According to the report, ‘Digitilization of Energy Systems’, the global market for digitalisation in the energy sector is set to grow to $64 billion by 2025 and new energy innovations will be centred on digital technologies and the strategic use of data.
The study claims that the largest driver for global digital technology revenues in 2025 will be smart meters, growing 44% between now and 2025, to $26 billion.
Digitilisation: sector shifts
The report predicts significant shifts in the intelligence of digital technologies used in energy from today to 2025, and a big change in the sectors of the energy system that most benefit from these technologies, BNEF highlighted in a statement.
According to BNEF, “today, the biggest use of digital technologies like sensors, data collection and analytics in the energy sector is to improve the bottom line of fossil fuel generators.
“Revenue for digital services for fossil fuel operation and maintenance, or O&M, are estimated to be $24 billion in 2017 – some 44% of the total market size for digitalisation measured by BNEF.”
BNEF added: “However, as natural gas and coal plants come offline, and those that remain become digitalised, the opportunities for new revenues from the fossil fuel sector will shrink.
“By 2025, digital technologies will be more intelligent and more capable, helping home owners that own rooftop solar, batteries or EVs (often termed ‘prosumers’), to become more autonomous and derive greater value from these assets.
“This could be through trading energy with neighbours or better management of peak power prices.”
Nigeria has been identified as a pack leader for digitalisation of the power and energy sector in Africa due to beneficial government policies, unique start-ups and the rollout of network infrastructure.
Claire Curry, head of emerging technology analysis at BNEF, said: “Home energy management technologies will see the most significant change in digital revenues, rising from $1 billion in 2017 to $11 billion in 2025.
“The largest driver for digital technology revenues in 2025 will be smart meters, growing 44% between now and 2025, to $26bn. This revenue increase matches the fall in digital revenues from fossil fuel O&M – 46% over that time period.”
Market size for digital technologies in energy
According to BNEF, “digital technologies like big data, analytics and machine learning, blockchain, distributed energy resource management, and cloud computing, can help overcome some of the key challenges in the energy sector – most notably intermittency, aging grids, balancing distribution-connected generation, managing consumer self-generation, and coping with increasing system complexity.”
Julia Attwood, associate on the emerging technology analysis team and lead author of the report, said: “Countries with high penetration of distributed renewables, good communications network infrastructure, and robust venture capital investment in digital technologies are likely to take rapid advantage of energy digitalization.
“Italy, for instance, is one of the global leaders in small-scale PV, has almost 100% high speed network coverage, and supportive regulation for digital technologies,” Attwood added.
Access further information about the report here.
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