Uncovering Opportunities: Changing how we think about Energy
If someone asked you to name the top challenge presented by urbanization and our escalating world population, what would you say? One answer could be: the ever-increasing need for energy – which is one of the most basic dilemmas of modern life. But with the right approach, we can turn this challenge into an opportunity.
Urbanization: In search of a better life
Global population reached 2.5 billion by the 1950s. Today, we’ve hit 7 billion and expect an increase to 10 billion in the second part of this century. What’s more, drawn by the chance for a better, more modern way of living, people continue to move to cities, in both mature and developing economies. In fact, the rate of urbanization has increased from 29% in 1950 up to 49% today, and predictions show it will reach 67% by 2050. This represents a potential of 2.5 billion additional urban dwellers by 2050, a migration never experienced in the history of mankind.
And every one of those families will need power in their homes and workplaces.
The transitional challenge
While the global phenomenon of urbanization opens opportunities for billions of people to achieve a higher standard of living, the movement itself impacts society and the global economy, as seen in these areas:
- A resources challenge, with a considerable increase of pressure on supply chains for raw materials, water demand, and, most importantly, fossil fuels to generate energy (+55% projected increase of materials demand by 2030).
- A climate challenge, with a spectacular increase of CO2 emissions (doubled in the last 40 years, with a forecast of +30% in the coming 20 years).
- A financing challenge, with an expected 75% increase in infrastructure investment needs in the coming decades and projected gaps that could top two-thirds of the needs in new economies.
How we manage energy (its generation, distribution, and consumption) will be a leading factor in finding solutions for these challenges. The world needs an integrated energy, efficiency and sustainability strategy. Fortunately, innovative technologies have emerged to offer an alternative solution to these challenges.
Powering the digital economy
Renewable power is today on the verge of reaching a tipping point, where it becomes the most competitive source of energy across the entire system. A new world of energy is emerging that is clean, competitive and electrified.
Australia, for instance, is taking a giant step toward reliance upon renewable energies with a $13.8 million solar and battery microgrid project, the first of its kind in Australia. The microgrid will harness the full potential of renewable energy by dealing with the intermittent naure of solar. Working together, renewable energy engineering company Planet Ark Power and Schneider Electric will deliver a secure, sustainable and affordable energy supply to South Australia.
At the same time, digital technologies and IoT are pervading every aspect of our daily lives and business operations, bringing new levels of productivity, flexibility and energy efficiency.
For example, cement manufacturer China National Building Materials Group Corporation has leveraged digital solutions to improve performance while reducing its carbon footprint, a considerable undertaking for one of the most energy-intensive industries. But digitization paid off: CNBM has cut its energy use, improving its overall energy efficiency by 10% while significantly raising its productivity.
The transition to a clean and electrified energy system is accelerated by the digital technologies that make it possible. The transition to a new digital economy is, as well, accelerated by the emergence of a more competitive and sustainable energy system. Together, these elements are reshaping the global economy and opening new opportunities for better living.
The pathway to a sustainable future
An integrated energy, efficiency and sustainability strategy is thus within reach. The emergence of a clean, electrified, ultra-efficient and digital energy system is achievable with today’s technologies. More, its growing competitiveness and proven benefits make this transition almost inevitable. This new paradigm can bring massive benefits to the challenges posed by the rapid urbanization of billions of people.
The key question will thus not be if it is possible, but at what speed we can make it happen:
- How fast can the current system move to a more electric world?
- How fast can we tap the significant potential of efficiency driven by digital technologies?
- What changes need to occur to accelerate these transitions?
Countries and businesses around the world have already embarked on that journey, each with specific constraints and contexts. But despite the challenges to overcome, we can view the future with optimism in light of the great achievements being realized every day.