Both the UN Intergovernmental Panel on Climate Change (IPCC), published in March 2023, and the recently released follow-up policy statement, “Global Stocktake,” call for more aggressive national targets for reducing and eliminating CO2 emissions. Among many measures that the UN calls on countries, industry and the financial community to pursue more aggressively are:
- Acceleration of renewable energy
- Reduction of “unabated” fossil fuels
- More rapid EV adoption
- Broader global access to affordable energy
- 24x7 access worldwide to energy and electricity
- Access to investment capital in the global south
To bring renewable power to end users, to accelerate the integration of distributed renewable energy sources and storage, and to provide capability to recharge a rapidly accelerating surge of on-road EVs, the world’s power grids must keep pace and expand rapidly.
Can they? Only with the help of digital.
Fast Growing Demand
While estimates suggest global energy demand could increase anywhere from 50 to 75% by 2050, a number of recent trends are suggesting the reality may be even higher. In the US, for instance, current government policy calls for two-thirds of the 290 million vehicles on the road to be replaced by EV driven mobility by 2032.
Today that number is, at best 3 million, and that’s just demand from mobility. With the rapid move to put everything companies and consumers do onto the cloud, and the increasing convenience and dependence on digital financial transactions, cloud computing is making entities like Google, Microsoft, Amazon, and many financial institutions some of the largest and fastest-growing energy consumers globally. Global data center electrical consumption was estimated by IEA at between 240 to 340 terawatt hours in 2022, over 1% of global energy demand, and that doesn’t even include crypto mining power consumption.
In the US, the friction between the power grid and the regulatory agencies’ permitting process has slowed the speed of new transmission and distribution projects to something akin to a journey through a swamp of molasses. While there are already signs of strain in those processes, that challenge is being repeated globally.
Regulatory Delays for Transmission
A major international transmission line to connect Quebec renewable hydropower to New England first began development in 2008. After many permitting and related delays, the project has gone 50% over budget in the past two years, and may finally be completed by the end of this year – a whopping 15 years after it began. In the meantime, water which could have been supplying clean power to New England kept flowing down the Northern Quebec rivers and across the dams. In a similar story, the TransWest Express transmission line to bring wind power from Wyoming to California broke ground this June after an even longer approval, hearing and permitting process.
One way digital can help the increasingly stressed transmission picture is by forecasting supply and load imbalances and applying modeling and analytics to optimize routing and deployment of available power to an increasingly dynamic demand picture, and make optimal use of transmission systems to maximize use of available generation and ensure reliability.
Digital solutions can’t solve the regulatory delays, though they can help substantially in providing better data to speed permitting and improve execution certainty with better cost estimates, faster engineering of projects, and born-digital project execution. For example, AspenTech’s concurrent engineering solution can cut engineering time and effort a documented 50%, while a cost estimating solution reduces cost uncertainties and overruns by a significant percentage at each project stage.
Seifi Ghasemi, Air Products (APCI) CEO, who is pursuing an aggressive hydrogen production agenda, argued in a presentation at CERAWeek 2022 that permitting is not the real impediment – his company rarely faces permitting issues because they come armed with all the correct data and information. This data enablement is due in part to Air Products being one of the most sophisticated users of AspenTech’s digital technologies in the design and project process.
Challenges with Grid Resiliency
Global grids are already facing reliability and resiliency challenges as electrification picks up pace. Utilities today have started looking at factors called “distributed generation saturation” and “DER adoption rate” when analyzing and planning for grid investments. Where distributed energy (solar, wind, and power storage) is at a higher and growing intensity, the grid behaves more dynamically; causing more grid traffic and as it does, more advanced digital solutions become critical.
Digital solutions will be crucial to today’s grid challenges and tomorrow’s grid evolution. Advanced Distribution Management Systems (ADMS) and Distributed Energy Resources Management Systems (DERMS) provide the most capable and scalable solution to managing an increasingly complex grid with greater insight and fewer people. These also enable grids to cope with increased demand for dynamic management and “behind the meter” insight. Today, The AspenTech’s OSI DERMS solution is powering one of the world’s most advanced utilities, Iberdrola, who is enabling Spain’s push for 100% renewables in their power network.
Power Reliability at Industrial Sites
Globally, asset-intensive industries such as refiners, chemical producers and mineral processing facilities are facing pressure to simultaneously electrify and increase renewable energy content. In many geographies, there are significant challenges and risks associated with achieving 100% power reliability. A key digital solution in these cases is the industrial DERMS/microgrid solution, which can insulate sites from unexpected and sudden shutdowns but also optimize and manage renewable energy content, whether onsite or sourced across the grid. Two implementers of industrial power management solutions from AspenTech include Aluminum Bahrain (ALBA), the Middle East’s largest aluminum processor, and the mining company Fortescue, which is a leader in moving towards green energy.
Innovating in Electrification of Processes
As chemical and refining leaders look toward the possible electrification of energy-hungry process units, AspenTech’s Aspen Plus® modeling system, which can model the interface between chemical and electrical systems, and optimize designs, is a valuable tool in innovating, proving, and scaling up electrification of both heat exchanger systems and reactor systems themselves.
For more insights into the strategic advantages that digital solutions will provide in the rapid growth and increasing needs of the grid for agility, flexibility, optimization and resiliency, read our recent white paper.