Ready to Go Down Electric Avenue? Opportunities and Risks of the Renewable Energy Transition

There’s no doubt that the transition to sustainable energy is vital to the health of our planet. But it is also an opportunity for innovation, for creating added value, business, and skilled employment. A fundamental element of this transition is to strengthen the role of electricity as a renewable and accessible source of energy for a wide range of uses, including: 

• Mobility 
• Heating 
• Industry  

Electrification is poised to address all energy uses this decade, except for difficult-to-access sectors such as construction or long-distance transportation. However, the adoption of electricity as a commonplace renewable resource – powering cars to smart devices to much else - still faces significant challenges. This is particularly pertinent when considering the modernisation of the grid - the backbone of the energy transition. 

Challenges of Energy Transition: A Sustainability Battle? 

The grid will require substantial investment for modernisation, not only in renewable energy generation but also in charging infrastructure for Electric Vehicles (EVs) and updating the energy mix in various sectors. According to the International Energy Agency (IEA), by 2040, about 80 million kilometres of lines and cables will need to be laid or replaced worldwide. This is equivalent to all existing infrastructure on Earth at the current time, with annual investment doubling to reach $600bn by 2030 – representing a considerable technical and financial challenge. 

In addition to infrastructure issues, the energy transition raises concerns about the availability of raw materials, some of which are rare, and the environmental cost associated with their extraction.  

‘It is crucial to consider recycling strategies and sustainable mining to avoid creating sustainability problems while addressing the climate crisis,’ says Rogério. 

However, there are digital solutions which can reduce the need for material usage and accelerate the electricity transition. The implementation of digital twins, end-to-end PLM, smart grids and flexibility management can significantly increase the efficiency of electricity grid use and that of the related supply chains. Some of the newly digitised network components available today already allow for a reduction in installation times for new network substations by up to 50% and a reduction in copper usage, for example, by many tens of tons depending on installation. 

Predictive smart demand management can not only align consumption with renewable energy but also increase efficiency at the customer’s end, by incorporating information regarding its use in residential, Commercial & Industrial or others. 

This can only be achieved by the systematic employment of secure digital technologies, including AI and model-based approaches, from Advanced Grid Management Systems through to service providers and intelligent systems in homes, buildings, industry and generation.  

Digital solutions not only drive sustainability and reduce lead times, but are crucial for global decarbonisation and national energy security. This will unlock new business opportunities at an unprecedented scale.  

‘About 20% of annual investment in electric grids now goes on software, digital services and smart assets. Some countries are already leading the charge with this, while others are closely following suit,’ comments Rogério.

How Companies Drive the Energy Transition 

Companies play a significant role in driving the energy transition forwards. The competition is global, with mergers and acquisitions and the entry of new players into the race for differentiating technology and market share. According to IEA data from 2023, a substantial portion of global investment in energy has been allocated to the energy transition. If the decarbonisation of operations and industrial value chains is also considered, in addition to corporate sustainability goals and the availability of green financing, the energy sector is facing an unparalleled moment. The opportunity is enormous - and entrepreneurship, leadership and management are needed now more than ever. 

Critical Software’s Future Energy Solutions  

At Critical Software, we’re not just high-energy people; we are also equipped with a smart approach to tackle the most pressing challenges in energy. As leaders in full-cycle development services, we seamlessly integrate expert software capabilities with deep energy industry experience. 

We aim to support the energy sector by developing mission-critical software development capabilities, matured over 25 years of work in diverse industries. From designing and building software to integrating, transferring and supporting operation, we deliver innovative chip-to-cloud solutions that power our clients' next-generation digital product and solution portfolios. The domains we work in include: 

• Next Generation Power Grids 
• Advanced Metering & Smart Data 
• EV Charging 
• Intelligent Buildings & Homes 
• Smart Assets 
• Advanced Computing 

Connect with Rogério Paulo, our Business Development Director for Energy, for more on how we can help you navigate the energy transition with style and innovation. With significant domain experience, Rogério and his team are all set to power up and shape the future of energy!