Powering the Future: Navigating Energy Transition Challenges and Supply Chain Innovations

The transition to renewable energy is one of the most critical undertakings of the 21st century, driven by the urgent need for cleaner, more sustainable energy sources.

Global electricity generation increased by 2.5% in 2023, reaching a record level of 29,925 terawatt-hour. This demand continues in 2024, with growth expected at around 4%, driven by increasing renewable energy adoption.

And as this demand skyrockets, utilities are facing complex challenges in balancing renewable adoption with the realities of supply chain disruptions and regulatory hurdles. This delicate balance was the focus of GEP INNOVATE 2024, where industry experts Ben Ford from Ameren, Peter Poggi from Tennessee Valley Authority and Colleen Zupan from GEP explored these pressing issues.

This blog looks at some of the key highlights of this power-packed session:

Natural Gas as a Critical Bridge in the Energy Transition

Natural gas is proving to be a pivotal element in the journey toward renewable energy. While renewables like solar and wind are essential, gas provides the stability necessary to bridge the gap during this transition. Peter Poggi noted that, despite the focus on renewable energy, gas has "been one of the biggest revolutions," helping the U.S. reduce its carbon footprint by replacing coal plants with gas. He cited Germany's attempt to move directly from coal to solar, which ultimately forced them to reopen coal plants when they couldn’t meet energy demands — underscoring the importance of gas as a reliable, low-carbon bridge. 

“When we talk about the energy transition, we automatically seem to go to renewables. But the importance of gas (is) in making this bridge. And in fact, if you look at the biggest revolution we've had in energy, it really has been fracking in oil and gas and it's given the United States an extraordinary advantage in terms of low-cost energy base and renewables,” Poggi said.

Ben Ford echoed this sentiment, explaining that “no one technology is currently taking the lead,” highlighting the need for a balanced portfolio that includes not only renewables but also gas and nuclear to maintain energy security during the transition.

Supply Chain Disruptions Post-COVID

The energy transition is further complicated by supply chain disruptions that have only intensified since the COVID-19 pandemic. Lead times for key components like transformers and gas turbines have stretched to as long as four years, making it difficult for energy projects to stay on track.

“These projects present similar risks for supply chains as COVID did, just in a different context,” Ford explained, highlighting how utilities must navigate a challenging procurement landscape.

Both Ford and Poggi emphasized that utilities became complacent pre-COVID when supply chains were stable. Now, faced with rising demand and population migration, recalibrating supply chains and planning for long lead times have become top priorities.

“And things change not only with the supply chain. If you look at the utilities’ integrated resource plans of power demand, they were flat up until COVID. Then it changed. And everyone talks about the data centers, but there's a couple of other probably even more important driving factors. One is that our energy efficiency efforts are flattening out. Everyone’s already replaced their lightbulbs with LEDs. Another is working from home and population migration trends,” said Poggi.

AI and Workforce Adaptation: The Role of Technology

Technological innovation, particularly in AI, is transforming both energy management and supply chain optimization. AI-driven tools are enabling more accurate forecasting, better project management, and streamlined operations. However, this innovation also demands a workforce capable of adapting to these rapid changes.

As Ford pointed out, “There is a push to standardize processes, but in a fast-moving environment, the ability to problem-solve is more critical than ever.” Balancing between process efficiency and dynamic problem-solving is becoming a key factor in successfully managing the energy transition.

Looking Forward: The Road Ahead

With energy demand growing more in the last five years than in the previous five decades, Ford, Poggi and Zupan all agreed that the challenges faced by the energy sector are significant but surmountable. A balanced energy portfolio, continued reliance on gas as a transitional fuel, and robust supply chain strategies will be essential in ensuring a smooth transition to renewables. In addition, transmission interconnections are fast becoming a bottleneck for renewable generation deployment. 

As Ford remarked, “These new technologies don’t come for free.” The path forward will require collaboration across industries, thoughtful regulatory frameworks, and continual investment in technological and workforce development to meet the demands of a rapidly changing world.

Watch the GEP INNOVATE 2024 session Powering the Future — Navigating Energy Transition.