The world is undergoing an energy transition, from a system based on fossil fuels to a system based on renewable energy, in order to reduce global greenhouse gas (GHG) emissions and avoid the most serious impacts of a rapidly changing climate.
Digitalization has been an important instrument for the energy transition and an enabler of three main industry trends: electrification, decarbonization, and decentralization, both critical to enabling the energy transition needed for humanity.
In September 2019, 77 countries, ten regions, and over 100 cities committed to net-zero carbon emissions by 2050. Additionally, 100 business leaders, including top European energy companies, pledged concrete actions to keep global warming within 2 degrees Celsius. .
According to ClimateWatch, 75% of the world’s greenhouse gas emissions are caused by energy use. Greenhouse gas emissions that cause the footprints are measured in three ways: Scope 1, 2, and 3. Scope 1 emissions are those that are directly generated by the company, such as a refinery emitting fumes. Scope 2 emissions are those that are created by the generation of the electricity or heat needed by the company to sell its main products. Scope 3 emissions are those caused by the entire value chain, including the end-user of the product over its life cycle, and are much more difficult to measure,
The need to decarbonize companies – and thereby portfolios – becomes more urgent as evidence of global warming mounts every year. In order to act, it is important to be able to measure it. The Greenhouse Gas Protocol was set up to establish comprehensive global standardized frameworks to measure and manage emissions from private and public sector operations, value chains, and mitigation actions.
To further reduce emissions, in sectors such as transportation, heating, manufacturing, and construction organizations need to identify several strategic, operational, and tactile strategies to achieve carbon neutrality by 2050.
Some investments and pledges have been contributing to global regional and local levels across. In transportation, countries such as German, France, UK, India are banning ICE (internal combustion engine) vehicles, being estimated that by 2040 electric cars could make up 57 percent of all passenger cars sells worldwide and 33 percent of the global fleet may be electric by 2050 . Industries like building construction in the UK have commitments to reduce 50% of their carbon footprint over a building lifetime. Additionally, more energy produced by new renewables investments, carbon sequestration, and advanced oil recovery technologies is driving the path to net-zero.
Overlaying these trends is the advance of digital technologies, sometimes at a breath-taking pace.
New digital technologies are sparking change
Digital technologies can help combat climate change through reducing emissions, strengthening resilience to climate-related natural hazards, and improving organizations’ capacity to act. IT has to be repositioned as an enabler by performing the transformation to simplify, standardize, and improve efficiencies that will reduce emissions. To focus on value delivery and become digitally enabled, the industry has the potential to unlock the power of the 12 technologies tackled and reduce up to 15% of the GHG emissions .
1. Automation/RPA (Robotic Process Automation)
Automating and maximizing the efficiency of processes in energy, agriculture, industry, and manufacturing could make a significant contribution to the climate. Currently, half of the tasks undertaken by humans could already be automated, even at the current levels of technology .
For example, gas flaring at the refiners is a delicate balance between volumes of the flare gas, the steam, and the natural gas. Getting the right mix, it’s key. Today, it can be done through an automation flaring tool (getting the numbers right) that is connected to the control system, and using a digital dashboard can optimize the right flares gas mixes and create efficiency combustion, reducing emissions.
2. Artificial intelligence (A.I.)
Across operations, A.I. can be applied through access to real-time data insights, contributing to the worker and onsite safety, and delivering efficiencies that have helped reduce companies’ carbon emissions.
For example, real-time A.I. algorithms can be used for “smart charging”: the monitoring, management, and control of electric vehicle charging stations with the goal of optimizing energy consumption. The algorithm then predicts how long the vehicle will be plugged-in, monitors the grid, and controls charging to give drivers the charge they want. The customer can choose to go for the lowest cost or the lowest carbon intensity of emissions of the electricity to buy.
5G combined with A.I. has the potential to make our societies and economies radically more efficient and sustainable. Telecom and utility companies are rolling out 5G networks fast enough to handle masses of data from advanced sensor arrays without lag times.
For example, Ericsson, Telia, and Einride are working on a connectivity-based 5G solution that could lead to an exponential transformation of short-distance transport on public roads. The project, a continuously operating driverless vehicle aims to make all road freight transportation electric. Such a sustainable and cost-competitive solution may replace more than 60% of today’s transport impact.
Drones and robotics will play a pivotal role in safety, efficiency, and reliability in the energy sector. In a recent study, small drones result in a 50% reduction in GHG emissions per package delivered compared to diesel trucks in California . An example of Eon, the Germany utility firm, is using drones for the maintenance and repair of electricity transmission towers, not only reducing its employee’s safety but also the frequency of inspections, reducing their carbon footprint to travel to remote places.
5. Internet of Things (IoT)
IoT and smart connectivity are vital enablers to reduce emissions. IoT enables green microgrids to be brought online when non-renewables networks aren’t available. The use of IoT and smart devices will enable energy networks to become more efficient, reducing energy consumption. For example, Repsol and Saudi Aramco have teamed up to build one of the largest zero-emission synthetic fuel production plants in the world. The fuel production plan will use IoT devices and edge computing to gather data in order to monitor and analyze their production processes.
Blockchain is already revolutionizing the way we trade energy through smart contracts, and applications in the energy industry should be coming soon. The creation of a decentralized energy system with other energy players in different regions, applicability to e-mobility, and management of supply-chain players are just a few examples of its applications. Great applicability this technology is on the calculation of the carbon footprint. Today, organizations don’t follow any structure for calculating carbon footprints. Blockchain will the future technology that allows organizations for transparency and accountability in carbon emission offsetting. In the future we will some of the organizations even trading off their carbon footprint with other pollution more through cryptocurrency, revitalizing an emission trading market.
7. Virtual Reality (VR)/Augment reality (AR)/Digital twin
Companies are now employing digital twins, which uses analytics to anticipate breakdown, thus increasing the operational efficiencies. A digital twin uses all data from an asset and its equipment. The data is combined in modeling and visualization techniques to understand how each component behaves across the asset’s lifespan under multiple scenarios. For example, GE is enabling operators to understand, predict, and optimize the operational performance of their machines. Put shortly, the technology is allowing the reduction of the carbon intensity of emissions, the energy consumption, and the operational costs of an entire facility. Virtual Reality and Augment Reality is taking performance to a new level. For example, TATA Consultancy Services have helped oilfield service companies being trained with the latest simulators, reducing operations and drilling time.
8. Big data and analytics
Data is the new oil, no news here but data analytics will be critical for the planning, managing, efficiency, and reduction of carbon emissions. Big data analytics allow companies to analyze large data sets and draw better decisions. For example, big data is transforming how city governments on an energy management solution that can significantly impact energy consumption, cost, and carbon emissions.
9. Network agility
Network agility is fundamental to integrate decentralized renewable energy sources, to activate and unlock the flexibility of the increasing variability in the energy system. Network agility can enable people to choose the services that they need or help them become active participants in the energy system with their own projects, with their own resources. In 2019, one million people across England and Wales lost power due to disruptive and distress in the network. The future of a resilient system needs the creation of a digital smart grid to integrate the IoT solutions, digital technologies, and respond and adapt quickly to the changes in the grid. The intelligence unit is key to leverage data and to make a grid that is flexible, cost-effective, and safe.
The internet plays a critical role in how we connect, how people live, and how companies operate. However, the internet is also tied to a negative impact on the climate crisis. Currently, the internet accounts for 4% of GHG emissions across the globe . There are plenty of examples of how the internet is used today to reduce the carbon footprint. One example is through modeling energy prices based on carbon emissions to incentivize consumption at times of lower demand. Also given the asset-intensive nature of the industry, there is a need for remote monitoring and managing assets, along with predictive maintenance with the use of real-time connection and monitoring of assets resulting in a reduction of failure rate.
11. Geographic information systems (GIS)
Geospatial platforms and Geographic Information System (GIS) solutions are gaining adoption. For example, utility industries rely on a combination of Enterprise Asset Management (EAM) systems and geospatial platforms to manage assets and workflows to determine risk. Hence, utilities are increasingly interfacing their EAM solution with an asset investment planning solution to reduce maintenance costs and improve operations and, hence reducing emissions.
Cloud solutions are gaining momentum. However, the utility industry largely being a regulated sector, the financial treatment of cloud investment as an operating expenditure continues to be an obstacle for broader adoption. Recent examples are the Microsoft and bp partnership aiming to help bp to develop new technology innovations and digital solutions built on our cloud to reduce energy use and carbon emissions, while Microsoft is buying green energy to support their cloud business.
All these technologies have trade-offs, as we also understand digital technologies have an impact on carbon emissions but the majority of the examples mentioned above highlight a positive impact and the greatest benefits of these twelve digital technologies. Digitalization is and will be essential to keep this increasingly decarbonized, decentralized energy system running in a stable and affordable way. Digitalization will have a starring role as we move towards a net carbon zero future processes. Fast movers and early adopters will have both the advantage of experience and the chance to establish themselves and those failing to adopt will be at a severe disadvantage, failing behind their today’s peers.
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