Check out our FREE Resources page – Download complimentary business frameworks, PowerPoint templates, whitepapers, and more.

Flevy Management Insights Q&A
What are the next big trends in renewable energy that businesses should prepare for?

This article provides a detailed response to: What are the next big trends in renewable energy that businesses should prepare for? For a comprehensive understanding of Sustainability, we also include relevant case studies for further reading and links to Sustainability best practice resources.

TLDR Organizations should prepare for the renewable energy trends of Decentralization and Digitization, advancements in Energy Storage Technologies, and the emergence of Green Hydrogen by adopting proactive Strategic Planning and investing in new technologies.

Reading time: 4 minutes

The renewable energy sector is undergoing rapid transformation, driven by technological advancements, policy shifts, and changing consumer preferences. For organizations looking to stay ahead, understanding these trends is critical. This analysis will delve into the next big trends in renewable energy and provide actionable insights for C-level executives to prepare their organizations for what lies ahead.

Decentralization and Digitization of Energy Systems

One significant trend is the decentralization and digitization of energy systems. Traditional, centralized energy systems are giving way to decentralized models, where energy generation, storage, and consumption occur closer to the point of use. This shift is facilitated by the proliferation of digital technologies, enabling smarter energy management and distribution. According to McKinsey, digital solutions can enhance the flexibility and reliability of the electricity grid, integrating more renewable sources and enabling real-time demand response mechanisms. This transformation not only reduces transmission losses but also empowers consumers to become 'prosumers'—producing and consuming energy within their microgrids.

Organizations should consider investing in digital platforms that enable the integration of renewable energy sources into their operations. This includes energy management systems (EMS) that optimize energy use and storage based on real-time data. Additionally, leveraging blockchain technology can ensure transparent and secure energy transactions within decentralized networks, fostering trust among participants.

Real-world examples of this trend include the Brooklyn Microgrid project in New York City, which allows residents to buy and sell locally generated solar energy over a blockchain-based platform. Such initiatives not only demonstrate the feasibility of decentralized energy systems but also highlight the potential for digital technologies to revolutionize the energy sector.

Are you familiar with Flevy? We are you shortcut to immediate value.
Flevy provides business best practices—the same as those produced by top-tier consulting firms and used by Fortune 100 companies. Our best practice business frameworks, financial models, and templates are of the same caliber as those produced by top-tier management consulting firms, like McKinsey, BCG, Bain, Deloitte, and Accenture. Most were developed by seasoned executives and consultants with 20+ years of experience.

Trusted by over 10,000+ Client Organizations
Since 2012, we have provided best practices to over 10,000 businesses and organizations of all sizes, from startups and small businesses to the Fortune 100, in over 130 countries.
AT&T GE Cisco Intel IBM Coke Dell Toyota HP Nike Samsung Microsoft Astrazeneca JP Morgan KPMG Walgreens Walmart 3M Kaiser Oracle SAP Google E&Y Volvo Bosch Merck Fedex Shell Amgen Eli Lilly Roche AIG Abbott Amazon PwC T-Mobile Broadcom Bayer Pearson Titleist ConEd Pfizer NTT Data Schwab

Advancements in Energy Storage Technologies

Another pivotal trend is the advancement in energy storage technologies. The intermittent nature of renewable energy sources like solar and wind has historically been a significant barrier to their widespread adoption. However, recent breakthroughs in battery technology are making renewable energy more viable and reliable. For instance, Bloomberg New Energy Finance reports a rapid decline in the cost of lithium-ion batteries, projecting a further 70% reduction by 2030. This cost reduction is making energy storage systems economically feasible, enabling organizations to store excess energy generated during peak production times for use during demand spikes or low production periods.

Organizations should explore opportunities to incorporate advanced energy storage solutions into their renewable energy strategies. This could involve deploying large-scale battery storage systems to mitigate the risks associated with energy intermittency or investing in research and development to explore alternative storage technologies such as flow batteries or compressed air energy storage (CAES).

Companies like Tesla and Siemens are leading the way in integrating energy storage solutions into renewable energy projects. Tesla’s Powerpack and Powerwall systems, for instance, are being used in homes, businesses, and utility-scale projects around the world to store renewable energy, demonstrating the practical applications and benefits of advanced energy storage.

Learn more about Cost Reduction

Green Hydrogen as a Game Changer

Green hydrogen, produced through the electrolysis of water using renewable energy, is emerging as a game-changer in the renewable energy landscape. It offers a solution to decarbonize sectors where electrification is challenging, such as heavy industry and transportation. The International Energy Agency (IEA) highlights green hydrogen’s potential to play a pivotal role in achieving global decarbonization goals. As technology matures and costs decline, green hydrogen could become a cornerstone of the global energy system, providing a clean, versatile energy carrier.

For organizations, engaging with green hydrogen means considering it in long-term Strategic Planning and investment decisions. This could involve assessing the feasibility of green hydrogen for operations, particularly for those in energy-intensive industries, or exploring partnerships with technology providers and other stakeholders in the green hydrogen value chain.

Real-world applications are already underway, with projects like the Hydrogen Council, a global initiative of leading energy, transport, and industry companies committed to developing the hydrogen economy. In regions like the European Union, substantial investments are being made to ramp up green hydrogen production as part of broader efforts to achieve carbon neutrality by 2050.

Organizations must stay abreast of these trends in renewable energy to remain competitive and sustainable. Decentralization and digitization, advancements in energy storage technologies, and the rise of green hydrogen present both challenges and opportunities. By adopting a proactive approach to Strategic Planning, investing in new technologies, and fostering innovation, organizations can navigate the complexities of the renewable energy transition and emerge as leaders in a greener, more sustainable future.

Learn more about Strategic Planning Value Chain

Best Practices in Sustainability

Here are best practices relevant to Sustainability from the Flevy Marketplace. View all our Sustainability materials here.

Did you know?
The average daily rate of a McKinsey consultant is $6,625 (not including expenses). The average price of a Flevy document is $65.

Explore all of our best practices in: Sustainability

Sustainability Case Studies

For a practical understanding of Sustainability, take a look at these case studies.

Carbon Footprint Reduction in Power & Utilities

Scenario: The organization is a mid-sized power generation company in the renewable sector, facing substantial pressure to further reduce its carbon footprint amidst tightening environmental regulations and increasing market competition.

Read Full Case Study

Sustainable Operations Enhancement in Power & Utilities

Scenario: The organization operates within the Power & Utilities sector and is facing challenges in aligning its operational practices with the increasing demand for Corporate Sustainability.

Read Full Case Study

Sustainable Strategy Initiative for Luxury Fashion Retailer

Scenario: A firm specializing in luxury fashion retail is facing challenges in aligning its business operations with the principles of Corporate Sustainability.

Read Full Case Study

Sustainable Growth Strategy for Agritech Firm in North America

Scenario: An agritech firm operating in North America is grappling with integrating sustainable practices into their rapidly scaling operations.

Read Full Case Study

Sustainability Transformation for a Global Beverage Producer

Scenario: A multinational beverage producer with operations in over 80 countries is grappling with sustainability challenges.

Read Full Case Study

Low-Carbon Transition Strategy for Mid-Sized Agricultural Firm

Scenario: A mid-sized agricultural firm in the Midwest is facing pressure to align its operations with emerging sustainability standards and reduce its carbon footprint.

Read Full Case Study

Explore all Flevy Management Case Studies

Related Questions

Here are our additional questions you may be interested in.

What are the key challenges in aligning corporate sustainability goals with global supply chain operations?
Aligning corporate sustainability goals with global supply chains involves tackling complexity, regulatory divergence, and supplier engagement through Strategic Planning, Innovation, and Collaboration. [Read full explanation]
How is the rise of green finance influencing corporate sustainability strategies?
The rise of green finance is reshaping corporate sustainability strategies by emphasizing ESG integration, driving innovation in sustainable technologies, and pushing companies to align operations with sustainability goals for competitive advantage. [Read full explanation]
In what ways can sustainability efforts help in attracting and retaining top talent?
Sustainability Efforts Boost Talent Attraction and Retention by Aligning with Workforce Values, Enhancing Employer Brand, and Fostering Employee Engagement and Corporate Responsibility. [Read full explanation]
How can organizations navigate the regulatory landscape regarding sustainability reporting and compliance?
Organizations can navigate the sustainability reporting and compliance landscape through Strategic Planning, understanding regulatory environments, integrating sustainability into corporate strategy, and leveraging technology and data analytics for effective reporting and competitive advantage. [Read full explanation]
What role does blockchain technology play in enhancing transparency in sustainability practices?
Blockchain technology enhances Supply Chain Transparency, facilitates Carbon Footprint Tracking and Trading, and improves Stakeholder Engagement and Reporting, supporting organizations in achieving Sustainability Goals. [Read full explanation]
How is artificial intelligence being used to advance sustainability goals?
AI is revolutionizing sustainability across energy, agriculture, and water management by optimizing resource use, reducing waste, and lowering environmental footprints through predictive analytics and data-driven decisions. [Read full explanation]

Source: Executive Q&A: Sustainability Questions, Flevy Management Insights, 2024

Flevy is the world's largest knowledge base of best practices.

Leverage the Experience of Experts.

Find documents of the same caliber as those used by top-tier consulting firms, like McKinsey, BCG, Bain, Deloitte, Accenture.

Download Immediately and Use.

Our PowerPoint presentations, Excel workbooks, and Word documents are completely customizable, including rebrandable.

Save Time, Effort, and Money.

Save yourself and your employees countless hours. Use that time to work on more value-added and fulfilling activities.

Read Customer Testimonials

Download our FREE Organization, Change, & Culture, Templates

Download our free compilation of 50+ slides and templates on Organizational Design, Change Management, and Corporate Culture. Methodologies include ADKAR, Burke-Litwin Change Model, McKinsey 7-S, Competing Values Framework, etc.