Investment totaling some $3.4trn is foreseen flowing into the global renewable energy build-out over the next ten years – 80% of which will go into wind and solar power projects, according to the latest calculations by Frost & Sullivan.

The analyst group sees 54.1% of installed capacity being made up of renewable plant, including hydropower, by 2030 and 37.9% will be a combination of solar and wind, spotlighting “falling costs and renewables-friendly energy policies adopted by several countries” in North America, Latin America, Europe, the Middle East, China and India as “prominent” reasons for the soaring spend expected.

“The power sector will witness strong growth in decentralisation during the decade, with annual global investment increasing from $53.1bn in 2019 to $92.5bn in 2030,” said Vasanth Krishnan, senior research analyst at F&S’ industrial unit and lead author of its Growth Opportunities from Decarbonisation in the Global Power Market report.

“Pressure will continue to build for further decarbonisation within the power system as the rate of adoption of digital technologies increases in both existing and future plants to boost operational performance.”

Frost & Sullivan estimates the worldwide energy transition will result in over $2.7trn in capital spending going into the wind and solar sectors by 2030, with 54.1% of installed capacity globally by then being accounted for by renewable energy plant, including hydropower.

“The surge in need for flexibility is the most significant trend observed across developed markets,” Krishnan said.

“System operators are coming under increasing pressure to manage the system with uncertain renewable output, declining coal output, and demand-side variability,” he continued, noting that as a result, technologies such as battery energy storage systems, gas engines, demand-side response, and virtual power plants would all witness “unprecedented adoption rates among utilities, solution providers, and end consumers”.

The 2020s would be “crucial for all the participants in the power industry” as the shift toward renewable energy increases momentum, while coal “takes a downturn in most developed markets”, said Krishnan.

Conventional power plant operators, he cautioned, would need to show “extreme physical and digital agility” to compete with renewables power in the longer term.

“In this regard, digital solutions will enable conventional thermal power plants to increase operational efficiency and asset utilisation to meet the present and future needs of a smart power grid.”