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Investing in the Grid

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Bhagvan Kommadi's picture
Founder of First Quantum Computing Startup in India Architect Corner

Bhagvan Kommadi is the Founder of Architect Corner - AI startup and has around 20 years of experience in the industry, ranging from large-scale enterprise development to help incubate software...

  • Member since 2019
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  • Mar 30, 2022
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This item is part of the Special Issue - 2022-03 - Investing in the Grid 2022, click here for more

Many countries are facing challenges in integrating the renewables and make the grid securable. To handle these challenges, the grid infrastructure needs to be refactored to improve the energy generation. Grid needs to be developed to handle digital transformation initiatives.  New energy consumption approaches need to be handled by Grid infrastructure. Communication technologies need to be integrated with the infrastructure to improve the communication. Climate crisis is another challenge to the grid infrastructure. Regulatory and policies impact the grid development and the energy generation because of the climate crisis.

Cyber threats are the other problems which Grid needs to handle from a security point of view.

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In 2022, new normal is being restored and generated after multiple lockdowns and waves of Corona.  There is a plan to phase out power generation using coal in 2030.   Hence building of coal plants is put on hold in 2021. In 2022, there would not be any coal plants. This will help bring down pollution and improve the climate. The coal power generation will be ended with existing coal power plants in Europe and U.S.A.  Other countries are also focusing on the closing out of coal power plants and move on to new energy sources.

In 2022, the focus for energy industries will be to bring down the emissions.  These energy industries use energy sources like carbon, oil, gas, and coal.  Since the carbon cost is at its peak, energy industry’s focus will be to improve the climate and cut down the emissions using the other energy sources. Government is also imposing the taxes on carbon driving the energy industry to focus on improving the climate.  Solar energy industry will be in limelight in 2022. Distributed energy resources like solar will be the focus for the government to improve and develop companies to install solar plants. In countries like Australia, Belgium, Germany, and China, distributed energy market is catching up.

Investing in Grid helps in its stability and making it flexible which  is very important for the energy industry. Hence the distributed energy and electric vehicle power generators/chargers will be the focus in the energy industry during 2022. Many countries like Australia are imposing lesser export taxes to encourage distributed energy. The other area is to have distributed energy generation for low salaried and mid salaried citizens.

Renewable energy industry is another area which will be the focus in 2022.  There will be challenges in the area. Gavin Thompson, who is Vice Chairman of Energy Asia and Pacific has mentioned that “The difficulties that renewable energy developers worldwide have faced this year look set to increase “. Energy transition is another area where energy industry is focusing on. Metal production will be increased to accelerate the energy transition. Many governments focusing on climate are reducing the gas emissions and developing the infrastructure for metal production.  Governments are developing and improving the supply chain by distributing the raw material required for mass production of metals. In 2022, energy consumption might come to new normal but lesser than the normal consumption.  As travel and tourism will be impacted, new normal energy consumption will take a hit.

After grid expansion and investment in grid, what’s next ??. In 2022, oil production will see an increase to 4000 k barrels every day.  Strong increase in production is increased all the countries in the world not just the countries in the OPEC group. In 2022, Oil supply and demand will be matched like in the normal.  Permian Basin based oil generation will also see a rise in 2022. This will help bring down the carbon-based generation and improve the climate.

Electric vehicles are catching up and they will be in limelight in 2022. Some governments might bring down the subsidies and this can hit mildly the EV market. Across the world, the usage might increase by six percent in 2022.  In 2022, a big shift to low carbon-based production will be seen and focus will be on wind and solar energy sources.  In China, because of coal production and demand mismatches last year, China might end up increasing the coal production.  Sustainability will be the key initiative for different governments in the world. Technologies related to sustainability, renewable energy production, energy grids, and storage need to be developed for low carbon-based energy production.  This will help to balance between the demand and cutting down the emissions thus improving the quality of energy production. 

In 2022 and beyond, clean power and green energy initiatives might pick up popularity. Electric vehicles also will help in low carbon emissions and improve the climate. In Europe, usage of diesel and petrol-based vehicles might come down in 2030 and beyond. This will be a huge win to green energy initiative. On the other hand, energy distribution infrastructure needs to be improved to catch up on Electric vehicles charging. The charging infrastructure needs to be created to support the increasing popularity of Electric vehicles. Microgrids might be the solution which will help improve the distribution of energy. There might be impact on low coal initiative because of China.  BBBA (Build Back Better Act) act might change the Electric Vehicles market by seeing huge investment from IIJA (Infrastructure Investment and Jobs Act). The other area to watch for is the renewable energy generation and electric appliances popularity.

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