Rapid electrification of energy demand and the rise of energy from wind and solar sources will lead to massive growth of the world’s electricity transmission and distribution systems, according to DNV GL’s Energy Transition Outlook 2018: Power Supply and Use report.
“The Energy Transition Outlook has some very encouraging findings, and the good news is that the energy transition is achievable and affordable. However, the rapid transition we are predicting is still not fast enough to achieve the goal of the Paris Climate Agreement,” commented Ditlev Engel, CEO of DNV GL’s Energy business. “If we are to decarbonize the world’s energy system at the required speed, we need to adapt and automate our electricity grids, and regulators and politicians will need to re-think, re-shape and take major policy decisions about market models.”
The report, which provides an outlook of the global energy landscape, forecasts continuing rapid electrification, with electricity’s share of the total energy demand expected to more than double to 45% in 2050. This is driven by substantial electrification in the transport, buildings, and manufacturing sectors, including the uptake of private electric vehicles (EVs).
The surge in global electricity production will be powered by renewable sources accounting for an estimated 80% of global electricity production in 2050. As the costs for wind and solar continue to fall, those two energy sources are set to meet most of the electricity demand, with solar PV delivering 40% of electricity generation and wind energy 29%.
The rapid electrification will lead to major expansion of electricity transmission and distribution systems both in the length and capacity of transmission lines. DNV GL predicts that the total installed power line length and capacity will more than triple by 2050.
The system operators’ tasks will become substantially more complex; yet there may well be less energy flowing across the networks, resulting in fixed costs becoming a greater part of the bill.
High fractions of solar and wind will create a need for increased use of market mechanisms and changes to the electricity market fundamentals in many countries. This requires major regulatory intervention. Market based price signals are crucial to incentivize innovation and develop economically efficient flexibility options.
The full Energy Transition Outlook 2018: Power Supply and Use report is available for a free download at eto.dnvgl.com. This publication is part of DNV GL’s suite of Energy Transition Outlook reports.