The sharp increase in fuel costs in 2022 was alarming for the whole of Europe, and energy security is back at the focus again for the first time since the 1970s. At that time, the question was how resource-poor countries could secure sufficient oil reserves. What does energy security mean today? The Covid-19 pandemic and Russia’s invasion of Ukraine have led to major disruptions to global energy and technology supply chains. Some experts say the concept must be fundamentally revised to protect the entire energy supply chain and infrastructure. There are a number of complex factors to consider.
More than ever, today’s energy systems need to withstand geopolitical developments, sudden changes in supply and demand trends, and all other conditions that affect energy markets. They must also cope with extreme weather events, which are becoming more frequent and more intense because of climate change. That is why it is becoming even more important in the energy sector to identify risks at an early stage and to be able to adapt flexibly to new conditions and circumstances. One thing is clear: the possibilities for greater energy security and energy resilience are there.
Battery energy storage is becoming increasingly important for an independent energy supply
Renewable energies play a central role here. On one hand, they make you geopolitically independent and, on the other hand, they do not pollute the environment. The disadvantage: solar and wind energy flows back into the grid if it is not used directly. It’s different with battery storage: they store regenerative energy, for example obtained from a solar system, and make it accessible again when it is urgently needed. With the further advancement of battery technologies, countries, cities and private households can better prepare for emergencies.
Households strengthening their energy resilience: number of storage systems doubled in 2022
Figures show that energy security and energy resilience have already become significantly more important for private individuals: In Germany alone, around 220,000 new energy storage systems for private households were installed in 2022 – more than twice as many as in 2021. By investing in these systems, consumers are becoming power generators themselves. This creates security. Because they know that they will still have electricity if the grid should ever fail. They can even sell energy back to the grid when demand is high.
In North America, even EVs with bi-directional charging have proven to be useful energy stores: during power outages caused by floods, storms or earthquakes, they provided their owners with energy so that they could power their homes for a few days until the emergency was over. Technological advances such as Virtual Power Plants (VPP), which use cloud computing to connect small generators and balance energy loads within a grid, may further increase energy security in the future.
The market for clean energy technologies is growing enormously
Fatih Birol, Executive Director of the International Energy Agency (IEA), also ventured a look into the future: “The world is set to add as much renewable power in the next five years as it did in the previous 20 years”, as he was recently quoted on the agency’s website. Birol added that such a movement “would benefit the whole world.” Renewables have become significantly cheaper, according to the IEA, and concerns about energy security should give them a massive boost through 2027.
The comprehensive IEA report “Energy Technology Perspectives 2023” shows that the global market for the most important mass-produced clean energy technologies will reach a value of around US$ 650 billion per year by 2030, more than triple the current value – when countries around the world fully implement their announced energy and climate commitments.
The major economies are already well on the way there: they are integrating their climate, energy security and industrial policies into broader strategies. Examples include the US Inflation Reduction Act, the Fit for 55 package, and the European Union’s REPowerEU plan. However, challenges still remain and the battery systems of the future will be a crucial part of the necessary solutions.
LG Energy Solution’s role in energy security
Armed with reliable systems that run on renewable energy, countries, communities, and households can significantly reduce their vulnerability to fuel supply disruptions. As a manufacturer and supplier of energy, LG Energy Solution will continue to play an important role in energy security and energy resilience, and provide various solutions to accelerate the energy transition, which in turn will sustain the world’s energy systems.