Renewable Energy: Steady Power Supply

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Did you know that analytics and connected products can help renewable energy firms provide steady power supply?

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Insung Yoon on Unsplash

Target audience: Decision makers (CXOs/Directors) of IT consulting, automation, renewable energy, manufacturing & allied firms, Investors (Venture Capitalists, Private Equities, Investment Bankers), management consultants, business strategists, innovators, and curious people.

Reading time: 5-10 min.


Due to many reasons like global warming, high population growth, lifestyle improvement in developing countries, utilities worldwide have been investing in renewable energy sources.

The main renewable energy sources today are hydropower, wind energy (on-shore and off-shore), solar photovoltaic energy (solar PV), and other upcoming sources. Major upcoming ones include concentrated solar-thermal power (CSP), hydrogen fuel-cells, bioenergy, geothermal energy, and ocean energy.

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Andreas Gücklhorn on Unsplash

Important non-renewable energy sources in use today are coal-fired thermoelectric plants, nuclear power plants, and natural-gas fired power plants.

Of these energy sources, natural gas is widely used as a backup alongside renewable energy sources. For instance, if bad weather stalls energy generation through renewable energy sources, utilities switch to natural gas-fired power plants. The main reason is that this energy source can have a flexible ramp rate. That is, rapid ramp-up and ramp-down cycles can be set as per the client’s power requirements, like renewable energy sources (solar & wind energy). Unfortunately, this energy source causes high pollution (internal combustion or gas turbine engine), due to generation of nitrogen oxides (NOx).


Investments in renewable energy (solar) as a reliable source of electricity began in the 1980s. These experiments (solar modules) were done for remote areas, as it was too expensive to connect these townships with the nearest grid network.

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Our World in Data
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Our World in Data

Since 2010, the cost of solar modules has drastically reduced, which enabled low cost of electricity from this energy source. This has led to a large-scale growth of solar power plants in the world in the past decade (2010—2020), including India. Today, India has about 40 GW of installed solar powerplants, while the Ministry of New and Renewable Energy (MNRE) has set a massive target of 450 GW of renewable energy by 2030.

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Our World in Data
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Our World in Data

Current & Future Trends:

As per Allied Market Research, the Global Renewable Energy Market was valued at $881.7 billion in 2020. This value is expected to reach $1,977.6 billion by 2030, at a CAGR of 8.4% over this forecast period (2021—2030). The largest and the fastest growing region is Asia Pacific, led by India and China.

The major players include First Solar Inc., Vestas Wind Systems A/S, Canadian Solar Inc., Jinko Solar Holding Co. Ltd, and General Electric Company.

The renewable energy market would be led by the hydropower segment which had over 48% market share in 2019. Governments prefer investments in hydropower sector, due to factors like climate change, reduction of fresh water sources (water security), and multiple uses of stored water (agricultural, residential, industrial). Other reasons include “water battery”, that is, energy storage in the form of Pumped Storage Hydropower (PSH). PSH accounts for about 95% of global energy storage capacity, much higher than other forms of energy storage systems (Li-ion batteries, etc.).

The growth of solar and wind power systems would depend largely on a complete solution for 24×7 energy generation (steady power supply). This includes integration of on-site energy storage systems like Li-ion batteries, PSH, hydrogen generation, etc.

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Allied Market Research
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Mordor Intelligence
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Mordor Intelligence
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Mordor Intelligence

As per Grand View Research, the Global Energy Storage as a Service Market was valued at $1.2 billion in 2020. This value is expected to reach $2.7 billion by 2028, at a CAGR of 10.7% over this forecast period (2021—2028). The largest and the fastest growing region is North America (32%, 2020).

The key growth drivers are accountability (avoid black outs) by utility firms irrespective of external factors like low sunlight or windspeeds. Utilities are keen to adopt analytics solutions to ensure steady energy generation (proactive approach to sudden changes in weather). There is a high demand for services like peak load (assessment), energy arbitrage, black start, and demand charge management. Most customer segments like industrial, commercial, and residential sectors strongly prefer to use such services (incentives and subsidies).

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Grand View Research
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Grand View Research

Challenges: Utilities Sector

For many years, the impact of renewable energy sources was not visible, as it comprised a small percentage of the overall portfolio of utility firms. In the recent past, many governments have offered subsidies to help firms transition to clean energy. The year 2021 has not been an excellent one for utility firms, especially in Europe.

  • Firstly, due to low wind speeds (summer & fall of 2021) in the United Kingdom and the surrounding areas, many utility firms experienced a huge crisis (offshore wind turbines).
  • Secondly, most of the utility firms in UK chose to use natural gas power plants as a backup, in case of the failure of renewable energy sources. The rapid demand for natural gas shot up the prices drastically (seller’s market).
  • Thirdly, this situation worsened due to other factors—UK’s lower than usual natural gas reserves after the winter of 2020 (slow recovery expectations post pandemic).
  • Fourthly, China’s economy recovered faster than the world (post pandemic), partly due to a strong demand for products in North America and Europe. To support their economy, Chinese utilities and factories suddenly increased their consumption of natural gas.
  • Fifthly, for decades UK has been using gas powered heating systems for residential and commercial buildings. As a result, gas supplies had to be diverted to both energy generation, and commercial & residential heating systems.
  • Finally, these mutually exclusive global events led to 30+ bankruptcies in the energy sector in UK, a rise in inflation, and left many people with no power and heat (high energy & gas costs).
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Karsten Würth (➡️ @karsten.wuerth) on Unsplash
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American Public Power Association on Unsplash

Opportunities: How can we avoid such situations (blackouts, high energy costs) in the future?

  • Firstly, it is important for utility firms to invest in multiple energy sources, both in renewable and non-renewable sources. This would help them hedge against high rates of one type of fuel or energy source. They should also consider investments in new type of nuclear energy plants like small modular reactors (SMR).
  • Secondly, use of emerging technologies can solve issues like machine breakdowns and grid failures, through predictive analysis and early warnings. This involves use of—existing technologies in hardware (sensors, IoTs, etc.), products (robots, GPS monitoring, etc.), and emerging software technologies (AI, ML, SaaS, PaaS, cloud computing, block chains, etc.).
  • Thirdly, these technologies can help utility firms obtain real-time tracking of key factors that affect energy generation from renewable energy sources. For example, use of smart batteries and advanced weather stations can help utilities deliver energy during peak hours with a high level of confidence.
  • Finally, other examples include use of AI/ML technologies to study historical data of solar insolation, or wind speeds to obtain an accurate analysis of current and future energy generation. This can help utility firms plan and generate energy from other sources (renewable or non-renewable) to meet their scheduled energy delivery commitments.
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To conclude, the use of renewable energy in the utilities sector would continue to witness a huge growth globally. This opens new opportunities for data analytics, integration services (decentralised storage), and the use of innovative products like smart batteries and advanced weather stations, to support utility firms (operations teams).