5 Key Renewable Energy Trends For 2023 & Beyond
22 Mar 2023
The renewable energy sector is expected to grow exponentially in the next five years, quadrupling the global renewable power output. Estimates claim that by 2030, 65% of the world’s energy supply could be renewable.
In the article below, we delve into the 5 key renewable energy trends for 2023 and beyond factoring in security, technological advancements across the different facets that make up the renewable energy sector, the role of AI & big data, and advancements in critical infrastructure components such as battery storage.
Table of contents
- Cyber Security
- Battery energy storage solutions
- AI & Big Data
- Geo Politics
- Investment in Cleantech
- Signing off
First on our renewable energy trends list for 2023, the move towards a greener future powered by renewable energy doesn’t only present challenges from a production standpoint, there exists as many challenges to ensure that infrastructure is safeguarded against malicious attacks.
One such avenue of assault resides in the cyber domain, with cyber security defences of renewable energy organisations becoming increasingly more important with each passing year.
The growing presence of renewable energy, along with its intricate supply networks and far-reaching infrastructure, makes it particularly susceptible to disruptions from cyber attacks. The growing use of digital solutions coupled with the wide distribution of assets of renewable energy organisations only increases the potential for cyber-related incidents to occur.
Global Insurance & Risk firm Marsh, report that 65% of organisations in the energy sector are struggling to keep pace with the ever-evolving threat of cyber risks.
Cyber attacks can have far-reaching consequences for organisations and governments alike. At the organisational level, loss of sensitive information, earnings loss, regulatory fines, failure to fulfil contractual obligations, and subsequent penalties must be considered.
At a national or regional level - factoring in the critical role of renewable energy systems integrated with national infrastructure - energy security, national stability, and far-reaching physical damage to energy infrastructure is all possible.
In March 2019, Utah-based renewable energy provider SPower fell victim to a cyber security attack that disconnected the US power grid operator from its power stations, causing a temporary lapse in communications with a number of their installations, specifically solar and wind. Unlike the following example, this uncoordinated cyber attack did little more than raise awareness as to the potential threats posed.
Another example of a cyber attack that demonstrates the potential threat to national security occurred in Ukraine on the 23rd of December 2015. A coordinated assault by Russia-linked hackers, using a variant of a highly destructive malware known as BlackEnergy, compromised the systems of three regional power authorities across the Ivano-Frankivsk region, thrusting hundreds of thousands of people into darkness. Power was eventually restored, shining a spotlight on the potential threats associated with cyber attacks.
As the information above highlights, cyber attacks pose a very real and serious threat to the renewable energy sector. As these green sources of energy become further integrated into energy grids, renewable energy organisations will need to make sure that they are constantly stress-testing and developing their cyber defences. A red hot renewable energy trend for 2023 and beyond.
Battery Energy Storage Solutions
As the cost of producing renewable energy continues to drop, the next challenge faced is the development of better battery energy storage solutions to solve the problem of intermittency when it comes to renewable energy generation.
Whereas renewable energy systems are still able to make energy contributions without the use of battery energy storage solutions, this is only possible in a limited capacity. The more energy that producers can store, the greater the level of surplus energy that exists to be released onto the grid when needed. Something that is being considered by developers in greater detail during the solar project development process.
Currently, Lithium-ion battery solutions are the most economical option, though other battery storage technologies are in development. Examples of technological developments include:
- Compressed air storage: Surplus power is stored by compressing air in large chambers, which then generates electricity through an air turbine when needed
- Mechanical energy gravity storage: Lifting objects with energy, then using gravity to generate electricity by lowering them
- Flow batteries: Energy through chemical reactions between two dissolved components in separate liquids
As battery storage system technology continues to advance and costs decrease, they will play an increasingly important role in transitioning away from fossil fuels. Wind and solar are more reliable than ever, and will soon be as competitive as traditional energy sources.
Improved storage solutions will yield cheaper and more efficient energy distribution, further expediting the ability of providers to integrate renewable energy sources into the grid.
AI & Big Data
The use of AI & Big data solutions continues to spur technological advancements in different industries. The same can be said for the renewable energy sector, with the introduction of applications that continue to push process improvements, management optimisations, and cost reductions across all areas.
Some of the ways AI & Big Data are positively impacting the renewable energy industry include:
- Predictive Maintenance: enabling energy providers to continually monitor the health of their production assets. Operators are now able to predict and prevent maintenance issues through continued upkeep which in turn ensures improved reliability and a reduction in downtime experienced
- Energy Management: energy management systems powered by AI solutions can monitor and forecast energy demand, improving the supply of renewable energy into the grid
- Optimisation of renewable energy systems: provides operators with the ability to optimise renewable energy systems so that they provide consistent levels of energy generation output. An example of this could be the automated orientation of solar panels to maximise energy generation throughout the day
- Weather forecasting: by analysing large sets of historic weather data combined with other relevant sources, Big Data & AI can forecast future weather conditions. This in turn means that operators can make informed decisions in relation to energy generation strategies along with improved storage and grid management
- Intelligent Energy Storage: this one links to the above in that the more data that can be provided for key decision makers, the more informed their decisions will be. Here’s a scenario that captures the essence of this point: a renewable energy operator is aware of an impending cold snap a week ahead of it actually hitting. This provides ample time to begin storing up energy knowing full well that energy demand will surge
The introduction and use of AI & Big Data will continue to promote efficiency gains across the renewable energy process whilst also helping to optimise core areas and reduce costs. With all that is going on in the world of AI in 2023, you can expect to hear more about this moving forward.
Over the last 3 years, the world has experienced several geopolitical shocks. A global pandemic and the war in Ukraine have led to volatile global energy markets. This has provided a period of reflection for governments around the world, seeking solutions for big questions pertaining to energy security, the risks associated with over-dependence on energy export nations, and looking for alternative energy systems to meet regional energy demand.
Disruptions to global supply chains over the last 3 years have led to severe disruptions across industries, with the renewable energy market no different. The manufacturing of core components that enable the building of renewable energy projects is a particular pinch point and has resulted in the delay and postponement of existing and planned renewable energy infrastructure projects. This is expected to continue throughout 2023 and beyond.
Rising energy prices continue to weigh heavily on the populations of the world, specifically those of poorer nations. Coupled with rising interest rates and a general ‘cost of living crisis’ and many governments around the world are staring down a perfect storm scenario.
In the context of driving a global uptake of cleaner ways of generating energy, rising costs risk marginalising poorer nations, pushing them towards less environmentally friendly forms of energy production as governments look to quell discontent amongst their respective populations.
It’s not all doom and gloom though. In decades to come, we may look back on this period as a departure from the global dependency on fossil fuels for our energy needs, with recent times serving as a catalyst towards cleaner forms of energy generation.
A fantastic example of this is the renewable energy output of Europe throughout 2022, whereby in a bid to quell increased energy costs, 19 EU member states hit wind & solar generation records, avoiding an 11 billion euro bill in additional gas costs.
As nations clammer to quell energy demands due to geopolitical events, 2023 could prove to be a pivotal year for the future of renewable energy.
Investment in Cleantech
This section encapsulates key renewable energy trends identified above and in general, cleantech investment is on the rise with no signs of slowing down.
According to GlobalData figures, circa $5.1 billion in cleantech deals were reached in 2021. This is expected to grow throughout 2023, with increasing pressure being placed on governments and industry leaders to reduce greenhouse gas emissions and address climate change through innovative technological solutions.
Advancements in infrastructure technology, financial incentives aimed at enticing private sector players, and increasingly frequent geopolitical flare-ups, are expediting the transition to renewable energy.
Source: Global Infrastructure hub
Investment in non-renewable energy infrastructure has always attracted significant interest from the private sector for a variety of reasons. Since 2010, there has been a significant decrease in investment in non-renewable infrastructure projects, falling from 24% of total infrastructure investment down to 10%. Investment in renewable energy infrastructure tells a different story.
Private Investment in renewable energy infrastructure projects doubled to 47% during the same period, making it the largest sub-sector of investment in infrastructure. The expectation is that we continue to see this upward trend through 2023, on to 2030, and beyond as nations charge towards their respective regional net-zero targets.
A significant issue in renewable energy investment traditionally has been accessibility to renewable energy projects for private investors, as well as access to funding for renewable energy project owners. As part of the cleantech revolution, platforms such as PF Nexus provide a universal gateway, making the introduction of private investment with renewable energy projects that much more accessible.
Scott Gillam, CEO of PF Nexus has described the platform as “revolutionising the renewable energy investment sector by providing global visibility and connectivity. The platform offers a centralised hub for financial and business development teams to discover, research, shortlist, collaborate and discuss investment opportunities in the renewable energy sector.”
Cleantech investment will continue to increase throughout 2023 and beyond. Spurred on through private sector infrastructure investment, technological advancements, and the continued breakdown of barriers to entry facilitated by platforms like PF Nexus.
To find out more about financing for solar projects, wind projects, or various financial mechanisms like Power Purchase Agreements that open up investment opportunities, take a look at our dedicated blog section for more.
As the renewable energy trends listed above highlight, 2023 promises to be an eventful year as the world continues its transition away from fossil fuel dependency.
Geo-political events are forcing the hands of governments the world over into shoring up energy security for their respective countries. As the renewable energy sector continues to grow and demand continues to increase, so does the need to improve physical & security-based infrastructure, whilst realising increased efficiencies at all stages of the energy generation process through the introduction of AI & Big Data solutions.
Governments do not have the resources to facilitate this transition alone and will depend on investment from the private sector. As has been demonstrated above, the private sector's involvement in the renewable energy sector continues to grow year on year, with investment opportunities becoming increasingly more accessible through the likes of innovative cleantech platforms such as PF Nexus.
As tough as it may appear at the moment, the hope is that we’ll look back on 2023 in decades to come as a true catalyst year in the transition towards cleaner ways of energy generation.