Electricity will be the backbone of the entire energy system

Claudio Facchin, CEO, Hitachi Energy

By Claudio Facchin, Chief Executive Officer, Hitachi Energy

As we advance towards a sustainable energy future for all, it's clear that we need electricity grids that help us get there faster, not slow us down. The International Energy Agency (IEA) emphasises this in its 130-page report, highlighting the critical need for grid investment.

Currently, grid investments are insufficient. To achieve national climate goals, investments must nearly double by 2030, reaching over $600 billion annually. This increase is vital for digitalising and upgrading power grids. Neglecting these investments risks increasing global CO2 emissions, thereby hindering energy transitions, and making the 1.5°C climate goal unattainable. The IEA predicts that without proper grid investment, cumulative CO2 emissions from the power sector could be 58 gigatonnes higher by 2050 compared to a scenario aligned with climate targets. This could also increase the likelihood of a global temperature rise exceeding 2°C by 40 per cent.

The emerging global energy system is more diverse and complex than ever. By 2030, renewables like wind and solar are expected to generate half of our electricity (up from 28 per cent today), potentially reaching 80 per cent by 2050. However, renewable energy output is variable, influenced by factors like wind speed and sunlight. Additionally, electricity demand is set to surge with the increase of electric vehicles (EVs), widespread installation of heat pumps, and growing use of air conditioners due to rising global temperatures. By 2050, electricity could account for half of all energy used globally, a significant increase from the current 20 per cent.

If we fail to upgrade the grid to meet this growing demand and the need for real-time flexibility to manage renewable energy variability, we'll face significant challenges. Historically, utilities have managed demand spikes by activating fossil fuel plants, but this is no longer a sustainable solution.

By 2030, our power grids will need to be twice as flexible as they are today. By 2050, we'll require four times the installed generation capacity and transfer three times the electrical energy. The future grid will need: 1) increased transmission capacity and interconnections, combined with energy storage for improved flexibility; 2) advanced digitalisation technology focused on sustainability and power electronics; and 3) a global, system-wide approach to energy transition, promoting innovative industry and sector collaboration.

Traditionally, electricity grids have been national or regional, but the future demands more interconnectivity. This is evident in the increasing need for links to transport power over longer distances, from areas of surplus to areas of demand.

In 2023, significant interconnector projects were announced, including Dogger Bank Wind Farm, the world’s largest offshore wind farm, supplying power to the UK mainland via Hitachi Energy’s HVDC technology. Such projects are crucial for future electricity supply reliability. In addition, this technology also allows for new applications where it helps to decarbonise other sectors, such as oil and gas. Project Lightning is a first-of-its-kind subsea power transmission project where HVDC links will connect low-carbon power from the mainland grid to Adnoc production operations as a strategic project to enable a sustainable, flexible and secure power supply.

Given the vast scale and complexity of energy systems and the urgency of climate change, collaboration across companies, academia, and governments is essential. This is especially true in “hard-to-electrify” sectors where transitioning to clean energy is challenging, like aviation, cement manufacturing, and steelmaking. Collaborative efforts combining diverse expertise and technologies are key to overcoming these challenges.

Transitioning from a fossil fuel-dominated energy system to one primarily powered by clean electricity is a monumental task. As the pace of this historic energy transition accelerates, ensuring that our electricity grids are flexible and resilient is crucial to enable a sustainable energy future – for today’s generations and those to come.