Let digital links and AI fix gaps in power grids as they go green

Digital interoperability and AI can deliver energy efficiency and resilience against transition shocks

- FATIH BIROL & NANDAN NILEKANI

Around the world, energy systems are undergoing profound, rapid transformations that will leave them looking dramatically different a decade from now.

A major driver is the increasing electrification of the global economy. Not only are more people adopting electric vehicles (EVs), heat pumps and smart (digitally interconnected) appliances; we are also witnessing explosive growth in the construction of electricity-hungry data centres, many of them powering AI. Owing to these trends, the International Energy Agency has projected that electricity demand will grow six times faster than overall energy demand by 2035.

The supply side of the energy sector is also evolving rapidly. Renewable energy sources, especially solar, are set to play increasingly significant roles in power systems globally. These trends and technologies could deliver greater energy independence and lower emissions if the right policies and infrastructure are in place. But they also add a layer of complexity to grid management, because operators must account for variable flows of electricity while ensuring reliability and affordability for consumers.

Grids also need to power more places and things. By 2030, homes and businesses will have more than 30 billion digitally connected devices, twice as many as today. To keep pace, energy systems’ flexibility—their ability to respond in a timely manner to fluctuations in electricity supply and demand—must increase much faster than is currently expected.