As part of the France 2030 investment plan, the energy sectors are a key strategic issue for the French government, both in terms of industrial sovereignty and international competitiveness. HAïAT's consultants have identified 5 key trends that will shape France's energy future:
Decarbonation of primary energy sources
Electrification of final energy consumption
Decentralization of energy resources
Digitalization of energy systems
Security reinforcement and increased resilience
Mega Trend #1 – Decarbonation of primary energy sources
Rising energy concerns, supported by the various summits and targets set at national and international level (Paris agreements, European directive on energy...), have made the decarbonization of energy sources a major issue for the coming years. On the top of that, this transition needs to be accelerated in light of the geopolitical context (war in Ukraine and the Middle East) threatening fossil fuel supplies, particularly in Europe.
The decarbonization of the economy is a key objective for many countries to limit climate risk, and implies an energy transition at all levels (state, companies, individuals). Gradually, we are experiencing increasing pressure from legislators, investors and consumers who are increasingly concerned about corporate sustainability initiatives.
Therefore, the entire value chain is being redesign and rethought:
On the production side, the use of fossil fuels is replaced by locally-produced renewable energy sources, mainly wind and solar power.
On the transformation level, through the use of low-carbon hydrogen and bioenergy
And also in post-production storage, through greater energy efficiency and heavy investment in carbon capture and storage technologies.
This transition will have a fundamental impact on the evolution of energy demand:
Declining use of fossil fuel :
Oil: expected decline in oil demand, impacted primarily by the electrification and energy efficiency gains planned in the automotive sector. However, oil will continue to play a major role in the global energy system over the next 20 years
Natural gas: growing demand from emerging economies to support their industrialization, offset by the transition to lower-carbon energy sources in developed countries
Impressive growth in renewables (wind/solar): driving most of the growth in electricity production, boosted by their improved competitiveness against other energy sources (particularly in inflationary times) and favourable legislation :
Hydrogen: low-carbon hydrogen will also play a role in decarbonizing the energy mix, mainly from 2030-2040 onwards. However, due to its high cost, it will mainly be used for applications where more efficient energy alternatives are not available in the long term:
Some segments of mobility that cannot be electrified (sea freight, long-haul flights, off-road vehicles, etc.),
Energy-intensive industries that are difficult to decarbonize (e.g. steel industry).
Or as decarbonized energy reserves for energy systems based on volatile energy sources.
Bioenergy: the use of "modern" biomass (wood pellets, biofuel, biomethane) should grow considerably and gradually replace the use of traditional biomass (firewood, animal dung, etc.) in industrial applications that are difficult to decarbonize.
Mega Trend #2 : Electrification of uses
Demand for electricity is expected to rise sharply over the coming decades, primarily due to the development of emerging economies and the growing electrification of energy systems worldwide (buildings, industry, transport) : 90% of growth in electricity demand is expected to come from emerging economies
In terms of use, the electrification of buildings (via the massive adoption of heat pumps) will be one of the main sources of demand :
The role of electrification in transport will also increase significantly, largely driven by the electrification of road transport.
Compared with other sectors, electrification opportunities in industry are more limited, particularly for processes requiring high temperatures (>200°C).
The electrification of the world's energy system should be supported for the largest part by the development of wind and solar power, and to a smaller degree by the development of nuclear power, via the deployment of new generations of reactors from the second half of the 2030s.
The electrification of mobility and the use of intermittent production sources (solar, wind) will also lead to substantial advances in electricity storage, using more efficient storage technologies such as new-generation lithium-ion batteries, as well as the development of specific infrastructures (e.g. recharging infrastructures).
Mega Trend #3 : Decentralization
Today, electricity is mainly generated centrally, by large power plants owned and operated by utilities or other independent power producers, before being distributed through nationwide networks of transmission and distribution lines and substations.
With the energy transition and the growing contribution of renewable energies, we are increasingly experiencing the emergence of a system in which electricity generation and storage are more distributed, decentralized, and carried out by a variety of small devices connected to the grid also called Distribution Energy Resources (DER).
These DERs are decentralized, modular and more flexible technologies, located close to the consumption site, even if their capacity does not exceed 10 megawatts (MW) :
DER systems typically use renewable energy sources, including small hydro, biomass, biogas, solar, wind and geothermal power, as well as grid-connected storage devices
Through an interface, DER systems can be managed and coordinated within an intelligent network
The future electricity grid will include a large number of small, decentralized microgrids, giving consumers greater control over the source of their electricity and greater reliability.
The industrial applications requiring the most electrical and thermal energy (iron and steel, mining, petrochemicals, datacentres, etc.) will be able to rely from the second half of the 2030s, on the emergence of small modular nuclear reactors (SMR /AMR), directly installed on site, and capable of generating 40 to 300 megawatts.
Mega Trend #4 : Digitalization
The emergence of the IoT, supported by AI, will play a key role in the energy transition.
It will ensure better interconnectivity of all elements, from the power plant to the household, and optimization across the entire value chain, improving energy efficiency by matching supply and demand at every point on the grid.
The volume and granularity of the data generated will help utilities, businesses and private individuals, in particular for a better visualization and control of energy consumption, and an improvement in energy efficiency by controlling consumption in real time.
AI will also be increasingly deployed for predictive maintenance: remote monitoring systems will assess the risk of power generation failure and enable the necessary preventive actions to be planned
AR/VR is used today to improve site safety, facilitate remote maintenance of offshore structures and help design new products and sites more efficiently.
Mega Trend #5 : Safety and resilience
The need for security and reliability of energy supply, formerly pushed behind the other two major parameters of sustainability and affordability, is making a comeback with the heightening of geopolitical tensions (particularly in Ukraine and the Middle East), the disruption of supply chains and soaring inflation.
In Europe, Russian supplies have always played an important role in energy imports. A long-lasting war in the Middle East is also likely to have major repercussions on world oil and gas markets.
States are thus encouraged to guarantee their energy security, in particular through :
Diversification of energy sources, in particular investment in domestic energy production
Infrastructure resilience
Strategic reserves
Price stability
Organizations, particularly industrial companies, will need to develop their risk management capabilities and strengthen their resilience to adapt to the increasing frequency of political, economic and social events impacting the cost of energy supply.
Ensuring the skills needed to support both the digitization of the energy sector and the growth of renewable energies is one of the key challenges facing companies in this sector :
According to the International Renewable Energy Agency, the number of jobs in this sector will reach 38 million by 2030
In the United States, the number of renewable energy and environmental job postings on LinkedIn increased by more than 200% between 2018 and 2022. This number exceeded the number of job postings in conventional energy sectors, such as oil and gas.
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