Global electricity demand is expected to double by 2050 as reliance on fossil fuels decreases, according to DNV's New Power Systems report.
This transition requires significant grid expansion, solutions for grid congestion, and new business models for rising electricity demand and generation from wind and solar. The report suggests that grid expansion is affordable due to efficiencies in grid technology and increased electricity load, with stable or declining global grid charges for consumers in the long term.
The increase in renewable power necessitates system flexibility and demand-response mechanisms. Advanced technologies such as AI and automated demand response will assist in managing grid operations and market predictions. Energy storage, particularly lithium-ion battery technology, will play a crucial role in addressing renewable energy's intermittent nature.
Global grid capacity must grow 2.5 times its current size, with annual expenditure on grids more than doubling to USD 970 billion by 2050. Despite rising global grid expenditures, consumer grid charges are expected to remain stable or decline due to efficiencies in grid technology and increased electricity distribution.
While predicting future electricity costs is challenging, the decline in renewable power costs suggests stable or falling consumer prices. Electrifying transport and heating sectors will lead to lower overall household energy bills in high- and middle-income regions, while rapid GDP growth in low-income regions will offset slight increases in household energy expenses, offering a "green dividend" that accelerates the energy transition.
