As we switch to cleaner energy, there are three energy transition challenges we must not overlook

Electricity is essential to prosperous modern societies but, according to a new report from the International Energy Agency (IEA), faces a range of energy transition challenges.

Today, it accounts for around one-fifth of total energy consumption. However, demand is likely to increase by about 50% and may outstrip the demand for oil by 2040, the IEA believes.

The report, called Power Systems in Transition, highlights some of the changing trends in energy generation and consumption and calls out some of the key challenges to be overcome.

Three energy transition challenges of particular importance, according to the IEA, are:

The themes discussed in the report are part of a wider dialogue on reducing global emissions through the adoption of cleaner energy. They also form part of the World Economic Forum’s Race to Zero, a global campaign to bring public and private sector decision-makers together to gain a deeper understanding of the energy transition.

Cyberattacks are one of the greatest and most likely forms of energy transition challenges the globe faces, according to the World Economic Forum’s Global Risk Report 2020. For the electricity sector, falling prey to a sustained cyberattack could have devastating consequences for electricity users. As well as homes and individuals, there is also a risk of disruption to a range of critical infrastructure and emergency services.

An attack on the electricity network in Ukraine in 2015 left 225,000 customers without power and is thought to have been the first such attack on a nation’s utilities.

The IEA warns that there is a lack of comprehensive data on the number of cyberattacks on electricity networks, and says inconsistencies in the reporting of attacks make it difficult to assess the scale of the problem. The number of potential targets for hackers is growing all the time with the advent of digital transformation. From smart meters and connected thermostats to distributed energy storage, electricity is becoming an internet-enabled sector.

Average global temperatures are rising. Rainfall is unpredictable. Flooding and drought are becoming more common. The effects of climate change have been well documented. But what’s less widely known is the way changing climate patterns can cause problems for electricity systems, the IEA says.

“In many countries, the increasing frequency or intensity of extreme weather events such as heatwaves, wildfires, cyclones and floods are the dominant cause of large-scale outages,” the report says. It also describes how service disruption caused by wildfires and heatwaves in Australia and on the West Coast of the US demonstrates what can happen when climate-related problems occur.

There are a number of important structural changes taking place across electricity generation and supply, with the traditional centralized model gradually being replaced by a mix of centralized and distributed power. This is due, in large part, to the growth of renewables but also poses another energy transition challenge.

Wind, wave, and solar electricity generation don’t conform to that old centralized model. Not only do they take place in a variety of locations but the amounts of energy they produce can vary too. The IEA estimates that by 2040, “the average annual share of variable renewables in total generation would reach 45%.”

Integrating variable sources into the power grid is possible, but it requires investment in equipment, facilities and technology. And policy-makers may need to amend regulations and guidance to ensure new, flexible power storage and distribution technology can be developed and integrated at speed without these energy transition challenges.

“Maintaining reliability in the face of greater supply and demand variability will require greater and more timely investments in networks and flexible resources,” the Power Systems in Transition report says. But it also notes that investment in electricity grids has been declining by 16.3% since 2015.