Shell Takes the Lead on Natural Gas, Welcomes the Future of Clean Energy
As the global population reaches nearly nine billion people and counting, the demand for energy is moving at a pace in which the world can hardly keep up (while emissions rise to levels it can hardly afford). In the first half the the 21st century alone, energy demand is expected to double, leaving governments scrambling for solutions. Like President Obama, leading energy companies agree that it will take an “all of the above” approach—even Big Oil.
Royal Dutch Shell's CEO Peter Voser recently said that the US and world need to take climate change seriously and increase the use of renewable energy-generating sources, but that ultimately the abundant supplies of natural gas will be the backbone of an immediate cleaner future. As the world's largest gas producers, both the US and Shell will lead the way.
“The world needs to follow America’s lead and take full advantage of the cleanest-burning fossil fuel, and that’s natural gas,” Voser said during a speech at a luncheon held by the Boston College Chief Executive’s Club of Boston. “Increased use of natural gas is the biggest single step that the world can take today to begin reducing [carbon dioxide emissions].”
With the biggest share of the market, Shell has some 22 million tons of it refers to as “LNG equity,” not including the company's stake in other projects like Chevron's massive Gorgon gas project in Australia and the 7 million tons of uptake expected to come from a recent deal with Repsol SA after acquiring assets in Trinidad and Peru.
"Beyond this, we have a lot of projects that we are studying,” Andy Brown, Shell's Upstream International Director, said in a press conference. “That really reinforces our position as a the leading LNG trader across the world.
“Actually, if you look at Shell today we produce about as much gas as we do oil. And of all the majors, we probably have the largest proportion of gas... It really is our commitment to this industry and the environmental benefits that we see behind gas that underpins that positioning.”
TIGHT AND SHALE GAS
Further exploration in tight and shale gas, particularly in the US, is providing a richness of opportunities for the company and country alike.
“Tight and shale gas has been really what has transformed our industry in the last few years,” says Brown. “It has doubled the amount of recoverable gas in the world and transformed the energy outlook of the US.”
Flashback to five years prior, and it was a different picture. “We thought we would be gas short,” Brown adds. “The tight and shale gas revolution has transformed the picture” to essentially the opposite, driving a “reindustrialization of the Midwest.”
LEADING BY EXAMPLE
Leveraging its position in the market, Shell is not only using natural gas to power its own drilling rigs, ships and heavy trucks, but encouraging others to make the same transition as the company invests heavily in building the infrastructure to fuel trucks and boats to run on it.
And despite the challenges—from funding projects to economic uncertainties—Shell's approach makes the pursuit of natural gas economic while prices are low.
“If you’re just producing natural gas and selling it into a pipeline, of course it’s a pretty challenging market right now,” Marvin Odum, president of Shell Oil Co., the company’s Houston-based U.S. Arm, told Fuel Fix. “If you have the ability to play through that whole value chain of producing, marketing, liquefaction on through to transportation and then delivery to a higher market, you see that’s a better business.”
The company also believes that despite a massive increase in natural gas production in the US, there is “not going to be a flooding of the LNG market” and that, in time, other areas will develop, Brown says. China's LNG demands will increase by a fivefold, while European markets standby until CO2 pricing schemes make the fuel less expensive and public concern over the effects of “fracking” for the fuel eases.
For now, Shell is working on changing those public perceptions in collaboration with industry and NGOs to develop standards exploring those resources, which the company believes can be done without posing any harm to the environment or nearby communities.
“It's so important for us to set the standards the industry has to apply,” says Brown, which will ultimately put the outlook of natural gas on “much better footing.”
The company also highlights the important role a natural gas-powered market would play in renewable energy.
“Gas is the natural ally of renewables like wind and solar,” Voser says. “Wind and solar are intermittent energy sources [but] natural gas can keep the electricity flowing when the sun doesn’t shine and the wind fails to blow. Unlike many other energy sources, gas can be switched off and on quickly, and its global supply is increasingly diverse, which enhances energy security.”
The potential for transformation in America is huge. Though the US imports 20 percent of its energy today, in just a matter of years the shale gas boom and an influx of clean energy technologies will put the country on track to becoming completely self-sufficient.
Why Transmission & Distribution Utilities Need Digital Twins
As with any new technology, Digital twins can create as many questions as answers. There can be a natural resistance, especially among senior utility executives who are used to the old ways and need a compelling case to invest in new ones.
So is digital twin just a fancy name for modelling? And why do many senior leaders and engineers at power transmission & distribution (T&D) companies have a gnawing feeling they should have one? Ultimately it comes down to one key question: is this a trend worth our time and money?
The short answer is yes, if approached intelligently and accounting for utilities’ specific needs. This is no case of runaway hype or an overwrought name for an underwhelming development – digital twin technology can be genuinely transformational if done right. So here are six reasons why in five years no T&D utility will want to be without a digital twin.
1. Smarter Asset Planning
A digital twin is a real-time digital counterpart of a utility’s real-world grid. A proper digital twin – and not just a static 3D model of some adjacent assets – represents the grid in as much detail as possible, is updated in real-time and can be used to model ‘what if’ scenarios to gauge the effects in real life. It is the repository in which to collect and index all network data, from images, to 3D pointclouds, to past reports and analyses.
With that in mind, an obvious use-case for a digital twin is planning upgrades and expansions. For example, if a developer wants to connect a major solar generation asset, what effect might that have on the grid assets, and will they need upgrading or reinforcement? A seasoned engineer can offer an educated prediction if they are familiar with the local assets, their age and their condition – but with a digital twin they can simply model the scenario on the digital twin and find out.
The decision is more likely to be the right one, the utility is less likely to be blindsided by unforeseen complications, and less time and money need be spent visiting the site and validating information.
As the energy transition accelerates, both transmission and distribution (T&D) utilities will receive more connection requests for anything from solar parks to electric vehicle charging infrastructure, to heat pumps and batteries – and all this on top of normal grid upgrade programs. A well-constructed digital twin may come to be an essential tool to keep up with the pace of change.
2. Improved Inspection and Maintenance
Utilities spend enormous amounts of time and money on asset inspection and maintenance – they have to in order to meet their operational and safety responsibilities. In order to make the task more manageable, most utilities try to prioritise the most critical or fragile parts of the network for inspection, based on past inspection data and engineers’ experience. Many are investigating how to better collect, store and analyze data in order to hone this process, with the ultimate goal of predicting where inspections and maintenance are going to be needed before problems arise.
The digital twin is the platform that contextualises this information. Data is tagged to assets in the model, analytics and AI algorithms are applied and suggested interventions are automatically flagged to the human user, who can understand what and where the problem is thanks to the twin. As new data is collected over time, the process only becomes more effective.
3. More Efficient Vegetation Management
Utilities – especially transmission utilities in areas of high wildfire-risk – are in a constant struggle with nature to keep vegetation in-check that surrounds power lines and other assets. Failure risks outages, damage to assets and even a fire threat. A comprehensive digital twin won’t just incorporate the grid assets – a network of powerlines and pylons isolated on an otherwise blank screen – but the immediate surroundings too. This means local houses, roads, waterways and trees.
If the twin is enriched with vegetation data on factors such as the species, growth rate and health of a tree, then the utility can use it to assess the risk from any given twig or branch neighbouring one of its assets, and prioritise and dispatch vegetation management crews accordingly.
And with expansion planning, inspection and maintenance, the value here is less labor-intensive and more cost-effective decision making and planning – essential in an industry of tight margins and constrained resources. What’s more, the value only rises over time as feedback allows the utility to finesse the program.
4. Automated powerline inspection
Remember though, that to be maximally useful, a digital twin must be kept up to date. A larger utility might blanche at the resources required to not just to map and inspect the network once in order to build the twin, but update that twin at regular intervals.
However, digital twins are also an enabling technology for another technological step-change – automated powerline inspection.
Imagine a fleet of sensor-equipped drones empowered to fly the lines almost constantly, returning (automatically) only to recharge their batteries. Not only would such a set-up be far cheaper to operate than a comparable fleet of human inspectors, it could provide far more detail at far more regular intervals, facilitating all the above benefits of better planning, inspection, maintenance and vegetation management. Human inspectors could be reserved for non-routine interventions that really require their hard-earned expertise.
In this scenario, the digital twin provides he ‘map’ by which the drone can plan a route and navigate itself, in conjunction with its sensors.
5. Improved Emergency Modelling and Faster Response
If the worst happens and emergency strikes, such as a wildfire or natural disaster, digital twins can again prove invaluable. The intricate, detailed understanding of the grid, assets and its surroundings that a digital twin gives is an element of order in a chaotic situation, and can guide the utility and emergency services alike in mounting an informed response.
And once again, the digital twin’s facility for ‘what-if’ scenario testing is especially useful for emergency preparedness. If a hurricane strikes at point X, what will be the effect on assets at point Y? If a downed pylon sparks a fire at point A, what residences are nearby and what does an evacuation plan look like?
6. Easier accommodation of external stakeholders
Finally, a digital twin can make lighter work of engaging with external stakeholders. The world doesn’t stand still, and a once blissfully-isolated powerline may suddenly find itself adjacent to a building site for a new building or road.
As well as planning for connection (see point 1), a digital twin takes the pain out of those processes that require interfacing with external stakeholders, such as maintenance contractors, arborists, trimming crews or local government agencies – the digital twin breaks down the silos between these groups and allows them to work from a single version of the truth – in future it could even be used as part of the bid process for contractors.
These six reasons for why digital twins will be indispensable to power T&D utilities are only the tip of the iceberg; the possibilities are endless given the constant advancement of data collection an analysis technology. No doubt these will invite even more questions – and we relish the challenge of answering them.