Mar 30, 2017

How digital transformation is reshaping the energy industry

Technology
Energy Efficiency
Mark Homer
4 min
How digital transformation is reshaping the energy industry
Time seems to go faster as we get older, but it’s moving even faster in tech. A year in the digital age is more akin to dog years than human years...

Time seems to go faster as we get older, but it’s moving even faster in tech. A year in the digital age is more akin to dog years than human years. Case in point: back in 2013, GE economist Marco Annunziato delivered a TED talk discussing the significant improvements that can be made in the power industry and the resulting benefits. Improvements of a mere one percent in all of the world's industrial assets raises the potential of over $60bn in gains for the power industry, over a 15-year period. In 2013, very little was known about the internet of things (IoT) and its potential impact on industry. Not anymore. Now it’s redefining the way power plants and assets are monitored, serviced and managed. That’s tech (dog) years for you.

The disruptive changes of digital transformation are currently sweeping through the energy industry. Increased use of renewables, resiliency issues and sustainability concerns are just a few of the drivers behind the industry’s need to transform - and digitisation is the single biggest enabler of that change. The digital age has not only brought us a 'digital twin' version of the physical power plant that monitors every asset, but it’s also capable of providing an intelligent response with analytics that trigger the appropriate actions from a service and maintenance perspective.

As power companies become more agile at managing production and supply better, there will be improvements in both distribution and management, and of course end user consumption as a result. The ability to develop plans based on real time data analytics will be revolutionary.

Power companies will be able to explore new opportunities that could improve efficiencies further, using data analytics to model new tactics and solutions. Distributed generation for example, where companies can shift power production closer to the point of consumption through solar tiles or wind farms, all becomes possible because the technology is now intelligent enough to plan, service and manage even the remotest of assets.

While some power companies may think they are already doing this efficiently, just two percent of data is captured in the energy sector and what is captured is not done through automation. Increased automation, certainly the use of sensors on turbines, for example, could not just identify how to squeeze more power out of existing machinery, but also keep an eye on the performance and potential failure of equipment. It’s about making plants smart, capable of reacting to change more efficiently, in terms of cost and capacity.

This solves a whole host of problems for power companies, but field service and maintenance – traditionally one of the biggest cost overheads in keeping assets running – is one of the biggest areas of return. Understanding the performance of machinery at any point in time and being alerted to the potential failure of parts has significant advantages. Sensors can now monitor burners and generators in real time sending data back over a cloud-based IT system to a central data pool, from where data is analysed automatically by specialist software. Field service teams have intelligence at their fingertips, often knowing in advance which particular piece of machinery is likely to fail and which part is needed, reducing wasted time and costs and more importantly downtime.

According to the World Economic Forum, utilities are improving uptime and reducing overall maintenance costs by deploying predictive maintenance analytics. This, says the WEF, increases the 'quantity and quality of maintenance schedules'. It cites PPL Electric reporting a 38 percent improvement in service reliability through improved analytics.

For the power industry, digital transformation, combined with IoT connected field service offers both a short and long term solution to coping with varying regulatory and pricing demands of the market, and managing costs, uptime and service more predictably. Digital transformation has opened new windows of opportunity for those that embrace them. But in the same way innovation gets faster and the competitive gap gets wider with digital transformation, the lag time for those late to respond and catch-up gets slower, and market share gets narrower.

Mark Homer is Vice President Global Customer Transformation for ServiceMax, a GE Digital company.

 

Read the March 2017 edition of Energy Digital magazine

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Jul 29, 2021

Carbon dioxide removal revenues worth £2bn a year by 2030

Energy
technology
CCUS
Netzero
Dominic Ellis
4 min
Engineered greenhouse gas removals will become "a major new infrastructure sector" in the coming decades says the UK's National Infrastructure Commission

Carbon dioxide removal revenues could reach £2bn a year by 2030 in the UK with costs per megatonne totalling up to £400 million, according to the National Infrastructure Commission

Engineered greenhouse gas removals will become "a major new infrastructure sector" in the coming decades - although costs are uncertain given removal technologies are in their infancy - and revenues could match that of the UK’s water sector by 2050. The Commission’s analysis suggests engineered removals technologies need to have capacity to remove five to ten megatonnes of carbon dioxide no later than 2030, and between 40 and 100 megatonnes by 2050.

The Commission states technologies fit into two categories: extracting carbon dioxide directly out of the air; and bioenergy with carbon capture technology – processing biomass to recapture carbon dioxide absorbed as the fuel grew. In both cases, the captured CO2 is then stored permanently out of the atmosphere, typically under the seabed.

The report sets out how the engineered removal and storage of carbon dioxide offers the most realistic way to mitigate the final slice of emissions expected to remain by the 2040s from sources that don’t currently have a decarbonisation solution, like aviation and agriculture. 

It stresses that the potential of these technologies is “not an excuse to delay necessary action elsewhere” and cannot replace efforts to reduce emissions from sectors like road transport or power, where removals would be a more expensive alternative.  

The critical role these technologies will play in meeting climate targets means government must rapidly kick start the sector so that it becomes viable by the 2030s, according to the report, which was commissioned by government in November 2020. 

Early movement by the UK to develop the expertise and capacity in greenhouse gas removal technologies could create a comparative advantage, with the prospect of other countries needing to procure the knowledge and skills the UK develops.

The Commission recommends that government should support the development of this new sector in the short term with policies that drive delivery of these technologies and create demand through obligations on polluting industries, which will over time enable a competitive market to develop. Robust independent regulation must also be put in place from the start to help build public and investor confidence.

While the burden of these costs could be shared by different parts of industries required to pay for removals or in part shared with government, the report acknowledges that, over the longer term, the aim should be to have polluting sectors pay for removals they need to reach carbon targets.

Polluting industries are likely to pass a proportion of the costs onto consumers. While those with bigger household expenditures will pay more than those on lower incomes, the report underlines that government will need to identify ways of protecting vulnerable consumers and to decide where in relevant industry supply chains the costs should fall.

Chair of the National Infrastructure Commission, Sir John Armitt, said taking steps to clean our air is something we’re going to have to get used to, just as we already manage our wastewater and household refuse. 

"While engineered removals will not be everyone’s favourite device in the toolkit, they are there for the hardest jobs. And in the overall project of mitigating our impact on the planet for the sake of generations to come, we need every tool we can find," he said.

“But to get close to having the sector operating where and when we need it to, the government needs to get ahead of the game now. The adaptive approach to market building we recommend will create the best environment for emerging technologies to develop quickly and show their worth, avoiding the need for government to pick winners. We know from the dramatic fall in the cost of renewables that this approach works and we must apply the lessons learned to this novel, but necessary, technology.” 

The Intergovernmental Panel on Climate Change and International Energy Agency estimate a global capacity for engineered removals of 2,000 to 16,000 megatonnes of carbon dioxide each year by 2050 will be needed in order to meet global reduction targets. 

Yesterday Summit Carbon Solutions received "a strategic investment" from John Deere to advance a major CCUS project (click here). The project will accelerate decarbonisation efforts across the agriculture industry by enabling the production of low carbon ethanol, resulting in the production of more sustainable food, feed, and fuel. Summit Carbon Solutions has partnered with 31 biorefineries across the Midwest United States to capture and permanently sequester their CO2 emissions.  

Cory Reed, President, Agriculture & Turf Division of John Deere, said: "Carbon neutral ethanol would have a positive impact on the environment and bolster the long-term sustainability of the agriculture industry. The work Summit Carbon Solutions is doing will be critical in delivering on these goals."

McKinsey highlights a number of CCUS methods which can drive CO2 to net zero:

  • Today’s leader: Enhanced oil recovery Among CO2 uses by industry, enhanced oil recovery leads the field. It accounts for around 90 percent of all CO2 usage today
  • Cementing in CO2 for the ages New processes could lock up CO2 permanently in concrete, “storing” CO2 in buildings, sidewalks, or anywhere else concrete is used
  • Carbon neutral fuel for jets Technically, CO2 could be used to create virtually any type of fuel. Through a chemical reaction, CO2 captured from industry can be combined with hydrogen to create synthetic gasoline, jet fuel, and diesel
  • Capturing CO2 from ambient air - anywhere Direct air capture (DAC) could push CO2 emissions into negative territory in a big way
  • The biomass-energy cycle: CO2 neutral or even negative Bioenergy with carbon capture and storage relies on nature to remove CO2 from the atmosphere for use elsewhere

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