As renewables prepare to surpass coal and become the world’s largest source of electricity generation, the energy sector faces a critical question: are we ready to manage this new reality?
The global energy landscape is undergoing a fundamental transformation. Renewable electricity generation is expected to increase 60%, from 9,900 TWh in 2024 to 16,200 TWh by 2030, according to the International Energy Agency.
This unprecedented expansion represents more than impressive statistics. It signals a complete reimagining of how electrical grids must operate, balance, and monetize energy.
The Challenge of Variable Generation
Key challenge: Wind and solar energy production varies with weather and time, creating grid balancing issues that traditional power systems were never designed to handle.
The shift to renewable energy introduces a structural change that legacy power systems were never designed to manage. Unlike traditional power plants that can be turned on and off at will, wind and solar generation depends on weather conditions and time of day.
The share of variable renewable energy sources is set to almost double to 27% by 2030, creating new demands for how we balance and manage electricity grids.
The consequences of grids struggling to adapt are already evident. In 2024, Europe curtailed more than 10 TWh of renewable energy, deliberately reducing clean power output to prevent grid overload. This figure is projected to rise to 22 TWh by 2030 across Great Britain, Spain, and Italy alone. Germany illustrates the trend clearly: solar curtailment reached 1,389 GWh in 2024, a 97% year-on-year increase (Aurora Energy Research).
These aren’t just numbers. They represent wasted clean energy and billions in lost economic value. The cost of reducing renewable electricity output to keep grids stable reached €8.9 billion in 2024 across Europe.
The challenge extends beyond existing assets: more than 1,700 GW of renewable capacity is currently stuck in grid connection queues across Europe, more than three times what is required to meet EU 2030 climate targets. In the United States, the backlog exceeds 2,600 GW, more than double the total installed capacity of the national power fleet.
Grid connection timelines have increased 70% over the past decade, with project withdrawal rates approaching 80% as developers face escalating and often prohibitive costs.
Why Grid Infrastructure Must Evolve
Infrastructure gap: Electricity grids require massive upgrades to handle distributed renewable generation, with €1.2 trillion in investments needed in Europe alone by 2040.
Much of Europe’s electricity infrastructure was built decades ago for centralized, unidirectional power flows. Today, those same networks must manage distributed renewable generation flowing in multiple directions across thousands of connection points.
Research by the European Commission warns that without decisive action, operational interventions to manage congestion could increase almost six-fold by 2040. As a result, up to 310 TWh of renewable energy could be curtailed annually due to grid constraints. This is equivalent to half of all wind and solar generation in the EU in 2022.
Meeting this challenge requires unprecedented investment. Analysts estimate that €1.2 trillion will be needed by 2040 to modernize European electricity networks.
At a global level, transmission infrastructure is now recognized as a fundamental bottleneck for the energy transition, with more than 80 million kilometers of grid infrastructure needing to be added or refurbished by 2040. This is effectively equivalent to rebuilding the entire global grid.
Infrastructure expansion alone, however, is not sufficient. Without smarter coordination and real-time control, larger grids risk becoming more complex, congested, and fragile.
Energy Storage: From Optional to Essential
Market growth: Global energy storage deployments grew 53% in 2024, as storage transitions from supplementary technology to critical grid infrastructure.
As grids adapt to variable renewables, energy storage has evolved from an optional add-on to a core system asset. Market data reflects this shift: global storage deployments grew 53% in 2024, while utility-scale storage increased 27% year-on-year in Q3 2025, reaching 4.6 GW and 13.6 GWh.
Globally, annual energy storage deployment (excluding pumped hydropower plants) was set to hit another all-time high at 92 gigawatts (247 gigawatt-hours) in 2025 – 23% higher than in 2024. China accounts for over 50% of the annual build in gigawatts, followed by the US at 14%. Energy storage additions in these two markets remain strong for now although recent policy changes slow new solar and wind in both markets (BloombergNEF).
Beyond traditional grid applications, storage is increasingly deployed in data centers and industrial facilities, driven by AI workloads and electrification. This expansion confirms storage’s role as a foundational grid resource rather than a niche technology.
New Opportunities in a Transformed Market
Market dynamics: Despite growing complexity, 91% of new renewable projects in 2024 were cheaper than fossil alternatives, enabled by improved forecasting and smarter operations (Renewable Power Generation Costs in 2024, IRENA).
While renewable producers face increasing operational challenges, they also encounter unprecedented opportunities when equipped with advanced management capabilities.
Electricity markets are becoming more volatile. In 2025, negative price hours surged across Europe, with Spain, Germany, and the Netherlands each recording over 500 hours of negative pricing. In such environments, profitability depends on real-time optimization, accurate forecasting, and fast operational response.
The economic case for renewables remains strong. 91% of new renewable projects commissioned in 2024 were more cost-effective than fossil fuel alternatives, avoiding approximately $57 billion in fuel costs. Capturing this value, however, requires navigating increasingly complex market conditions.
Technology is closing the gap: wind forecast accuracy improved from 72% to 96% between 2010 and 2023, while solar forecasting rose from 68% to 94%. Combined with automated control and real-time optimization, these advances reduce imbalance costs and unlock new revenue streams.
Success increasingly depends on hybrid and diversified portfolios, where generation is combined with co-located storage. Managing these systems requires energy management platforms capable of coordinating multiple assets, market signals, and grid constraints simultaneously.
Embracing the Digital Energy Future
The solution: Digital transformation through advanced renewable energy management platforms that integrate monitoring, analytics, and automated control.
The age of electricity demands more than incremental improvement. It requires a fundamental shift in how renewable assets are managed and optimized within increasingly complex power systems.
Digital energy management platforms integrate real-time monitoring, predictive analytics, automated control, and portfolio optimization into a single operational layer. They transform fragmented assets into coordinated systems capable of responding intelligently to grid conditions, market volatility, and regulatory requirements.
For renewable energy producers, the question is no longer whether to adopt digital management, but how quickly advanced capabilities can be deployed. As system complexity grows, the performance gap between digitally enabled leaders and those relying on legacy approaches will widen.
BaxEnergy delivers comprehensive Renewable Energy Management Solutions designed for this new reality. We enable renewable energy companies to optimize diverse portfolios, forecast generation accurately, automate operations, manage storage, ensure grid compliance and cybersecurity compliance, and maximize performance across complex markets and grid conditions.
The age of electricity has arrived.
The complexity is real, but so are the solutions.
The future belongs to those ready to embrace it.
About BaxEnergy
BaxEnergy, a Yokogawa company, is a global full-service partner of energy companies and industrial operators providing advanced end-to-end solutions for asset performance management, grid control, and cybersecurity. BaxEnergy’s solutions are able to optimize the operations of utilities and IPPs who manage cross-technology and cross-manufacturer portfolios, including wind, solar, hydro, geothermal, combined cycle, BESS and green hydrogen. The company currently monitors and manages more than 140 GW of renewable energy in 50+ countries. Learn more here: www.baxenergy.com