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The Growing Importance of Electrification and Renewables

The Growing Importance of Electrification and Renewables

An image of wind turbines

The way the world runs is changing. Energy crises and growing interest in decarbonization are shifting the globe’s views on where energy comes from. The current economic climate and ongoing war in Ukraine are contributing to rising energy prices, which, unfortunately, has a rippling effect across multiple sectors of industry from gas to groceries.  

Concerns over climate change have contributed to the growing interest in renewable energy and electrification. Decarbonization efforts have kicked off some of the initial progress in transitioning to renewable energy alternatives and away from gas, coal, and nuclear fuels. Electrification, or replacing technologies or processes that use fossil fuels with electrically powered equivalents, is step one of that process. Electrification is more efficient than its fossil fuel counterparts, reducing energy demand and carbon emissions.  

According to the International Energy Agency (IEA), renewable power capacity is expected to increase by a third globally by 2050. Higher fossil fuel prices and energy security concerns are driving the increased adoption rate in comparison to earlier years. Continued strong deployment of solar photovoltaic (PV) technology and wind power will take the lead in new renewable energy technology applications, with solar PV capacity accounting for two-thirds of new global renewable capacity.  

During 2022, the world saw massive progress in decarbonization efforts as countries passed new policies to increase electrification and renewable electricity capacity. In the European Union, there was REPowerEU, a clean energy initiative that was created to end the reliance on Russian fossil fuels due to the 2022 invasion of Ukraine. In the United States, the Inflation Reduction Act (IRA) a large policy plan that included investments toward domestic energy production with a focus on clean energy. In China, the 14th Five-Year Plan for Renewable Energy is a plan that aims for a 50% increase in renewable energy generation with 50% of China’s incremental electricity and energy consumption coming from renewables over 2021–2025. These policies will help support the acceleration of renewable electricity deployment over the coming years.  

According to the IEA, renewable capacity will meet 35% of global power generation by 2025. This should prevent a significant rise in CO2 emissions as global energy demand rises 3% annually. By 2050, the world’s energy demand will be triple what it was in 2022.

With further interest in the construction and maintenance of smart cities, electric vehicle (EV) dominance, and faster data transmission, energy demands will only continue to increase. The development and deployment of renewables to power further electrification projects to sustain growing demand will be key to this transition.  

A Look into Renewables

Renewables, or renewable energy, is energy derived from natural sources that are replenished at a higher rate than they are consumed. Sunlight and wind power are prime examples of renewable energy sources due to their high replenishment rates. As the world transitions to more sustainable energy systems, other renewables like hydropower and biofuels will take more prominent roles alongside leaders, solar and wind.  

The industry sectors currently leading the charge in renewable energy transitions are power, heat, and transportation. This can be seen with the rise of EVs in automaker line-ups and the implementation of solar PVs to power buildings. As of now, these efforts are helping keep the average global temperature increase below 34.7°F, or 1.5°C --a large concern caused by high levels of CO2. Eventually, should efforts to increase renewable energy capacity follow the goals set forth by the Net Zero Emissions by 2050 scenario, renewables will allow electricity generation to be “almost completely decarbonized.”  

Since the transportation, heat, and power sectors are the largest contributors to rising global carbon levels, it is fitting that they are currently leading the charge in significantly decarbonizing electricity generation via renewables.  

Unfortunately, while renewables deliver the most electricity, electricity generally only accounts for a fifth of global energy consumption. Finding a more significant role for renewable energy sources remains a critical challenge for decarbonization plans.  

Still, these efforts are worthwhile. In 2022, as new initiatives passed worldwide to commit greater support toward renewable energy, electricity generated via renewables surpassed coal within the United States. Similarly, power generated through renewables outperformed nuclear generation for the second year in a row.

Gregory Wetstone, President and CEO of the American Council on Renewable Energy, discussed the transition with AP News.  

“This booming growth is driven largely by economics,” he said. “Over the past decade, the levelized cost of wind energy declined by 70%, while the levelized cost of solar power has declined by an even more impressive 90%...Renewable energy is now the most affordable source of new electricity in much of the country.”

The Energy Information Administration has projected that wind and solar power will be the largest renewable electricity source within the U.S. in the coming years. Stephen Porder, Professor of Ecology and Assistant Provost for Sustainability at Brown University, agrees.  

“Wind and solar are going to be the backbone of the growth in renewables,” said Porder.  

However, the clean energy transition is not without its challenges. For renewable energy generation the problem lies with existing power grids and the need to be able to store electricity generated by renewables. Renewables generate power intermittently—solar panels can only create electricity when absorbing sunlight—electricity produced via fossil fuels is done so consistently. Most existing energy grids have been designed to deliver power from these consistent sources. It’s why the U.S. and other countries still heavily rely on fossil fuels.  

Frankly, the challenges of old power grids extend beyond renewable energy. The more electricity demand grows, the more strain is placed on mature power systems. These power grids today cannot handle the growing need for more electricity, especially now that electrification projects are booming.  

Electricity Demand Continues to Grow

The IEA forecasts that the global electricity demand will increase by 3% annually through 2023-2025. The IEA report predicts that by 2025, Asia will account for half the world’s electricity consumption, with one-third of the global electricity consumed by China alone–most likely due to its standing as the world’s most populous country and a manufacturing epicenter. China will contribute the largest share of additional renewable generation in the coming years.  

Aside from the ongoing energy crisis contributing to the growing demand for renewable energy, climate change presents a more dangerous problem. Specifically, in 2022, Europe saw its worst drought in 500 years, China and India experienced severe heatwaves, and the U.S. saw some of its worst winter storms. Aside from the risk to human life that harsh weather poses, weather events' impact on electricity demand can be even more disruptive and catastrophic.  

When old power grids fail, the result can be large, raging wildfires that quickly spiral out of control, as seen in California when faulty power lines failed in the midst of a hot summer season. Electricity demand quickly rose during the summer, as residents tried to keep cool from the unforgiving sun which, eventually, gave way to the power line’s fatal spark.

Beyond risk to human life, unsuitable energy systems can put a country’s energy security at risk. As described by the IEA, “Energy security is the association between national security and the availability of natural resources for energy consumption. Access to cheaper energy has become essential to the functioning of modern economies.”

In the IEA’s report on “The impact of weather events on electricity demand will intensify due to the increased electrification of heating while the share of weather-dependent renewables will continue to grow in the generation mix…increasing the flexibility of the power systems while ensuring security of supply and resilience will be crucial.”

Thankfully, renewable sources aid in decarbonization, leading to a hopefully milder climate. When working alongside other low-carbon energy sources, variety leads to energy diversity, which strengthens energy security and supply. Energy costs remain low and accessible for everyone.

“Renewable sources are mature and available for accelerated deployment,” the IEA reported. “[It allows] countries to build more diversified, reliable and sustainable energy systems.”  

Electrification is one of the most essential strategies for reducing CO2 emissions. Still, all of that will be for naught if these new projects rely on old systems that can’t handle the needs of renewables or greater electricity demand. As governments and companies increase electrification, it will be of the utmost importance to tackle both core challenges; power grids that can store energy for renewables and appropriately handle the growing demand simultaneously.

Sourcengine’s Product Line-Up

Before you increase electrification and renewable capacity in your sector, you must find the components that can handle the demands of adequately generating and storing electricity while withstanding extreme external forces such as weather or water. Sourcing these components is easier said than done, but with help from the leading marketplace for electronic components, any electrification project can be simplified and streamlined.  

Sourcengine is the premier e-commerce site for buying electronic components. With over 1 billion part offers from more than 3,500 traceable and vetted suppliers, engineering and procurement teams can get the perfect part for any renewable energy solution. For those with a part in mind, users can send our team of experts an RFQ for their personalized quote!

Ready to get started on your next electrification project? Let’s get started

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