Global electricity demand is set to double by 2050 as the world’s reliance on fossil fuels diminishes, according to a new report from DNV.
The New Power Systems report finds that the pathway to a decarbonised energy system requires significant grid expansion, solutions for grid congestion, and new business models to accommodate rising electricity demand and generation from wind and solar.
The report also concludes that grid expansion is affordable, thanks to growing efficiencies in grid technology and the increased electricity load, with DNV expecting global grid charges passed to consumers to remain stable or decline in the long term.
Global economic growth and the electrification of transportation, heating, and industry are primary drivers of the anticipated surge in global electricity demand.
Additionally, the development of data centres, notably for AI applications, is also expected to contribute to this increase.
At the same time, AI holds considerable potential to introduce efficiencies in both the provision and use of power.
By mid-century, electricity will constitute 37% of global final energy use, a substantial rise from 20% in 2023.
This upswing is accompanied by a dramatic shift towards renewable energy, with wind and solar anticipated to generate half of the world’s electricity by 2040 and 70% by 2050.
The decarbonisation trajectory predicts that nearly 90% of electricity will be sourced from non-fossil sources by 2050.
The growing share of renewable power requires flexibility and a robust system of demand-response: as variable renewable energy sources (VRES) expand ninefold, the need for short-term flexibility will double.
Fluctuating demand from sectors like heat and transport calls for new ancillary services such as synthetic inertia products and fast frequency response and adapting market and regulatory frameworks to support these technologies is critical for a sustainable energy future.
In this new model, advanced technologies such as AI and automated activation of demand response will assist grid operations and market predictions.
Remi Eriksen (pictured), group president and chief executive at DNV, explained: “Deep digitalization, including the application of AI, is crucial for managing the increased complexity of a renewable-dominated power system.
“So there will be a rapid growth in both information technology and operational technology in the coming years which must be supported by a robust approach to risk management, particularly on cyber security, to reap the benefits of the new power systems.”