Digitalization of the Energy Sector

 Digitalization of the Energy Sector

Digital technologies

Digital technologies are everywhere, affecting the way we live, work, travel and play. Digitalization is helping improve the safety, productivity, accessibility and sustainability of energy systems around the world. But it is also raising new security and privacy risks, while disrupting markets, businesses and workers.

From the rise of connected devices at home, to automated industrial production processes and smart mobility, digital technologies are increasingly changing how, where and when energy is consumed.

More than 1 billion households and 11 billion smart appliances could participate in interconnected electricity systems by 2040, thanks to smart meters and connected devices. This would allow homes to alter when and how much they draw electricity from the grid. Demand-side responses – in building, industry and transport – could provide 185 GW of flexibility and avoid USD 270 billion of investment in new electricity infrastructure.

As the technological transformation from analogue to digital advances, digital technologies will make energy systems more connected, intelligent, efficient, reliable and sustainable over the coming decades. Some of the technologies that can innovate the way we use energy and help find solutions to decarbonise our energy systems are

•         Information and communication technologies (ICT)
•          Modern sensors
•         Big data and artificial intelligence
•         The internet of things (IoT)

Massive amounts of data, ubiquitous connectivity, and rapid progress in Artificial Intelligence and machine learning are enabling new applications and business models across the energy system, from autonomous cars and shared mobility to 3D printing and connected appliances.

The same transformation is taking place in how energy is produced – from smart oil fields to interconnected grids, and increasingly, renewable power. Digital technologies could help integrate higher shares of variable renewables into the grid by better matching energy demand to solar and wind supplies. Energy supply sectors also stand to gain from greater productivity and efficiency, as well as improved safety for workers.

In parallel with these opportunities, digitalization is raising new security and privacy risks, as well as disrupting markets, businesses and employment. While the growth of the “Internet of Things” could herald significant benefits in terms of energy efficiency to households and industries, it also increases the range of energy targets for cyber-attacks. Such attacks have had limited impact so far, but they are also becoming cheaper and easier to organize.

 

‘Digitization’ versus ‘Digitalization’:

Before delving into technicalities of digital innovations and its applications, it is important to differentiate between ‘digitization’ and ‘digitalization’ and why both are crucial to a sustainable energy future.

‘Digitization’ refers to the process of converting physical or analogue information into a systematic digital format that can be stored as well as processed for future productivity gains.

On the other hand, the term ‘digitalization’ (also referred to as digital transformation) refers to the actual process of leveraging digitization to make new or improved business or policy decisions for advancing the overall productivity, cost, safety, and sustainability. Digitalization provides the necessary infrastructure and interfaces to act intelligently and efficiently between operations and operators

 

Digitalization: A new era in energy?

Over the coming decades, digital technologies are set to make energy systems around the world more connected, intelligent, efficient, reliable and sustainable. Stunning advances in data, analytics and connectivity are enabling a range of new digital applications such as smart appliances, shared mobility, and 3D printing. Digitalized energy systems in the future may be able to identify who needs energy and deliver it at the right time, in the right place and at the lowest cost. But getting everything right will not be easy.

Digitalization is already improving the safety, productivity, accessibility and sustainability of energy systems. But digitalization is also raising new security and privacy risks. It is also changing markets, businesses and employment. New business models are emerging, while some century-old models may be on their way out.

Policy makers, business executives and other stakeholders increasingly face new and complex decisions, often with incomplete or imperfect information. Adding to this challenge is the extremely dynamic nature of energy systems, which are often built on large, long-lived physical infrastructure and assets.

 

Evolution of digitalisation in the energy sector

The energy sector is now in a profound transition towards a very important energy transformation, and digitalisation is one of the key facilitators to ensure that it is fulfilled. Years ago, companies started by switching the use of analogue meters to digital meters, smart meters etc., to improve energy efficiency.

Digital technologies have so far been used to improve the energy management process, but that’s when they start using them to change the way energy is generated and distributed.

Digitalisation acts as a lever in the sector to combat climate change and optimise power generation processes to reduce emissions and meet the objective of decarbonisation of the energy model.

 

Significance of Digitalization in carbon emission reduction

Digital technologies and digitalization help reduce carbon emissions by:

•  Improving energy efficiency
• Optimizing energy management
• Coordinating supply and demand in an increasingly decentralized electricity distribution  network
• Improving operational process efficiency across industry sectors

Moreover, digital technologies will be essential for the management of carbon capture and storage (CCS) and the conversion of fossil fuel-based transportation towards electrified and automated transportation.

The specific drivers for different aspects of the energy transition are diverse in nature and the use of digital technologies and the digital transformation will therefore vary. The generic imperatives are – trusted data, digital workflows and IT/OT connectedness to ensure flexible, digital-assisted or automated decision-making and coordination of activities.

 

Digitalization: critical for operational and commercial success

By means of monitoring, exception-based surveillance, predictive analytics, (un)supervised machine learning and AI-assisted decision-making digital technologies will be essential for the energy transition. It will become central for:

• Energy management: Monitoring and optimizing energy usage based on demand, time-of-day, weather, usage patterns, peak demand, demand fluctuations, etc.
• Energy mix optimization: Optimizing energy mix based on pre-defined targets and demand/supply patterns and switching accordingly between electricity from source-specific power supplies. Digitally enabled demand forecasting and supply planning for coordinating supply and energy storage and discharging in a decentralized renewable-based power system will be a huge help in this.
• Smart grids: AI-assisted operation of grids, predictive maintenance, exception-based surveillance, remote control, automated electricity trading and transactions, etc. will be core features of the future smart grids.
• Smart building and installations: Use of mobility sensors, electricity usage patterns, peak demands, time-of-day algorithms to optimize energy spending and savings, etc. will lead to improve energy efficiency and usage. Digitalization will be a key driver in making a range of technologies, processes and transportation more energy efficient.
• Smart metering: Devices recording information on consumption of electric energy to be shared with suppliers and prosumers for monitoring, to inform about demand and as basis for billing and electricity transactions.
• Smart energy storage: Autonomous charging and discharging of batteries linked to renewables power installations/plants for energy management and energy mix optimization.
• EV and smart transportation: Prediction of transportation patterns and peak demand as well as App-and IoT-based supply/demand balancing from communication between transport vehicles and suppliers/grid/EV power stations will lead to an operation and energy efficient electricity-based transportation system.
• Automation and RPA in all sectors: Digital-enabled automation processes, transport and operations will lead to energy (and cost) saving and energy efficient solutions. This could be e.g. in the O&G, manufacturing, chemical, mining and transport sector.
• Transactions and cybersecurity: Digital technologies such as Block-chain will be important to ensure regulatory compliance, data privacy and cybersecurity in the new decentralized network of energy trading among several entities, including private and industrial prosumers and utilities.

 

Digitized CCS operations in O&G

Digital technologies will be important for carbon capture and storage (CCS) operations including planning, process automation, predictive maintenance, flow surveillance (anomaly detection) and control systems for operational efficiency, safety and profitability. For example, digital twin representation of installations and the associated power system and grid as well as monitoring of flow of liquidified CO2 in pipelines using exception-based surveillance (e.g., leak detection, pressure/temperature tracking) can be used to ensure operational efficiency, reliability and transparency. Moreover, digital solutions can also be applied to do computer-assisted CO2 injection modelling and potentially link it to CO2-based enhanced oil recovery (EOR) operations, including complex thermodynamic equations (PVT and MMP CO2 phase physics) and dynamic flow simulations.

CCS operations will involve different entities along the value chain and hence communication and logistics planning are key which can be done using digital technologies. At these interfaces digital technologies can also ease transactional aspects of CCS (cashflow, CO2 volume exchange etc.) along the value chain. Finally, graphical services can be used to broadcast operational, financial and environmental KPIs and time series hereof linked to the CCS operation.

It is foreseeable, a cloud system architecture with IT/OT interfaces to integrate different data sources (including sensor data) and to facilitate descriptive and predictive analytics based on machine learning and AI will be essential for the CCS operation.

 

Main problems of the renewable energy sector

Although over the past decade, renewable energy has accelerated at a frenetic pace, overall energy consumption remains dominated by fossil fuels. Some of the most relevant impediments faced by companies in the sector are:

• ·Geographically dispersed energy data: the opportunity for this to be exploited in a meaningful way is lost.
• ·Lack of integrated platform prevents industry players from making informed decisions, leaving data isolated and unverified in the marketplace.
• ·Inability to track assets: from historical patterns to supply and demand trends, tracking is necessary to optimise supply of clean energy.
• ·Lack of clear and traceable objectives: the absence of a roadmap towards the adoption of new technologies and an action plan prevent progress towards energy efficiency.

 

Benefits of digital transformation in the renewable energy sector

Digitalisation, if carried out within a studied plan and guided by an integrated operations platform, facilitates the integration of renewable energies, energy policies and transparency in the management of these. In addition, it allows to have the user much more connected, offering the following benefits:

• Digitalisation tools and platforms help build renewable energy plants with automated processes, for informed decision making. In addition, the interconnections they propose are the basis for a more decentralised generation, thus avoiding isolated ‘energy islands’.
• These platforms reduce downtime by offering alerts based on predictive maintenance, anticipating asset maintenance. The modernisation of production plants is necessary to make them more competitive and efficient.
• They allow a more accurate forecast of the weather and market conditions, which helps to maximise renewable production, by offering a deep analysis of all information received in real time, to be able to make decisions and offer stability in demand.
• ·The use of artificial intelligence and machine learning to optimise the engineering and construction of new renewable sources and plants reduces time to market, anticipating the benefits of free C02 generation and increasing production.

 

Sources:

Digitalization set to transform global energy system with profound implications for all energy actors - News - IEA

Digitalisation of the energy sector | Energy (europa.eu)

Digital Transformation in the Renewable Energy sector (nexusintegra.io)

Digitalization as a key Enabler for the Energy Transition (capgemini.com)