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In part two of the Energy Transition Talks discussion between Eurelectric’s Head of Energy Policy, Climate and Sustainability Paul Wilczek and CGI expert Peter Warren, they turn their focus to the opportunities and challenges of localized energy production, the role AI and new technologies play in balancing decentralized power grids and the long-term benefits of decarbonizing and electrifying the energy sector.

The renewable energy surge in Europe

Localized energy production and renewable energy is increasing, as energy and security of fossil fuels coming from more volatile regions face increased disruption and costs. Referencing various studies, projections and European Commission publications, Paul indicates that the deployment of renewable energy sources—particularly solar photovoltaic (PV) and onshore/offshore wind power—is expected to experience a massive surge in Europe across all scenarios.

As Paul explains, this rapid growth in localized renewable energy production offers several advantages:

· Homegrown electricity production: Europe will have a significant portion of its electricity generated domestically, reducing dependence on imports from potentially unreliable foreign partners, thereby enhancing energy security and supply reliability.

· Decarbonization: Renewable energy sources like solar and wind are carbon-free, contributing to the decarbonization of Europe's electricity sector.

· Price predictability: Domestically produced renewable energy can provide more predictable and stable power prices, reducing volatility associated with imported energy sources.

At the same time, he points out, the projected surge in renewable energy deployment presents challenges too: such rapid growth also necessitates addressing the challenges of variability and the need for substantial investments.

The role of AI and new technologies in managing the energy system efficiently

While traditional energy generation like hydroelectric power will continue to play a role, Peter says, the major shift towards renewable but volatile sources like wind and solar impacts not just the volume of energy produced, but also the frequency and grid balancing when the sun shines or wind blows. New technologies, he suggests, will play a supporting role in transitioning to distributed energy resources (DER) production.

Paul agrees, suggesting that a decade ago, few predicted the current dominance of wind and solar energy. Technologies like biomass and geothermal were expected to have a bigger role. However, the plummeting costs of wind and solar have made them the clear winners for now.

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