Powering our future – digital disruption in the energy industry
To explore the diffusion of disruptive ideas, robotics and blockchain within the energy sector, Energy Digital interviewed representatives of some of the industry leaders in each of these sub-sectors.
Digital disruption has transcended our culture to a level nothing short of ubiquitous. Integration is becoming standardised across our information management technologies, acting as a herald for changes to our industries as a whole. Transitions within the energy industry always challenge conventional views and entrenched modes of operation, presenting both the opportunity to evolve whilst trying to simultaneously manage the environmental implications of widespread decommissioning and even the failure of previous technologies to attain the projected levels of return on investment.
How is the industry shaking hands with emergent technologies? To explore the diffusion of disruptive ideas, robotics and blockchain within the energy sector, we interviewed representatives of some of the industry leaders in each of these sub-sectors, providing an intriguing picture of both the pathways and obstacles that could shape its journey over the coming decade.
A holistic view – Tim Shire, KBC
Increasingly software is now playing a leading role in technological developments, surpassing the impact hardware and new physical evolutions played out across industries on a holistic scale. One leader in this sector is KBC Advanced Technologies. They have supported the energy and chemical industries since 1979 across 23 global locations. We approached Tim Shire, VP New Solution Strategy and Launch to gain an understanding of the complex relationship between digital disruption and this sector’s requirements.
How do you believe digital products and technologies have shaped the energy industry over the previous five years? What has been the most significant application of tech in your opinion?
Digitalisation is starting to make inroads into the energy industry in many ways. Technologies like big data, the cloud, IoT and artificial intelligence are not just changing the business, but also re-writing the job description of the next generation of engineers.
Of all these technologies, the cloud has seen the most widespread adoption in the upstream oil and gas industry due to the large number of asset owners and operators who need to collaborate in complex fields. The resulting connectivity is really changing the way business is done, and enabling operators to do more with less, even in remote locations, with few frontline staff.
Big data analytics is perceived by the industry to be the most valuable application of technology, however in practice we see that analytics has been limited to pockets of success and has not yet met its full potential.
What has been the wider impact to the environment of digital implementation within the energy industry? How is the sector working to remove outdated and environmentally detrimental processes?
There is huge potential for digitalisation to ease the industry’s impact on the environment, but the realisation of that potential has so far been limited. However, we are now seeing significant C-Suite commitment to reducing carbon emissions – from Shell and Chevron for example – so we expect to see a wave of digital adoption.
We’ve found that digital solutions offer a much higher ROI than physical hardware in terms of carbon savings. By having the right digital strategy in place, a 3-10% saving on energy and carbon emissions is possible with a payback time of less than a year.
How is KBC garnering current and emergent technologies right now to make an impact into the way that energy is both generated and consumed on either local or global stages?
KBC very much sees combining an ensemble of current and emergent technologies, along with human expertise, as considerably more effective than trying to replace current technologies or people with new technology.
In the field of energy and sustainability, KBC has developed a fully comprehensive suite of energy management software and analytics, simultaneously covering both energy supply optimisation and energy demand minimisation. However, class leading tools need to be well maintained and require a level of expertise to fully exploit.
Consequently, we have started leveraging the cloud to deliver our Energy and Sustainability Co-Pilot service. Streaming data to the cloud enables us to remotely assure the performance of the tools and provide proactive support and capability transfer from our expert consultants, in order to relentlessly improve all aspects of energy and carbon management.
Automation in the nuclear industry – Manon Higgins-Bos, National Nuclear Industry
Nuclear power has played an increasing role in the generation of energy in the West. In the UK the National Nuclear Laboratory occupies an instrumental role in helping the country’s industry deal with decommissioning and waste. We approached Manon Higgins-Bos, Strategic Development Manager, to discuss how automation is starting to inform serious change.
What do you believe are the greatest challenges to digital implementation in the energy industry? How can we work to overcome these barriers?
The energy industry hasn’t always been at the forefront of digital implementation – we can learn from industries such as automotive and engineering. Working collaboratively is one area that is challenging, but also a huge opportunity. Energy projects often involve many different parties and even though the intention to share knowledge is always there, it doesn’t always happen. This can be a particularly true in the nuclear sector, where a plant’s lifetime is more than a century, spanning several generations of employees. A key aspect is the decision-making process and looking at what point in the journey the plan to collaborate starts.
For example, at NNL, we may work on a decommissioning programme where we will have strict timescales for the removal of waste. Sometimes materials may need to be tested for radioactive levels at the laboratory and pulling together that information, including waiting for results and feedback, can be a time-consuming process. Linking digital tools is one way to streamline this process, helping to get a clearer idea of timescales and remove any cost uncertainties.
What do you believe is the most important emergent technology within the industry and how could this potentially change the world for all of us?
The role of robotics within decommissioning projects is important and we are learning from the way they’re being deployed at legacy facilities where radiation levels prevent manual access. Currently, decommissioning projects are the prime focus for robotics, with remote communication broadening the possibilities. Robots can be instructed across different sites and their ability to improve productivity and adapt to changing conditions can also be utilised in the build of new power stations.
How do you believe that the nuclear industry can be aided by digital processes and technology? Which of this sector do you believe will change the most over the coming years? And how?
Information management tools such as 3D CAD technology have massive potential for the nuclear industry. While an architect may be interested in precision drawings to provide a visual of the finished product, it’s the ability to share related data at different stages of development projects, through design, regulatory assessment, construction, operation and decommissioning, which holds the greatest value for the nuclear industry.
Blockchain and energy – Omar Rahim and Lord Redesdale, Energi Mine
The Bitcoin explosion in 2017 only alerted us to the emergent technology of blockchain. We are perhaps only now touching upon the possibilities of tokenised relationships. One company keen to exploit these opportunities is Energi Mine, which raised $15mn in under 81 minutes for its new token. We approached the CEO Omar Rahim, an industry player with 12 years’ experience leading in the gas industry, and Lord Redesdale, ex-Head of Energy in the House of Lords, to explore how blockchain could change the business.
What do you believe to be the most important emergent digital products within the energy market? What impact do you think this will have on current businesses within the sector?
Undoubtedly the emergence of blockchain. It is an immutable ledger for transparent record-keeping. Individuals will be able to trade energy securely in a peer-to-peer ecosystem. Power will be seized from the hands of the big six energy companies as blockchain will enable this to be transferred over to consumers. Therefore, consumers will be able to demand cleaner and cheaper energy – ultimately this creates more transparency in the system. This is a breath of fresh air in a notoriously opaque industry, quite resistant to new digital technologies like automation, which should have had a transformative impact years ago.
How do you believe the industry will change over the next five years? If we look into the future, what do you think will be the most significant development as a result of digital disruption in the industry?
The big energy companies appear to continually take their customers for granted, hitting them with price hike after price hike. They will be replaced if they fail to adapt their business models. We predict that one of these will become the new Nokia. People are making their own energy; however, they currently have no way to distribute it beyond selling it back to the big companies. The future is peer-to-peer and embracing new technological innovations such as blockchain will be paramount.
In an ideal world, where would Energi Mine like to guide the industry over the coming decade? How could this potentially benefit the global community?
Renewable energy is trending to become the main source of power. We can no longer go on burning fossil fuels and polluting our environment. Every person has the power to make a difference to their carbon footprint. Energi Mine is at the forefront of this shift. In a decade, we predict that Energi Mine will be the platform that energy providers operate through around the world.
We hope our blockchain based token, the EnergiToken, will be key in the promotion of energy saving behaviour. This can encourage people to be more efficient and less reckless in their energy consumption. Energi Mine intends to become an integral part of the fabric of the energy market, driving these changes forward. If and when the larger energy companies finally catch up, they will be forced to adapt to a business model that prioritises transparency over profit.
Trafigura and Yara International explore clean ammonia usage
Reducing shipping emissions is a vital component of the fight against global climate change, yet Greenhouse Gas emissions from the global maritime sector are increasing - and at odds with the IMO's strategy to cut absolute emissions by at least 50% by 2050.
How more than 70,000 ships can decrease their reliance on carbon-based sources is one of transport's most pressing decarbonisation challenges.
Yara and Trafigura intend to collaborate on initiatives that will establish themselves in the clean ammonia value chain. Under the MoU announced today, Trafigura and Yara intend to work together in the following areas:
- The supply of clean ammonia by Yara to Trafigura Group companies
- Exploration of joint R&D initiatives for clean ammonia application as a marine fuel
- Development of new clean ammonia assets including marine fuel infrastructure and market opportunities
Magnus Krogh Ankarstrand, President of Yara Clean Ammonia, said the agreement is a good example of cross-industry collaboration to develop and promote zero-emission fuel in the form of clean ammonia for the shipping industry. "Building clean ammonia value chains is critical to facilitate the transition to zero emission fuels by enabling the hydrogen economy – not least within trade and distribution where both Yara and Trafigura have leading capabilities. Demand and supply of clean ammonia need to be developed in tandem," he said.
There is a growing consensus that hydrogen-based fuels will ultimately be the shipping fuels of the future, but clear and comprehensive regulation is essential, according to Jose Maria Larocca, Executive Director and Co-Head of Oil Trading for Trafigura.
Ammonia has a number of properties that require "further investigation," according to Wartsila. "It ignites and burns poorly compared to other fuels and is toxic and corrosive, making safe handling and storage important. Burning ammonia could also lead to higher NOx emissions unless controlled either by aftertreatment or by optimising the combustion process," it notes.
Trafigura has co-sponsored the R&D of MAN Energy Solutions’ ammonia-fuelled engine for maritime vessels, has performed in-depth studies of transport fuels with reduced greenhouse gas emissions, and has published a white paper on the need for a global carbon levy for shipping fuels to be introduced by International Maritime Organization.
Oslo-based Yara produces roughly 8.5 million tonnes of ammonia annually and employs a fleet of 11 ammonia carriers, including 5 fully owned ships, and owns 18 marine ammonia terminals with 580 kt of storage capacity – enabling it to produce and deliver ammonia across the globe.
It recently established a new clean ammonia unit to capture growth opportunities in emission-free fuel for shipping and power, carbon-free fertilizer and ammonia for industrial applications.