Key Power Producers Share Insight on Global Production TrendsBy MBN Staff | Wed, 03/09/2022 - 19:21
The COVID-19 pandemic underlined the importance of renewable energy resources, which in 2021 demonstrated their resilience in face of the pandemic’s challenges. What is more, private companies renewed their commitments to the energy transition through more aggressive ESG practices, with more than 21 percent of the world’s largest companies outlining net-zero commitments, said Ana Ludlow, Chief Commercial Officer, ENGIE. Combined, these demands are pushing energy markets around the globe to develop national energy transition strategies and generate more power while reducing fossil fuel dependency.
The emergence of a global digital economy during the COVID-19 pandemic has highlighted the importance energy generation plays in the daily life of consumers and, by extension, the economy. Energy disruptions have a salient impact on economic productivity, most recently exemplified by the energy crisis Europeans face on the back of a war between Russia and Ukraine. Already, European consumers are seeing dramatic price hikes, which will have a reverberating effect throughout the economy. “Access to electricity is a human right to which companies in the energy sector must be committed,” said Gerardo Pérez, Vice President and Country Manager Mexico, EDF Renewable Energy.
Although most economies have begun their energy transition years ago, the surge of energy demand during the COVID-19 pandemic confirmed that countries must accelerate their efforts. Solar and turbine technology has advanced dramatically. Even though cutting energy costs will play a role in fomenting greater adoption, it should be completed with complementary technologies, such as other renewable technologies, battery storage capacity, and data-analysis. “At ENEL, we have already begun to develop various large-scale projects involving solar, wind and energy storage as a holistic and cost-competitive solution,” said
Bruno Riga, Country Manager, Enel Green Power Mexico. “The fact that renewable energy is fundamental to the energy transition is largely because of the efforts made by power producers years ago,” added Riga.
Renewable energy technology has gotten cheaper and more efficient. The greater competitiveness that storage capacity provides can mitigate an important deficit in renewable energy generation. Current projections indicate that global battery capacity will grow 56 percent over the next few years, to reach an estimated storage capacity of 260GW by 2040. This capacity can provide the control and flexibility needed to address intermittency, one of the biggest problems plaguing the use of renewable energy generation. Altogether, the potential to hybridize has made renewable energy technology the most attractive global option. Renewables will like see an accelerated adoption in 2022 in the following four years to come for this reason, according to the International Energy Agency (IEA). For now, the business case for hybrids needs to be built out further. “Markets are trying to define a standard for hybrid projects that incorporates battery storage,” said Freddy Obando, Vice President Mexico, Central America & Caribbean, AES.
In 2021, demand for renewable technology surged, in turn has renewing existing fears related to how to tackle its problematic intermittency. However, “The drive to decarbonize systems has convinced stakeholders that renewable energy is the go-to solution,” said José Luis García, CEO, Zuma Energía.
Public institutions and companies alike have understood that they cannot get in the way of the global energy transition. Emerging economies have trouble guaranteeing the reliability of their energy systems, especially in the global south where markets are not yet mature but grids are aging. New applications, such as data analysis applied to energy generation, stand to revolutionize the sector and make energy generation more efficient. “Data management will provide real-time insight into how the customer uses energy while producers analyze how they deliver energy,” said García.
Moreover, while the technology for the commercial production of green hydrogen is only at its beginnings, it will likely play a critical role in global efforts to decarbonize within the next years. There are currently more than 350 pilot projects in development, which promise to add a 54MW of green hydrogen capacity to the global energy market. Its main inhibitor, as with many new technologies, is overcoming the technology-cost barrier.