In a groundbreaking report released by DNV, global electricity demand is projected to double by 2050, propelled by a shift away from fossil fuels towards renewable energy sources.
The “New Power Systems” report outlines a pathway towards a decarbonized energy system, emphasizing the critical need for extensive grid expansion, solutions to manage grid congestion, and innovative business models to accommodate the rising demand for electricity generated from wind and solar power.
DNV forecasts that advancements in grid technology will help mitigate costs associated with grid expansion, ensuring that global grid charges remain stable or even decrease over the long term.
The surge in electricity demand is primarily driven by global economic growth and the widespread adoption of electric vehicles, electric heating, and electrification in industrial processes. Furthermore, the proliferation of data centers, particularly those supporting artificial intelligence applications, is expected to contribute significantly to the increased electricity consumption.
AI technology, highlighted in the report, is identified as a crucial tool for enhancing both the provision and utilization of power in the evolving energy landscape.
According to the report, electricity is set to constitute 37% of global final energy consumption by 2050, up from 20% in 2023. This increase underscores a dramatic shift towards renewable energy, with wind and solar power projected to supply half of the world's electricity by 2040 and 70% by 2050.
DNV's decarbonization trajectory suggests that nearly 90% of global electricity production will come from non-fossil fuel sources by 2050. This transition necessitates flexibility in the energy system to accommodate the variability of renewable energy sources, which are expected to expand ninefold.
To meet these challenges, new ancillary services such as synthetic inertia products and fast frequency response will be essential, requiring adaptation of market structures and regulatory frameworks.
Remi Eriksen, group president and chief executive at DNV, emphasized the role of digitalization and AI in managing the complexities of a renewable-dominated power system: “Deep digitalization, including the application of AI, is crucial for managing the increased complexity of a renewable-dominated power system.”
Eriksen further stressed the importance of robust risk management, particularly in cybersecurity, to fully capitalize on the benefits of these advancements in power systems.
