The road to clean energy via digital decarbonization

The Baltics/Nordics-Asia Business Bulletin reports from a NordCham Indonesia (Nordic Chamber of Commerce) webinar called ‘The Road to Clean Energy with Digital Decarbonization’, held in 2020, put the spotlight on how the energy landscape and digitalization are evolving and merging closer as one.

With the energy systems facing a rapid and inevitable digital transformation towards clean electricity, technological advances must be utilised to support this.

‘Transition Faster Together’ is the name of a report series from Norwegian firm DNV (previously DNV GL) which identifies actions and solutions in how to accelerate the energy transition towards clean energy.

DNV delivers world-renowned testing, certification and advisory services to the energy value chain including renewables and energy management.

At least three fronts must be tackled simultaneously: adopt renewables at scale and at speed; invest in our power grids ensuring they are fit for the future; and boost the adoption of energy efficiency.

Mr Anurag Chatterjee, Regional Business Development Manager APAC, DNV presented the brand new report’s finding in terms of challenges as well as solutions, strategies and policies in renewables, power grids and energy management.

“The transition is still not fast enough in order to reach the 1.5 degrees upper limit for temperature rise,” said Anurag Chatterjee, while highlighting three key observations.

First; the energy industry is evolving dramatically. “Prior to Covid-19, which profoundly impacted all industries or companies, we saw the dominance of renewables, a huge penetration over the last decade and could see its dominance continuing for many years to come. In 2019 we predicted that the dominance would be such that by 2050 66 % of global energy production would come from renewable resources.”

“What’s unique about the three key findings is that the Covid-19 lockdowns and the restrictions on businesses activities have meant significant and rapid drops in demand for electricity, particularly in commercial production. In contrast the residential use increased slightly in areas where many are working from home. Hence, our modelling now shows that the pandemic will reduce the energy demand until 2050 by 8 per cent. This means that the resulting energy demand in 2050 will be almost exactly the same as it was in 2018,” he continued.

“Then there is the reliability: during Covid-19 renewables have demonstrated just that. For example in the U.K no coal electricity was generated for two months.”

“We want to change the forecast and the future global temperature rise. In order to do so we need to transition to clean energy – and do so much faster. We need extraordinary policies along with solutions across three vital areas of renewable energy,” continued Mr Chatterjee.

Three vital areas needed to be addressed simultaneously are:

• Adopt renewable at scale and at speed.
• Invest in our power grid to ensure they are fit for the future
• Boost the adoption of energy efficiency

“There is no silver bullet that applies to all. If I was to choose one area where we feel the focus should be it would be in the space of renewables. Because there has been a shift in the renewable energy sector: public awareness of climate change and the need to reduce the carbon emissions have grown – as is seen in many emerging markets and which is welcoming to see towards the transition.”

DNV has identified the top ten of measures that must be in place by 2030 in order to achieve the goal of transition faster.

1. Tenfold of growth in solar to 5 TW and 3 TW in Wind by 2030. By doing so only 50 per cent of the global electricity demands will be needed. Between 2015 and 2050 the Solar PV market will grow to 36% as a source of electricity generation and the wind market to 36% as well. “Like wind, the floating solar PV is rapidly growing in the municipality, especially in the Asia-Pacific. We do see a lot of tractions in the market when it comes to floating PV.”
2. Five-fold increase in the battery production by 2030, alongside investment in new technologies and storage.
3. Deployment of infrastructure for charging of electric vehicles on a large scale. “We are seeing emerging markets developing this kind of roadmap to have this kind of technology integrating with the grid.”
4. More than USD 1.5 trillion of annual investment will be required to achieve the set targets, most of being re-investment for the expansion of the power grid
5. Improvement in the global energy intensity by at least 3.5 per cent per unit of output is needed.
6. Scale-up of Hydrogen with green hydrogen to be used in the buildings, industries and fuel transport and for production from renewable energy in the power grid.
7. Increasing electrification in the manufacturing process – for heavy industry sectors. Onsite Renewable resources combined with storage solutions.
8. Start developing and improving technologies for heat pumps (with ventilation technology and improved insulation.)
9. Rail expansion both for passenger and cargo transport: “With growing amounts of green power and solar in remote areas it is very important that we focus on the expansion on the network, to reach the remote areas and to promote connectivity for both passengers and cargo.”
10. Rapid deployment of the CPS technology/Carbon Capture.

“In the coming years wind will be at the backbone of power generation in markets with strong offshore wind potential, such as U.K, Netherlands Denmark, and the U.S. and for the Asia Pacific it will be Vietnam, Taiwan, Japan and Korea. In Vietnam and Taiwan we see early developments, but in Japan and Korea the development sites are in place. Offshore wind is no longer restricted to fixed structures. Increasingly floating solutions play a bigger role. One of the floating benefits is that it provides flexibility to do reinstallation too.”

Commenting further on hydrogen Mr Chatterjee said: “All the markets we are working with in Asia Pacific have the same objectives, when it comes to hydrogen. First, to generate electricity, second, to accelerate the decarbonisation agenda and third is to provide a long-term range of storage solutions.” 

As for concerns about the safety of hydrogen he said DNV has been involved a lot internationally in that regard. There is for example an association for example on hydrogen safety where DNV, along with industry stakeholders, study the hydrogen safety aspect with best practices in the U.K and in Europe.

Finally the DNV representative also mentioned that a few business models have come up as part of the transition, one of them being the rise of the consumer. “To take advantage of innovation you also need consumers to respond to opportunities. By making energy use more tangible it’s no longer enough to just have corporate purchasers. This happens for example by giving the consumer the option and the encouragement to use renewable power.”

Here, Mr Chatterjee’s DNV colleague Mr Petter ?ke Mathisen, Veracity Director Energy, presented in further detail how digitalization is a necessary step for a sustainable energy transition.

“Decarbonisation and decentralisation are going to be very important elements of this energy transition. And digitalisation is going to be a key element of that,” he said.

What DNV means by that refers to:

• Electrification is critical to long-term carbon goals and will be a relevant distributed source. Key technologies are EVs, vehicle to grid/home, smart charging and heat pumps.
• Decentralization makes customers active elements of the system, though requires significant coordination.
• Key technologies: energy efficiency, solar PV, distributed storage, micro grids and demand response (a change in the power consumption of an electric utility customer to better match the demand for power with the supply).
• Digitalization allows for open, real-time, automated communication and operation of the system.
• Customers in the future energy system: Using grid edge technologies and services customers will produce, consume, store and sell electricity. Automated tech and analytics will influence customer consumption and contribute to new customer services.

Digitalisation involves all stakeholders: energy suppliers and aggregators; prosumers and consumers; distribution system operators; generators; transmission system operators; and policy makers and regulators.

Petter ?ke Mathisen then talked about business opportunities created by digitalisation, and changing business models with digitalisation.

“With decentralisation there will be a much tighter connection with the consumer; more decentralised production of energy in the system. This opens up opportunities for improved control systems, for example driven by data from censors across the entire energy system - from distribution, distributors and to end users, from the pumps and the machinery,” said Mr Mathisen.

“We believe that it is also opening up for a lot of opportunities for new technologies at the consumer’s end, being able to actually develop new technology based on data from the entire system but also from the consumer’s own consumption of an engine.”

“There is a lot of hype around digitalisation, but we also see it as a very important enabler for decarbonisation and decentralisation of the energy industry.”

“By just saying ‘digitization’ we mean that by taking an analogue process and turning it into something digital. But by digitalization we’re actually managing to create business opportunities and by digital transformation we mean that we actually change business models with digitalisation.”

More than just making existing data digital, digitalization embraces the ability of digital technology to collect data, establish trends and make better business decisions.

“And how can this happen by using digital technology? We already know for quite a long time about sensors, software, machine learning and tool. But what’s important for DNV is that in order to actually make business cases out of them it’s important that it happens in a certain way; having open digital platforms where digitalisation can happen quickly.”

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