In recent years, the power industry has been undergoing a seismic shift, driven by the global push towards electrification. This transformation is not just a trend; it is a defining moment that promises to reshape the way we generate, distribute, and consume energy. As we stand on the brink of this new era, it is crucial to understand the implications of electrification and how it is set to change everything, and yet there are strong forces pulling in seemingly opposite directions as these changes unfold.
As publishers and proponents of the communities we refer to as Power Systems and Transformer Technology, we have seen firsthand many of incredible advances that are going to define the next generation, no pun intended, of not just technology, but the next generation of leadership within the industry. While there have been great strides with renewable generation, that has come as there is an increasing demand curve for electrical power. Data Centers, particularly those engaged in AI, and EVs are creating a hockey stick demand curve.
The power industry itself is also undergoing a transformation as it adapts to the demands of electrification. The integration of renewable energy sources, such as wind and solar, into the grid is a critical component of this transition. These technologies have seen significant advancements in efficiency and cost-effectiveness, making them increasingly competitive with traditional energy sources. As a result, the power grid is becoming more decentralized, with a growing number of distributed energy resources contributing to the overall energy mix.
“Electrification refers to the process of replacing technologies that use fossil fuels with those that use electricity as a source of energy.”
I read this statement recently and it made me think about the demand curve and the strong forces that are often puling in opposite directions as mentioned above. Given that the fossil fuel industry has also seen demand curve growth during these times of change indicates that this shift from fossil fuels to renewables is not as successful as we might think. And if it really came down to renewables battling fossil fuel generation during a time of a demand curve that is flattening, do you think for a moment that the oil and gas industry is just going to back away and concede what has been their market dominance for the past century? I think not.
Is there a better balance then, a better approach to electrification that recognizes that the relatively nascent renewables growth – apologies to the Dutch windmill industry – we are experiencing is not going to replace fossil fuels generation in the very near future. And please believe I am not giving up the fight to create cleaner air and a cleaner planet but recognizing that these two industries must find a way to coexist during the search for solutions.
Yes, getting rid of coal fired plants in North America, Europe and some other parts of the world, is something that needed to be done a long time ago, but India, China, Malaysia and other countries are adding many new coal-fired plants as the fuel is cheap and plentiful. They charge that the west has created much of the problem with global pollution, built our industrial base on the use of coal, and now ask others not to do the same. Remember, we live on a rotating planet so eventually the impact of air quality and global warming affects the entire world, not just one country or continent, so it will require a global solution.
One final thought however is one that is something we are facing in the US as I type, as there is a political component that has been added in that we have just witnessed a changing of the guard, politically, from a green energy focused administration to an oil energy supported and focused one. I didn’t think the oil and gas folks would just give up their very lucrative market position that easily. What will these changes bring about? We have yet to see.
My hope is that we recognize that it is too late to turn the clock backwards and return to the “bad old days” where we see fossil fuel generation as the only answer and watch the progress we have already made toward a cleaner future stall. But, at the same time we recognize that oil and gas generation have a part to play in this energy transition, both now and likely into the future. There is room for both, a need for both, and with better long-term plans, and government support with reduced interference and regulation, which is one of the current stumbling blocks as the problem with permitting has become intolerable in many instances, for both sides of the power industry.
If we can avoid the political extremes and work for a better future for society, not just for one country, but for our entire global community, then we can work towards a lasting solution for the power industry, making electrification our defining moment.
