Digitalization is not new, but it's development is happening fast across all industries, as it is becoming a vital part of the energy system and the energy transition. In fact, digital technologies will make power systems worldwide more connected, intelligent, efficient, DNV GL's Energy Transition Outlook mentions.
Digitalization will make energy more reliable, and sustainable. Smart grids are already better in safety, productivity, accessibility, and sustainability of power systems. In addition, new technologies will introduce more software and applications on top of the grid, making it even smarter.
Digitalization will also reduce costs of monitoring and control of all kinds of energy generation. In transmission and distribution networks, digital technologies will facilitate efficiency gains and a lower level of losses.
In asset-intensive energy value chains, it will improve planning and more efficient predictive maintenance of assets, causing lower investment requirements and operating costs.
As for the power sector, digitalization will better match power demand and supply. This partly balances the variability of renewable power sources.
Regarding the demand, DNV GL thinks that an annual reduction in peak-to-average electricity demand of 4% by 2050 is possible. Nevertheless, with less peak demand, the overall need for capacity will decrease. This will in turn reduce additional uptake of capacity.
Furthermore, in electricity digital monitoring and management of grid capacity utilization will reduce power losses. As a result, by 2050 such losses will be less by 25% to only 3% in the most grid-efficient region (OECD Pacific) and 13% in the region with the highest losses (Indian Subcontinent).
Finally, the report analyzes that greater asset utilization will reduce asset life expectancy and drive replacement rates towards faster asset renewal and uptake of energy-efficient technologies.
This however will be counterbalanced by the fact that more asset utilization will limit the size of asset fleets, something that requires less resource and energy use in their production.