The U.S. Energy Information Administration forecasts that global energy consumption will increase by nearly 50 percent in 2050 as renewables grow, and electricity demand will increase by 75-100 percent over the same period, driven by the shift to electric vehicles in motor vehicles and industrial electrification. Renewable energy sources are expected to meet most of the demand growth. Since most renewable energy sources, such as solar and wind, will be generated far from population centers, this means expanding capacity and improving the resilience of transmission systems. However, while expanding and flexibly deploying distribution systems, there is also a focus on cybersecurity.

The key driver of change is digital technology, which is crucial to achieving electrification. The shift from fossil fuel systems to power systems will drive changes in existing and future power infrastructure, including new microgrids and self-generating power at industrial sites. Digital solutions for power management manage complex power demands, facilitate cybersecurity, integrate advanced analytics and artificial intelligence to automatically ensure reliability, and flexibly implement distributed, loosely coupled microgrids.

Mitigate growing energy demand and reduce emissions

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According to McKinsey, the top three sources of greenhouse gas (carbon dioxide and methane) emissions in 2019 were power generation (30%), industry (20%) and transport (19%), mainly from the burning of fossil fuels. In January 2022, a report titled The Net Zero Emissions Transition: Costs and Benefits focused on opportunities for power producers and industry to prioritise investment in renewable, low-carbon energy sources and the electrification of industrial processes. As a result, electrification reforms in heavy industry to meet the decarbonisation target could generate 50 per cent more electricity growth than in transport.

To mitigate the growing global demand for energy, improving energy efficiency is imperative. Digital technologies will boost energy efficiency by 10-20%. To support the net zero goal, capital-intensive industries are working to electrify energy production and process heat, while ensuring power generation is in line with sustainability initiatives developed within the industry.

At the same time, in the most challenging economic zones and industrial sectors, carbon trading and carbon tax reduction policies enable companies to access appropriate funding for decarbonisation investments. Investments in renewable energy and smart grids go hand in hand with carbon trading. With digital solutions that support distributed power sources and the grid, we can successfully track carbon emissions from renewable resources to industrial end-uses, and then, with complementary mass-balance solutions, we can calculate and track the carbon intensity of finished products produced from renewable energy.

In 2050, fossil fuels will remain an important source of global energy. Carbon capture, utilization and storage (CCUS) will also play an increasingly important role. In addition to this, electrification is also a key factor driving the reduction of carbon emissions. Electrification will play an increasingly important role as new investments are almost entirely directed towards low-carbon power sources and traditional CO2-emitting facilities and processes in energy-intensive plants need to be retrofitted and replaced, including refining units, commodity chemicals and metals such as aluminium. This shift in investment will spawn a new generation of digital solutions to meet the growing demand for electrification.