Over the next 10-15 years, the growing adoption of electric vehicles, the electrification of heating systems, and the proliferation of distributed energy resources (DERs) like wind turbines and solar panels will require a delicate balancing act to match supply with demand without collapsing the grid. A similar scenario is playing out in many other parts of the world as businesses, government and residential consumers increasingly produce their own energy through solar panels, storing that energy in batteries and electric vehicles, or feeding it back to the grid. According to our forecasts (see figure below), approximately 36 million assets such as solar panels, electric vehicles and energy storage will be added to the grid in Europe in 2025, and 89 million by 2030. Soon, they will no longer be the sole source of energy, but will be needed to maintain a balanced grid, shifting electrons from disparate sources and storage systems to seamlessly deliver energy where it is needed second-by-second. With the help of AI software, decentralized energy sources can send any excess electricity they produce to the grid, while utilities direct that power to where it's needed.

All this means that utilities, policy makers and regulatory bodies need to start thinking about what role they want to play when it comes to decentralized energy resources. The patchwork of distributed energy producers will depend on coordination and management. Utilities can take the lead here as they face a shrinking pool of customers purchasing electricity as more homes and businesses become energy producers themselves – thanks to rooftop solar panels and the like. Already, the size of a median power plant in Europe has fallen from 800 megawatts in 2012 to 562 megawatts in 2020, and BloombergNEF projects this will plummet to 32 megawatts by 2050.