1.3 Energy Technologies are
Undergoing Significant
Change
New energy and information technologies are
developing rapidly and having a significant
impact on energy production and consumption.
1.3.1 The Cost of Clean Energy
Technologies is Declining
Rapidly
Since the early 2010s, the cost of renewable
energy technologies such as wind and solar have
fallen by more than half. Lithium-ion batteries,
which have the potential for use in the transport
and power sectors, have also seen similar cost
reductions (Fig. 4).
1.3.2 New Information
and Communications
Technologies
(Digitalisation) are
Increasingly Being Used
in the Energy System,
with Several Important
Implications
To begin with, digitalisation increases the
demand-response potential for electricity.
According to International Energy Agency
(IEA) forecasts, digitalisation could increase
global electricity demand-response potential
from 3,900 terrawatt-hours (TWh) in 2015 to
6,900 TWh in 2040, up 77%. This level of
demand-response can free up some 185 GW of
generating capacity and reduce the need for
investment in new generation, transmission and
distribution on a cumulative basis by $270 billion
(calculated in 2016 $).
Second, digitalisation has improved the flexibility of the power system to integrate renewable
energy. For example, the IEA estimates that
digitalisation and demand-side response technologies can limit total wind and solar power
curtailment to less than 1.6%. By 2040, total
wind and solar curtailment will be 79% lower
than in 2015. This will enable the global power
system to accommodate 67 TWh of new
renewable energy annually by around 2040 and
avoid about 30 Mt of CO 2 emissions per year.
Third, digitalisation can help improve electrification in the transport sector. Smart charging
of electric vehicles can greatly reduce the
demand for power generation. With the added
flexibility that smart charging provides to power
grids, investment in grids can be reduced by
$100 to $280 billion by 2040 (in 2016 $).
Fourth, digitalisation may affect the energy
use and consumption patterns of manufacturing.
Fig. 3 There have been four
global transitions in energy
supply since 1800. Source
Vivid Economics based on
data in energy transitions:
Global and National
Perspectives by Vaclav Smil
(2017)
4
X. Zhaoyuan and M. Ishwaran
Undergoing Significant
Change
New energy and information technologies are
developing rapidly and having a significant
impact on energy production and consumption.
1.3.1 The Cost of Clean Energy
Technologies is Declining
Rapidly
Since the early 2010s, the cost of renewable
energy technologies such as wind and solar have
fallen by more than half. Lithium-ion batteries,
which have the potential for use in the transport
and power sectors, have also seen similar cost
reductions (Fig. 4).
1.3.2 New Information
and Communications
Technologies
(Digitalisation) are
Increasingly Being Used
in the Energy System,
with Several Important
Implications
To begin with, digitalisation increases the
demand-response potential for electricity.
According to International Energy Agency
(IEA) forecasts, digitalisation could increase
global electricity demand-response potential
from 3,900 terrawatt-hours (TWh) in 2015 to
6,900 TWh in 2040, up 77%. This level of
demand-response can free up some 185 GW of
generating capacity and reduce the need for
investment in new generation, transmission and
distribution on a cumulative basis by $270 billion
(calculated in 2016 $).
Second, digitalisation has improved the flexibility of the power system to integrate renewable
energy. For example, the IEA estimates that
digitalisation and demand-side response technologies can limit total wind and solar power
curtailment to less than 1.6%. By 2040, total
wind and solar curtailment will be 79% lower
than in 2015. This will enable the global power
system to accommodate 67 TWh of new
renewable energy annually by around 2040 and
avoid about 30 Mt of CO 2 emissions per year.
Third, digitalisation can help improve electrification in the transport sector. Smart charging
of electric vehicles can greatly reduce the
demand for power generation. With the added
flexibility that smart charging provides to power
grids, investment in grids can be reduced by
$100 to $280 billion by 2040 (in 2016 $).
Fourth, digitalisation may affect the energy
use and consumption patterns of manufacturing.
Fig. 3 There have been four
global transitions in energy
supply since 1800. Source
Vivid Economics based on
data in energy transitions:
Global and National
Perspectives by Vaclav Smil
(2017)
4
X. Zhaoyuan and M. Ishwaran