Electrification and the path to net-zero

The U.S. Energy Information Administration projects a nearly 50% increase in world energy use by 2050, led by growth in renewables. Similarly, the demand for electricity will increase 75 – 100% within the same time-period, driven by the shift in mobility to electric vehicles, and industrial electrification. Most of the projected increase in demand will be met by renewable energy. As most renewable power options, such as solar and wind, will be generated away from population centers, larger capacity, and more resilient transmission systems will be key. While distribution systems need to grow and be more dynamic, cybersecurity remains a concern. 

The game changer lies with digital technology, which is mission-critical for electrification, as the shift from fossil-based systems to electric will drive change within the existing power infrastructure and beyond, with new microgrids, and self-generation at industrial sites. Digital solutions used in power management will manage the complex power requirements, facilitate cybersecurity, integrate advanced analytics and AI to automate reliability, and flexibly enable distributed, loosely coupled microgrids.

Mitigating growing energy demand and emissions

According to McKinsey, the top three generators of greenhouse gas (CO2 and methane) emissions in 2019 were from power generation (30%); industry (20%); mobility (19%) – mostly from the burning of fossil fuels for energy. This January 2022 report titled “The net-zero transition: what it would cost, what it could bring” focuses on opportunity for power generators and industry to invest preferentially in renewable, low-carbon energy sources, and electrify industrial processes. As such, the electrification of heavy industry to meet the decarbonization imperative is driving 50% more growth in electricity, than from mobility alone. 

To mitigate growing global energy demand, energy efficiency is key. Digital technologies will be instrumental in achieving 10 – 20% increase in energy efficiency. In support of net-zero targets, capital-intensive industries are focused on electrifying energy production and process heat, while ensuring that electrical generation aligns with their own sustainability initiatives.

At the same time, carbon trading, and carbon tax emissions-cutting policies are increasingly crucial in providing access to the right levels of capital for decarbonization investment in the most challenged economic zones and industry sectors. Investments in renewables and intelligent grids, go together with carbon trading. Digital solutions supporting distributed generation sources and grids are crucial for tracing carbon emissions from renewable source to industrial end use – and onward, complementary mass-balance solutions enable calculation and tracking the carbon intensity of finished products produced via renewable energy. 

Fossil fuels will continue to be a significant source of global energy through 2050. However, carbon capture, utilization and storage (CCUS) will play an increasingly important role. To move beyond what CCUS can achieve, electrification has a key role in reducing carbon emissions. This is especially so, with new investments, almost exclusively in low-carbon electricity sources, and the retrofitting and replacement of older CO2 emitting utilities and processes in energy-intensive plants, which includes refining units, bulk chemicals, metals, such as aluminium. This shift in investment will drive a new generation of digital solutions to support the growing appetite for electrification. 

 

Turning challenges into opportunities 

With distributed power resources, grids will need to accommodate rapidly expanding and evolving distributed power production, storage and consumption models. New digital software will need to rapidly keep pace with the innovation of the power generation system. 

Power grids will need to expand steadily beyond their current capacity and change their structure to eliminate single points of failure and to accommodate the dynamic nature of distributed renewables. Traditional grids are expensive to upgrade and digital solutions commonly used for transmission and distribution management are insufficient. The underlying solutions must be structured to accommodate increasing adoption of AI-driven solutions to further optimize and protect electrical networks.  

With the increasing complexity of distribution systems, reliability and outage prevention becomes more challenging to manage with traditional approaches. Digital technology based on advanced data analytics and AI will become essential to assist operators in responding quickly and effectively to situations across a diverse system. To succeed, digital management systems will need to provide granular and easily visualizable views of the customer distribution network.  

It is necessary to monetize distributed power, as advances in digital software provide this visibility, enabling distribution companies to monetize operations, optimization, maintenance and pricing of distributed power and storage. As vehicle batteries increase their capacity and capabilities, the mobility network can be monetized as a storage element of the connected grid. 

Cybersecurity needs need to be met. Software providers like OSI have proven track records in meeting standards, reacting rapidly and updating systems for electric utility providers. 

Microgrids have emerged as a key investment area to fill the regional void, while meeting demand and increasing reliability and security required by large power consumers, communities and localities. The right digital solution enables efficient, optimized development of microgrids, integrated with regional grids and developed in a more cohesive, intelligent way. This approach proactive innovation and adoption in new power generation connected storage, while ensuring reliable supply. In addition to battery storage, innovations, such as commercialization of hydrogen fuel cell storage, can be integrated easily.

Distributed power generation in industrial facilities is another important electrification opportunity. Cogeneration optimizes the usage of waste heat during power generation for supplemental process heat. Using the same adaptive process control and digital twin technologies applied to process equipment, an optimized amount of electricity is produced and predictively available. Digital software technologies are key in this area to make cogeneration practically available to a wider spectrum of industrial entities. These include energy management, electric utilities optimization, and self-maintaining advanced process control.

Between distributed generation, batteries, storge and integration, digital technology is a critical enabler of innovation and proactive planning for navigating the risks posed by increasingly interconnected grids. AI, advanced analytics, and system risk analysis are essential to understanding and planning for complex systems. Modeling and optioneering of new battery chemistry and industrial scale fuel cells with rigorous digital models are playing a crucial role in enabling the ecosystem of startups and innovators. 

 

Energy management and beyond

As the process industry transforms to operate in a low-carbon future, electrification is a critical part of this journey. Product mixes are shifting from the use of transportation fuels to new sustainable materials. To support this trend, microgrids will become increasingly valuable for energy management at industrial sites. Industrial power producers need to align the renewables component of electric power consumed and generated onsite, with the associated carbon footprint benefit. Producers need to optimize power generation and satisfy process energy requirements from electricity.