2 Mar 2022

Energy Transition - A panorama

Energy Transition - the drivers

The dual waves of digital transformation and energy transition are changing the electricity industry’s landscape at a unprecedented pace. It is not only calling for innovative business models, but also demanding technological (i.e. digital) solutions for operating the grid reliably. There are multiple driving factors causing these waves, climate change being the most pressing one.

Forces behind the Energy Transition are:

  1. Climate change (extreme heat and/or cold) - resulting in the pressing need to reduce carbon footprint.
  2. Ever growing energy needs of the planet driven by population growth, urbanization, economic development of the developing-nations. Need to find a way to ``sustainable-ly” meet this energy demand.
  3. Aging infrastructure of the central grids in the developed countries - needing major capital investments for upgrades to maintain reliability of the supply.
  4. Rising energy demand in developing nations with minimal centralized grid infrastructure - needing innovative distributed energy generation solutions to sustain this demand.
  5. Rise in low-probability high-impact events such as natural disasters (hurricanes, earthquakes, etc.) calling for increased resilience of the power grid to sustain the critical loads in the face of such events.

On the other hand, forces behind the Digital Transformation of the energy sector are rooted in the technological advances such as:

  1. Large scale Distributed Energy Resources (DER) deployment - driven by increased scales of production and falling costs - leading to higher levels of adoption.
  2. Proliferation of the consumer level information and communications technologies - leading to the Internet-of-Things (IoT) age of hyper-connectivity.
  3. Wide-spread deployment of measurement and sensing infrastructure- due to decreasing sensor costs - leading to plethora of data availability and the potential to harness it for operational savings.
  4. Growing number of electric vehicles on the roads - even higher adoption predicted in the near future - needing digital solutions of Vehicle-to-Grid energy storage interactions.
  5. Increase in “grid-responsive high-performance” buildings equipped with advanced analytics and controls - offering opportunities for operational savings

These two sets of forces have created optimal conditions where both “technology-push” and “market-pull” are working in harmony to bring about this transformation in the electric utility sector.

Energy Transition - the role of data-driven approaches

As the sensing and measurement infrastructure grows across all parts of the electricty grid (including the familiar “smart meters” with 75%+ deployment rate in the U.S.) - the utilities are now able to measure and store a lot of data. When right set of technological tools are employed to extrat value out of this data (data-driven approaches such as machine learning), this data can be converted into the value that utilities and consumers derive. It can inform decision-making at different time-scales (10-years capacity planning to 5-min dispatch decisions). It can help reduce the operational losses because of unexpected critical equipment failures (ability to predict equipment failure with data-driven approaches). It can help unlock the value through operational efficiences generated through real-time visibility and analytics of grid’s condition. And many more such value-streams which can be harnessed with the power of processing the data to generate insights.