Market research firm Frost & Sullivan announced the release of its Global Power Industry Outlook.
The report forecasts solar and wind to dominate power generation additions through to 2021. The global power industry is expected to invest $2.20 trillion in energy generation between 2017 and 2021.
Increases in renewable energy adoption and growth of the energy generation sector will be driven by factors including declining capital cost of solar and wind, rise in battery energy storage adoption, disruptive start-ups contributing to competition and increases in mergers and acquisitions.
Chief highlights and growth opportunities include:
- The 3Ds of power – decarbonisation, decentralisation, digitalisation – continue to be underlying factors determining the global power market landscape;
- The residential battery storage market will be the fastest growing in 2018 driven largely by the surge in the behind-the-meter residential deployments in the US, Germany, and Australia;
- Over $400 billion will be invested annually in generation capacity. Solar will account for $603.4 billion and wind for $553.7 billion.
- The energy transition is proving to be costly for other sources of generation, and there is little evidence of an improvement in the short term;
- Futuristic thinking as a necessity - implications of macro changes - renewable energy and electric vehicles are still blurred on the electricity system and decisions must be made in light of these changes.
- In 2017, solar surpassed nuclear generation and is likely to be the fourth largest generation type followed by coal, gas and hydro by 2020.
Vasanth Krishnan, energy & environment analyst at Frost & Sullivan, said: "To navigate through current trends and challenges, organisations must start embracing business models that enhance operational and process efficiency while reducing costs. Adopting disruptive digital solutions that focus on consumer needs will bring the organisation closer to technological and efficiency transformation.
"Analysing long-term scenarios and defining positioning strategies should be key focus areas for industry participants in the long term.
"Also, as the renewable and distributed energy markets mature, a large installed capacity of equipment will need to be serviced, offering attractive growth prospects within the operations and maintenance sector."