Renewable energy’s next frontier: collaboration, innovation, action

Often in climate efforts, it seems there is little to celebrate. The global energy transition bucks this trend. Within the span of one lifetime, we have seen solar power move from a groundbreaking innovation to household technology, swaths of land become dotted with wind farms, the construction of a hydroelectric dam so large that it slows the earth’s rotation and the first plane powered by biofuel crossing the Atlantic.

Yet experts know that there is still a long road to travel before we are fueling the world with renewable energy. ADSW gathered the industry leaders who are working day to day to turn this vision into reality to explore wins, challenges and priorities for the global energy transition. This ADSW Advisory Commitee on Energy Transition provides a snapshot of the current state of the transition and a roadmap for overcoming obstacles to achieve a more sustainable future.
 
The current landscape of the energy transition
 
A combination of declining costs, supportive policy and technological progress have cleared the way for renewable energy to take hold worldwide. But even paved roads have bumps. The most immediate challenge facing energy providers today is a practical one: grid capacity. 

Ramping up renewable energy is a moot exercise if it can’t be moved to consumers. Current grids struggle to integrate the increasing influx of renewable energy, in both emerging and developed economies. To upgrade grids, we need financing, enhanced forward planning and collaboration between governments and private sector developers. Investments in transmission infrastructure are critical, as grid bottlenecks risk undermining the viability of renewable projects. As the committee emphasized, “there is no transition without transmission.”

Another issue is intermittency. On sunny days or during blustery winds, renewable energy like solar and wind can supply the grid with ease. However, when the weather goes, so does the power. To keep a steady supply of power to our homes, hospitals, schools and streets, we need to find a way to ensure stability of supply. 

Advancements in energy storage, particularly batteries, offer promising solutions. Battery costs have plummeted, falling 35% in the past year alone, and are expected to continue dropping. Hybrid systems combining different energy generation and storage methods are becoming increasingly popular, not only for their ability to stabilize grids but also for their profitability through energy arbitrage. With renewable energy sources developing steadily, the next hill to climb will be scaling these storage and hybrid solutions. 
 
On the horizon: hydrogen and artificial intelligence
  
No discussion about energy would be complete without touching on two of the most exciting and emerging developments: green hydrogen and artificial intelligence.

Green hydrogen holds uniquely transformative potential for decarbonizing heavy industries and transportation. However, it's been stymied by high production costs, a limited market and the relative immaturity of the technology. Unlike other renewables, green hydrogen is unlikely to see rapid cost reductions through technological innovation alone. Instead, collaboration between researchers, producers and the private and public sectors will be also crucial to scale production. Improving the technology is unlikely to drive costs down enough to be viable; so reative thinking around supportive regulatory frameworks and financial incentives to encourage investment and to create demand is crucial.

Artificial intelligence is also poised to revolutionize energy systems by optimizing consumption, improving forecasting accuracy, and enhancing the efficiency of production and distribution. However, its development also poses challenges, notably the technology’s heavy environmental footprint. In a vicious circle, the more we use AI to help us decarbonize, the more damage we may do to the environment. There is growing recognition of this dangerous paradox, and tech and energy companies would be well advised to work in tandem to harness AI’s potential while mitigating its environmental impact.
 
The price needs to be right
 
Beyond technology and infrastructure, there’s one final lynchpin on which the global energy transition hangs: the end consumers.

Effective pricing mechanisms are essential to drive energy efficiency and incentivize everyday consumers to monitor energy usage and switch to renewable energy. Organizations have found success with rethinking pricing and payment, such as blockchain-based smart grids, where dynamic pricing encourages optimal energy use. Broader adoption of models like these, paired with time-tested tools like education and gamification, could align consumer behavior with sustainability goals.
 
The global energy transition presents unprecedented opportunities to create a cleaner, more sustainable future. Challenges remain, but the solutions are at hand. By prioritizing collaboration, innovation, and thoughtful policy design, the world can unlock the full potential of renewable energy and achieve its climate goals. 

Discover more key intelligence in the ADSW Advisory Committee Insights Report: Exploring the Global Energy Transition.