Energy: the five trends for 2023 according to Eaton

Looking at the year just ended and the challenges that are shaping the market, Eaton has identified the 5 trends that will shape this industry for 2023

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Paolo Tagliabue - Segment Marketing Manager Energy Storage Division, Eaton Italy

The year 2022 has profoundly marked the energy sector, especially in the wake of the crisis triggered by the Russia-Ukraine conflict and the resulting price rise, which has been a further boost for the development of renewable energy. Long a focus of debate, including in light of the climate neutrality goals set by the European Union, the energy transition will drive the implementation of new models for power generation in 2023. To modernize the grid, power transmission and distribution operators will need to adopt an approach aimed at decarbonization, decentralization and digitization, while implementing solutions to support cybersecurity and sustainability. "For a more sustainable future, it will be crucial for both companies and individuals to embark on a path that can concretely reduce CO2 emissions ," said Paolo Tagliabue, Product Marketing Manager Energy Storage Division at Eaton Italia. "Amore conscious use of energy is a fundamental step for energy transformation: the role of operators is to encourage the diffusion of renewable energies, as well as to work for the adoption of processes and technologies that allow to make the most of alternative sources and new models of distribution of energy itself. Eaton is a proactive player in this scenario and offers energy management solutions, primarily with its xStorage Home and BuildingStorage systems." Looking back at the year just ended and the challenges that are shaping the market, then, Eaton has identified the 5 trends that will characterize this industry for 2023.

1. Decentralized energy production

The energy transition is blurring the boundaries of the grid. From individual homes to businesses, more and more users considered "behind the meter" (i.e., users connected to the grid with a POD) will move to an "in front of the meter" approach (moving from mere consumers to "prosumers," i.e., consumers-producers): this will enable them to generate some of their own energy from different sources, such as photovoltaics, as well as to manage in an optimized way the consumption of self-produced energy through the use of energy storage systems. So-called "prosumers," those users who produce and consume their own energy, will thus assume a key role in mitigating climate change by reducing dependence on fossil fuels. In fact, domestically generated energy, even in small quantities, will enable countries to reduce imports, promoting energy independence. The opportunities are obvious, but the decentralization of the energy system poses new challenges on how to balance the variable flow of energy from prosumers and renewable energy producers while maintaining a steady level of Grid stability, particularly at times of peak demand.

2. Demand-side flexibility: an advantage all to be exploited

In 2023, grid operators are expected to foster so-called "demand flexibility": as prosumers become familiar with generation dynamics, they will figure out how to profit by selling the energy produced by their own storage systems (including electric vehicle batteries) to the grid, while gaining an economic advantage. However, operators are finding it difficult to handle large bidirectional energy flows on grids designed until now for unidirectional flows (from a few generators to many consumers). In the next 12 months, taking full advantage of grid flexibility can make a difference: in fact, as shown by a recent DNV report published by SmartEn and supported by Eaton, this would save up to €29.1 billion and 37.5 million tons of greenhouse gas emissions each year by 2030.

3. Digitization: challenge or opportunity?

A complex energy model, with varying levels of energy supply and demand, must be managed digitally. However, the utilities sector faces a dual challenge: on the one hand, there is a push to digitize networks; on the other hand, these must be supported by an upgrade of existing infrastructure. The sector is thus facing a critical period of transition, which will become even more stringent in 2023. In a context in which it is necessary to be able to renew service models in spite of less than state-of-the-art infrastructure, digitization can be seen both as a key to success and as an obstacle to the most pressing challenges.

4. Cybersecurity for all-around protection

Decentralization and digitization involve the processing of large amounts of data, raising some cybersecurity concerns: integrating more data into a single system increases its vulnerability. Preparing the grid for the energy transition and ensuring that infrastructure is not compromised by cyber attacks is a collective responsibility. In 2023, the energy and cybersecurity sectors will need to work closely together to protect the grid and ensure that climate neutrality goals are not jeopardized by cyber attacks. Both governments and companies will need to work in synergy with the energy sector to ensure a robust strategy: this involves investment in innovative technologies that can pave the way for more efficient risk management structures and processes.

5. SF6-free switchboards for a truly sustainable future

Starting in mid-2020, the European Union and other European countries, have begun to ban the use of SF6 gas, which is responsible for global warming, in medium-voltage switchgear. Utilities, along with many other sectors that use this type of switchgear, will therefore have to choose alternatives for future projects. A decentralized grid with high renewable energy intensity will require more frequent switching, so the European switchgear market is growing. Fortunately, SF6-free medium-voltage switchgear, such as Xiria, is already available up to and including 24kV, so the development of this technology may incentivize the decision to eliminate SF6 gas altogether in 2023 and beyond.


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