelerated use of existing solutions and the development of new technologies too.
‘With the rise of renewables in much of the world, understanding and managing flexibility is becoming a cornerstone of energy markets.’
International Energy Agency, 2017
Rapid decentralization, digitalization and electrification
Led by decentralization, these three trends have the potential to disrupt the conventional electricity system, and they reinforce each other in a virtuous cycle.
The increasing influence of renewables means that the energy system is rapidly evolving to accommodate decentralization.
•Decentralization: With energy generation increasingly located decentrally at or near the customer site, energy providers attempt to meet the ever-changing supply and demand requirements as closely as possible. The vital technologies in achieving the balance are distributed storage, microgrids, demand response and energy efficiency measures.
•Correspondingly, smart systems evolve to balance the grid and connect local energy generation with local consumption, evening out surpluses and deficiencies. Digitalization is a vital ingredient in facilitating the growth of decentral energy systems, enabling open, real-time, automated communication.
•Accelerating electrification of many applications traditionally fueled by hydrocarbons is critical to long-term carbon goals and will be a relevant distributed resource. We will increasingly convert to electric vehicles, smart charging and heat pumps, which in turn lend themselves to locally generated power.
Led by decentralization, these three trends have the potential to disrupt the conventional electricity system, and they reinforce each other in a virtuous cycle. The potential for disruption is further fueled by exponentially decreasing energy costs, innovative business models, and low asset utilization of the electricity grid.
Hybrid solutions deliver the flexibility we need
Hybridization in the form of energy storage is one of the leading recent technologies and is rapidly becoming a megatrend. Energy storage offers us flexible ways to make supply and demand meet by bridging the lag between energy generation and consumption, dampening peak loads and bridging outages.
Energy storage meets the challenges of unpredictabilities, such as the weather (in relation to renewable sources of power) and the needs of industrial customers (with inherent changes in peak demands). This is where hybridization comes into play.
Read more on our website drives.danfoss.com or in our brochure ”Hybridization”.
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