DNV predicts global electricity demand will double by 2050 due to reduced fossil fuel reliance. DNVs New Power Systems report suggests grid expansion, congestion solutions, and new business models to accommodate rising demand and wind and solar generation, making grid expansion affordable due to growing technology efficiencies.

GROWING DEMAND FOR ELECTRICITY & RENEWABLES

Global electricity demand is expected to surge due to economic growth, electrification of transportation, heating, and industry, and the development of data centers for AI applications. By mid-century, electricity will make up 37 per cent of global final energy use, up from 20 per cent in 2023.

This growth is accompanied by a shift towards renewable energy, with wind and solar expected to generate half of the world's electricity by 2040 and 70 per cent by 2050.

The decarbonization trajectory predicts nearly 90 per cent of electricity will come from non-fossil sources by 2050.

FLEXIBILITY & DEMAND-RESPONSE

The growing use of renewable power demands flexibility and demand-response systems. As variable renewable energy sources expand, short-term flexibility will double.

New services like synthetic inertia products and fast frequency response are needed. Lithium-ion battery technology is expected to dominate, offering three times more storage capacity than hydropower and pumped storage by 2050.

'Deep digitalization, including the application of AI, is crucial for managing the increased complexity of a renewable-dominated power system,' explains Remi Eriksen, Group President and CEO at DNV. 'So there will be a rapid growth in both information technology and operational technology in the coming years which must be supported by a robust approach to risk management, particularly on cyber security, to reap the benefits of the new power systems.'

GRID EXPANSION IS BOTH NECESSARY & AFFORDABLE

The expansion of the electrical grid poses a significant challenge in the energy transition, with global capacity needing to grow 2.5 times and annual grid expenditure more than doubling to $970 billion by 2050.

Despite rising costs, efficiencies in grid technology and increased distribution will likely keep consumer charges stable.

Predicting future unit electricity costs is challenging due to tax treatments and government incentives.

Electrifying end-use sectors like transport and heating will lead to lower household energy bills.