Innovation, Policy Revisions and Decentralisation are Accelerating the Energy Transition

The two agencies mapped the major drivers to determine when three tipping points would forever change the way utilities do business and set the industry on a countdown to reinvention. The latest analysis, covering Europe, the US, Oceania, the Gulf Cooperation Council (GCC) countries, China, India and Latin America, indicates that these drivers are accelerating faster than even the most ambitious estimates, bringing forward the tipping points for energy transition by as much as two years.

Benoit Laclau, EY Global Energy Leader, said, “A revolution in the power sector is driving rapid change in renewable energy supported by digital technologies, the falling cost of battery storage, and empowered consumers. These are quickly ushering in a new energy system, transforming our world into one where cleanly generated electricity will power almost every aspect of our lives”

The research identifies four key forces creating a combination of factors that compress the timeline to a new energy world.

Force 1: Better, cheaper technology

As a result of the accelerating shift toward utility-scale renewables, complemented by declines in the cost of decentralized generation-plus-storage solutions, 2018 is the seventh year in a row where new renewable energy capacity outstripped new conventional energy installations. Energy and digital technologies that accelerate renewable deployments, such as battery storage, electric vehicles, artificial intelligence and machine learning, have moved quickly from being emerging trends to integral parts of the energy system. The research indicates that battery innovation — in particular, the adoption of utility-scale storage — marks a major turning point that will drive momentum in other regions.