Falling costs and renewable-friendly energy policies adopted by several countries in the six major geographies—North America, Latin America, Europe, the Middle East, China, and India—are prominent reasons why solar photovoltaic (PV) and wind capacity additions are expected to soar this decade.

An estimated $3.40 trillion will be invested in renewable energy during the next decade, including $2.72 trillion in wind and solar. By 2030, 54.1% of installed capacity will be renewable (including hydropower), and 37.9% will be a combination of solar and wind.

“Decentralization, decarbonization, and digitalization are the three key pillars of the global energy transition,” said Vasanth Krishnan, Senior Research Analyst, Industrial Practice, Frost & Sullivan. “The power sector will witness strong growth in decentralization during the decade, with annual global investment increasing from $53.14 billion in 2019 to $92.54 billion in 2030. Pressure will continue to build for further decarbonization within the power system as the rate of adoption of digital technologies increases in both existing and future plants to boost operational performance.”

Krishnan added: “The surge in need for flexibility is the most significant trend observed across developed markets. System operators are coming under increasing pressure to manage the system with uncertain renewable output, declining coal output, and demand-side variability. As a result, technologies and solutions such as battery energy storage systems (BESS), gas engines, demand-side response (DSR), and virtual power plants (VPP) are witnessing unprecedented adoption rates amongst utilities, solution providers, and end consumers."

Conventional power plant operators will require extreme physical and digital agility to compete with alternative power sources and stay profitable in the longer term. In this regard, digital solutions will enable conventional thermal power plants to increase operational efficiency and asset utilization to meet the present and future needs of a smart power grid.