Capgemini has published the 22^nd edition of its annual study, the World Energy Markets Observatory (WEMO) report, created in partnership with De Pardieu Brocas Maffei, Vaasa ETT and Enerdata which looks at continuing trends in the energy market.

It found that power generation from renewables and storage technologies are maturing quickly but with the growing share of renewables in the electricity mix and closure of schedulable generation, grid stability has become an industry concern.

This year’s WEMO also looks at two opposing narratives: in 2019 a continuation of previous trends related to energy transition, renewables and storage technology progress, climate change issues, and energy markets evolution; and the profound industry-wide impact of COVID-19 in 2020 that will reset the baseline and establish a so-called “new normal”.

The first key takeaway is the significant drop in consumption due to COVID-19 has led to the largest reduction of greenhouse gas emissions since World War II but the long term climate change goals are still a concern.

Despite the seemingly positive data in 2020, Capgemini energy and utilities senior advisor Colette Lewiner says these reductions are temporary: “This 2020 emissions decrease is linked to the lock-down period and remaining mobility restrictions. Emissions will likely rise again as the world recovers from the pandemic. By way of illustration, it would take a similar restriction, every year for the next 10 years, to get on the right environmental trajectory, which is of course unviable. Profound changes are needed to reach climate change objectives.”

The second takeaway is that generation from renewables and storage technologies are maturing quickly.

Renewables account for more than half of the worldwide electricity generation investments, more in developed countries and less in developing countries that continue to build coal and gas plants to meet a booming electricity demand. With the growing renewables market and the progress of technology achievements, costs are declining again by more than 10% (wind and solar) in 2019, with consistently lower costs being recorded month after month. Offshore wind now seems promising while onshore acceptance remains the problem.

And finally, the growing share of renewables in the energy mix coupled with the closure of schedulable generation, means grid reliability becomes a concern.

Capgemini global head of the energy and utilities sector Philippe Vié adds that: “Numerous digital tools and assets are mature and available to improve predictability, reliability, grid stability and finally security of supply, accelerating Energy Transition.”

For more information and to download a full copy of the report, click here.