The future of energy demands companies capable of offering multiple sources of energy to meet differing customer needs across the traditional and new sources of energy

Which is why we believe that this energy transition will likely create highly attractive opportunities, spanning both incumbent infrastructure and, selectively, new infrastructure deployments. SuperQwik seeks to invest in energy that is clean, safe, reliable and affordable across the portfolio of energy sources. As a company that is passionate about energy systems, we have our eyes on the bigger picture of how the world demands energy across the various energy sources

Power Industry trends

Globally and locally, the energy sector is transforming, driven by fundamental shifts in policy, technology, economic and environmental demands. The industry is evolving from a predictive, vertically integrated model based on centralised generation flowing in a single direction towards a decentralised, modular model based on bidirectional flow of power enabled by smart metering. This introduces new players to the industry and an unfolding series of demand-centric, value-adding applications. The most significant of these is the shift towards greener, cleaner technology, which aims to reduce overall emissions in line with local and global environmental Agreements

The global shift towards reducing carbon emissions is prompting energy companies to transition from fossil fuels to cleaner energy sources, contributing to a sustainable and low-carbon future. In addition energy companies are moving away from centralized energy systems, towards distributed generation, thereby empowering communities to generate their own electricity and fostering energy independence. Leveraging digital technologies and innovative solutions, will enhance operational efficiency, effective grid management and improved customer experience, whilst embracing the power of digital transformation in the energy sector.

Artificial Intelligence and machine learning can unlock flexibility by forecasting supply and demand

One of the most common uses for Artificial Intelligence (AI) by the energy sector has been to improve predictions of supply and demand. Developing a greater understanding of both when renewable power is available and when it’s needed is crucial for next-generation power systems. Yet this can be complicated for renewable technologies, since the sun doesn’t always shine, and the wind doesn’t always blow.

That’s where machine learning can play a role. It can help match variable supply with rising and falling demand, maximising the financial value of renewable energy and allowing it to be integrated more easily into the grid.

Wind power output, for example, can be forecast using weather models and information on the location of turbines. However, deviations in wind flow can lead to output levels that are higher or lower than expected, pushing up operational costs. To address this, Google and its AI subsidiary DeepMind developed a neural network in 2019 to increase the accuracy of forecasts for its 700 MW renewable fleet. Based on historical data, the network developed a model to predict future output up to 36 hours in advance with much greater accuracy than was previously possible. This greater visibility allows Google to sell its power in advance, rather than in real time. The company has stated that this, along with other AI-facilitated efficiencies, has increased the financial value of its wind power by 20%. Higher prices also improve the business case for wind power and can drive further investment in renewables. Notably, Google’s proprietary software is now being piloted by a major energy company. Additionally, with a more accurate picture of peaks in output, companies like Google are able to shift the timing of peak consumption, such as during heavy computing loads, to coincide with them. Doing so avoids the need to buy additional power from the market. This capacity, if expanded more widely, could have a significant impact on the promotion of load shifting and peak shaving – especially if combined with better demand forecasts. For example, Swiss manufacturer ABB has developed an AI-enabled energy demand forecasting application that allows commercial building managers to avoid peak charges and benefit from time-of-use tariffs.

Transmission System Operators

Transmission system operators (TSOs) are organizations responsible for the reliable and efficient operation, maintenance, and development of the electricity transmission network (Power Grid). They ensure electricity flows from generation sources to distribution networks, balancing supply and demand and maintaining system stability. TSOs are in charge of high and ultra-high-voltage lines spanning a sub-region, region or a country and maintain interconnections with neighboring countries. TSOs operate maintain and develop the grid, while constantly balancing supply and demand, second by second. TSOs are public utilities which provide all competing power-generation facilities with non-discriminatory access to the grid. The TSO informs the decisions of the public authorities who make energy policy. It also educates the members of the general public, helping them to gain a better understanding of electricity so that they can use it more efficiently. Playing a central role within a power system, a TSO is a vital economic partner of businesses and regions, a pivotal player in the energy transition and the move towards renewable energy sources, and a firm proponent of regional-wide electrical solidarity. TSOs work in coordination with Distribution System Operators (DSOs), who are responsible for the distribution of electricity to end-users at lower voltage levels. TSOs focus on the high-voltage transmission grid, while DSOs manage the lower voltage networks. 

One of the greatest challenges of the energy transition is keeping the power grid stable, and balancing the production and consumption of electricity. This is because wind and solar energy are subject to significant fluctuations, and they are increasingly fed into the transmission grid on a decentralised basis via millions of installations.

Intelligent power grids, also known as smart grids, offer a solution here. While power grids previously had the main task of transmitting the electricity produced in large central power plants and distributing it to consumers, a smart grid also fulfils the function of a data network that connects centralised and decentralised production facilities with flexible electricity consumers.

Smart grids are based on intelligent measuring systems, known as smart meters. These are a combination of a digital electricity meter and a communication module, the smart meter gateway. This means power consumption and production are measured in real time and at the level of individual installations. The data on network statuses is transferred continuously into the data network, managed, bundled and sent again by the gateway administrator, to the energy supplier for example. The meter operator takes on the role of the gateway administrator. This is generally the Transmission system operators or local network operator.

Creating the future grid will mean upgrading to new technology

At the moment, most national grids run on AC (Alternating Current) power lines that transport electricity at less than 400kv. To upgrade to a super grid new HVDC (High Voltage Direct Current) or UHVDC (Ultra High Voltage Direct Current) power lines need to be built that transport electricity at over 500kv or 800kv. This allows the electricity to be transported over much greater distances, without energy losses. 

Global electricity supply to meet data centre demand

Global electricity generation to supply data centres is projected to grow from 460 TWh in 2024 to over 1 000 TWh in 2030 and 1 300 TWh in 2035 in the Base Case. Over the next five years, renewables meet nearly half of the additional demand, followed by natural gas and coal, with nuclear starting to play an increasingly important role towards the end of this decade and beyond.

Coal, with a share of about 30%, is the largest source of electricity, though this varies significantly by region, with the highest contribution found in China. Renewables – primarily wind, solar PV and hydro – currently supply about 27% of the electricity consumed by data centres globally. Natural gas is the third-largest source today, meeting 26% of the demand, followed by nuclear with 15%. It should be noted that this analysis considers the fuel mix of the electricity physically consumed by data centres (considering both onsite generation and electricity received through the grid, taking into account the fuel mix of the local electricity systems they are located in) rather than the contractual mix of different data centre operators.

Taken together, renewables remain the fastest-growing source of electricity for data centres, with total generation increasing at an annual average rate of 22% between 2024 and 2030, meeting nearly 50% of the growth in data centre electricity demand. This growth is primarily driven by the rising deployment of wind and solar PV in power systems across the globe, with some of the new capacity financed through PPAs with technology companies. Some data centre operators also invest directly in co-located renewables. Even so, new demand from data centres is a significant near-term driver of growth for natural gas-fired and coal-fired generation, through both higher utilisation of existing assets and new power plants. Natural gas and coal together are expected to meet over 40%  of the additional electricity demand from data centres until 2030. After 2030 SMRs enter the mix, providing a source of baseload low-emissions electricity to data centre operators. Currently, hyperscalers are among the key corporate backers of SMR development. Coupled with the ongoing growth of renewable electricity generation, the resulting increase in nuclear electricity generation leads to an absolute decline in coal-fired generation for data centre operations by 2035.

Consequently, CO2 emissions from electricity generation for data centres peak at around 320 Mt CO2 by 2030, before entering a shallow decline to around 300 Mt CO2 by 2035. Despite rapid growth, data centres remain a relatively small part of the overall power system, rising from about 1% of global electricity generation today to 3% in 2030, accounting for less than 1% of total global CO2 emissions.

Onshore wind power, a success story

Onshore wind energy has been an important pillar of the energy transition for many years. It is worth expanding capacity wherever sufficient wind power is available. Wind turbines are generally located in higher positions inland than on the coast, allowing optimum wind harvesting. At the beginning of the 1990s, wind energy experienced its first upswing, supported by state subsidies. However, a lack of public acceptance and insufficient planning and supply security made it difficult for the industry. Onshore wind power, like most forms of energy production, has a direct impact on local communities and people's lives. Whether on land or at sea, the construction of a wind turbine always encroaches on a natural habitat. This makes it all the more important to take an environmentally friendly approach to building wind farms. Therefore, it is very important to listen to those who know the local environment best, and involve the municipality, landowners, neighbours and other stakeholders transparently and systematically. In 2021, 6.1% of the world's power production came from wind power (IEA).

In the power market, prices are set based on supply and demand. Changes in price happen when the supply of power changes. Wind turbines produce electricity almost all the time, and on particularly windy days wind power helps to lower the price of electricity. When there is a lot of wind in autumn and winter in particular, this coincides with a greater need for electricity (for example, people needing to heat their homes in cold periods). Therefore, wind power works particularly well with hydropower, as hydropower can then be saved for periods when there might be less wind.  In addition, wind power and solar power often complement each other. When it's not windy, the sun is often shining. In this way, wind power provides an important balance in the power system that contributes to more even electricity prices over time, and also contributes to increased energy security 

Battery Energy Storage Systems

Storing variable power has never been easier or cheaper. Everything from batteries and heated ceramic blocks to giant hydro power reservoirs and compressed air are now being used to hold energy until it is needed. Combined with smart systems that can reduce energy demand in peak periods and draw from these storage solutions almost instantaneously, these storage methods are revolutionizing how we keep the lights on in our homes and factories humming, and are a key way for moving to a 100% renewable electricity system.

Battery storage technologies are essential to speeding up the replacement of fossil fuels with renewable energy. Battery storage systems will play an increasingly pivotal role between green energy supplies and responding to electricity demands. Battery storage, or battery energy storage systems (BESS), are devices that enable energy from renewables, like solar and wind, to be stored and then released when the power is needed most. Lithium-ion batteries, which are used in mobile phones and electric cars, are currently the dominant storage technology for large scale plants to help electricity grids ensure a reliable supply of renewable energy. We’ve begun deploying this technology with heavier equipment, working with Viridi Parente, a company that makes battery storage systems for industrial, commercial and residential buildings.

Why is battery storage important and what are its benefits?

Battery storage technology has a key part to play in ensuring homes and businesses can be powered by green energy, even when the sun isn’t shining or the wind has stopped blowing. For example, the UK has the largest installed capacity of offshore wind in the world, but the ability to capture this energy and purposefully deploy it can increase the value of this clean energy; by increasing production and potentially reducing costs. Every day engineers at electricity grids worldwide must match supply with demand. Managing these peaks and troughs becomes more challenging when the target is to achieve net zero carbon production. Fossil-fuel fired plants have traditionally been used to manage these peaks and troughs, but battery storage facilities can replace a portion of these so-called peaking power generators over time.

How exactly does a battery storage system work?

Battery energy storage systems are considerably more advanced than the batteries you keep in your kitchen drawer or insert in your children’s toys. A battery storage system can be charged by electricity generated from renewable energy, like wind and solar power. Intelligent battery software uses algorithms to coordinate energy production and computerized control systems are used to decide when to store energy or to release it to the grid. Energy is released from the battery storage system during times of peak demand, keeping costs down and electricity flowing. While this article focuses on large-scale battery storage systems, domestic energy storage systems work on the same principles. 

What renewable energy storage systems are being developed?

Storage of renewable energy requires low-cost technologies that have long lives, charging and discharging thousands of times, are safe and can store enough energy cost effectively to match demand. Lithium-ion batteries were developed by a British scientist in the 1970s and were first used commercially by Sony in 1991, for the company’s handheld video recorder. While they’re currently the most economically viable energy storage solution, there are a number of other technologies for battery storage currently being developed. These include: Compressed air energy storage: With these systems, generally located in large chambers, surplus power is used to compress air and then store it. When energy is needed, the compressed air is released and passes through an air turbine to generate electricity; Mechanical gravity energy storage: One example of this type of system is when energy is used to lift concrete blocks up a tower. When the energy is needed, the concrete blocks are lowered back down, generating electricity using the pull of gravity; Flow batteries: In these batteries, which are essentially rechargeable fuel cells, chemical energy is provided by two chemical components dissolved in liquids contained within the system and separated by a membrane. The next decade will be big for energy storage in general and for batteries in particular. It will be an important proving time for batteries and for other technologies.