Rising energy costs, unreliable power grids, and climate change continue to exacerbate the global energy crisis and its impact on both businesses and households.

To be sure, electricity access has been improving, the cost of solar energy has dropped by over 80% since 2010, and renewable energy installations have consistently outpaced fossil fuel developments. But even with all that progress, projections signal a rough road ahead for energy usage around the world—one that will continue to impact families struggling to pay bills, industries facing operational disruptions, and economies hindered by resource instability.

One major contributor to the calamity: the world’s reliance on centralized energy grids. Although centralized grids are pivotal to the generation and distribution of energy across many major cities of the world, a lot of these grids are getting old and outdated, overburdened, and ill-equipped to handle the demands of modern economies.

Fortunately, decentralized grids are emerging to help solve that problem. “The rise of decentralized energy solutions, like microgrids, is a direct response to the limitations of traditional grids,” Gil Kroyzer, CEO of Solargik, tells Fast Company. “Unlike centralized systems, decentralized solutions bring energy production closer to the end consumer, improving reliability and reducing infrastructure stress.”

Another major factor contributing to the global energy crisis is the boom in AI, which is driving more energy demands in data centers and straining already aging energy grids. According to Andreas Schierenbeck, CEO at Hitachi Energy, “data center loads are evolving from a few megawatts to capacities exceeding 1 gigawatt due to the rise of energy-intensive AI applications.”

For context, the training process for an AI model like GPT-3 consumed roughly the amount of energy consumed by 120 American households over the course of a year, per a report by Harvard Magazine. In fact, one study projects that by 2027, the AI industry could consume as much energy as the Netherlands, a country with a population of almost 20 million people.

Then there’s also what’s called the “problem of intermittency” with renewable energy sources. While wind and solar offer clean and somewhat cheap sources of energy, they’re largely dependent on weather conditions. Without sufficient energy storage solutions, excess power cannot be efficiently stored for later use, leading to wasted capacity and gaps in supply during peak demand. The Global Energy Alliance for People and Planet (GEAPP) points out that affordable and scalable battery energy storage systems (BESS)—which helps to store energy at scale—are critical to solving this problem.

A series of hurdles

Companies like EVLO are stepping up to help address this issue with its large scale BESS solutions. “Energy storage solutions are the perfect match to leverage intermittent renewable energy sources like solar and wind,” says Sonia St-Arnaud, president and CEO at EVLO.

Our overdependence on fossil fuels presents an arguably more critical hurdle. Despite increasing investments in renewable and clean energy, fossil fuels still account for over 80% of global energy production, according to the United Nations. Coal, oil, and natural gas remain dominant sources, particularly in developing nations where infrastructure for renewables is still limited.

Rising geopolitical tensions—like the Russia-Ukraine war—further reflect why fossil fuel-overdependence is a big problem. Europe, which relied heavily on Russian gas, experienced an energy crisis in 2022, as Russia cut gas supplies to many parts of the region, leading to severe price hikes in some parts of the continent, per Reuters. Such disruptions highlight the fragility of fossil-dependent systems.

THE RACE FOR CLEAN ENERGY

Amid the energy turmoil and arduous race for net zero by 2050, there are renewable energy solutions offering real value to the everyday person and businesses today. Companies like Solargik, Hitachi Energy, and CheckSammy are all creating scalable and efficient systems that not only provide clean energy but also address challenges of cost and infrastructure.

For example, Solargik’s AI-powered solar tracking solution is improving the cost-effectiveness of solar systems. “By integrating real-time weather analytics and 3D shading plans, we optimize solar panel positioning and maximize energy yields even on irregular terrains or in challenging environments,” says Solargik CEO Kroyzer. These innovations ensure solar projects can thrive in irregular terrains or low-resource areas, making renewable energy more viable globally.

Hitachi Energy, meanwhile, is advancing grid stability with technologies like BESS and hydrogen-powered backups. Currently, Hitachi Energy is powering the world’s largest data center heat recovery project, recycling excess heat to replace fossil fuels with emission-free energy. “To support the sharp surge in energy demands, power grids with higher capacities are essential, especially if we aim to make renewable energy our main electricity source,” says Schierenbeck.

On the waste and sustainability side, CheckSammy—the world’s largest bulk waste and sustainability provider—is leveraging data-driven waste diversion and recycling solutions to help businesses cut costs while reducing environmental footprints.

Agrivoltaics—which combines solar energy generation with agricultural land use—is another exciting development. Solargik’s agrivoltaic systems, for example, integrate clean energy production with agriculture, enabling farmers to protect crops from extreme heat, increasing their agricultural yields. This dual-use approach enhances both energy and food security, making it a compelling solution for sustainable land use.

CHALLENGES WITH ENERGY TRANSITION

While renewable energy offers a promising solution to the energy crisis, many challenges hinder widespread adoption and scalability. One of the most significant hurdles is the high upfront cost of renewable energy systems. For emerging markets, where energy infrastructure is often underdeveloped, the expense of installing solar panels, upgrading grids, and building storage systems can be daunting. It’s almost like these markets exist in a paradoxical world where, even though renewable energy is vital for energy access and sustainability, the costs remain a major barrier to adoption.

Another major hurdle is sustainable land use, says Kroyzer. “Across the world, we’re seeing less and less ‘ideal’ land for PV development available. By unlocking land previously thought of as too challenging to build upon and expanding to dual-use applications, we can make the deployment of solar PV systems more cost-effective across all markets; while also minimizing impact on the land itself,” he adds.

Then there is the limitation of traditional power grids. Most centralized grids were built decades ago and are ill-suited to handle intermittent renewable energy sources like solar and wind. Upgrades to integrate these sources, decentralize production, and ensure grid resilience require substantial investments in both time and capital. Renewable energy production also fluctuates with weather patterns and daylight hours, making scalable battery storage essential to ensure consistent supply.

Furthermore, inconsistent regulatory frameworks often slow down the transition. Renewable energy adoption requires clear policies, strong incentives, and collaboration between public and private sectors. Without these, progress stagnates, especially in countries still heavily reliant on fossil fuels.

LOOKING AHEAD

The quest for renewable energy, as Schierenbeck notes, isn’t merely a trendy option but a critical necessity to address the energy crisis and global warming effectively. He adds, however, that without significant development of power grids, it will be impossible to ramp up the production of renewable energy.

As renewable energy sources continue to grow more popular, there’s the need for greater grid infrastructure enhancements and more advanced energy storage systems. Perhaps if more investments go into building these systems that can actually support energy from renewable sources, global energy prices can truly go low and net zero—which some now say is no longer possible in 2050—can be achieved.

Meanwhile, according to EVLO’s St-Arnaud, utilities and independent power producers now recognize battery energy storage as a highly versatile energy asset for enhancing the grid and improving its resiliency, optimizing peak load management to handle increased power demands, while integrating renewable energy sources where needed.

The rise of lithium iron phosphate battery chemistry is also reshaping the economics of energy storage, driven by its safety profile and declining costs, he adds. “With a 20% drop in prices in 2024, following a 30% reduction in 2023, the market is benefiting from improved affordability, which is likely to persist through 2028.”

For Kroyzer, the future of renewable energy isn’t just about cutting emissions; it’s about building systems that are resilient, predictable, and financially viable. ”With the momentum and collaborations we’re seeing today, we’re not just fixing the energy crisis,” he says, “we’re unlocking a massive economic opportunity that is fueled by clean, smart, and future-ready solutions.”