Our clean tech data event highlighted the cross over between the digital and the physical world, in this case energy. Rene Savelsberg of SET ventures explained the investment themes resulting from this cross road and Jessica Hernandez Castro Barreto of Lux research highlighted the opportunities for industrial IoT use cases, Jan van Dalen of the Erasmus center of Future Energy explained some sharing economy applications, driven by the use of data.
Entrepreneurs like Pedro Pinto (Fibersail), Maarten de Boo (Widgetbrain) and Han Bak (Chesswise) illustrated how data converge with hardware to create smart solutions. Digitising the physical world will impact the energy sector.
“Our intuition of the future is linear but the reality of IT is exponential, and that makes a profound difference”, Ray Kurzweil
The disruption through digital is even more relevant to the energy transition than previously digitised information and transaction based sectors such as banking, entertainment and retail. Energy and water intensive sectors like food, housing and mobility will be digitally disrupted and, if steered in the right direction, can achieve major improvements in the aggregate energy efficiency of their value chains. Next gen mobility includes sharing, electrification and interconnectivity and autonomous vehicles. New materials will be used that are looped back through remanufacturing and recycling. The challenge for cities and countries is to promote the new beneficial technologies and business models but at the same time avoid negative system effects by better system integration: upgraded public transport systems and modal integration, whilst road systems are adapted and traffic volumes controlled by congestion charging or other means. The intelligent use of data and smart solutions are key to the succes of such integrated system.
The build environment’s value chain, responsible for the majority of global electricity use, will be reshaped fundamentally over the next decades. Developments as sharing and virtualisation decreases the demand for new construction, industrial production and 3D printing could move industrialisation of the building process to a tipping point with higher efficiency and less (virgin) material use, modularity and durability contribute to the life of building envelopes by increased flexibility of use and avoidance of demolition and energy positive buildings are becoming more prevalent. Energy management tools like smart meters, lighting controls and smart thermostats grow with double digit yearly rates.
Digital technology could enable an entirely new energy system, becoming cheaper, more accessible and efficient, for example by gathering and evaluating information for appropriate real time grid time or enabling small and medium customers to directly participate in the energy market. In power generation, digitisation is able to address many challenges that arise with renewable energies. The negative effects of the volatility in the availability of wind and solar energy can be mitigated by matching electricity demand with generation through automated digital alignment strategies. Instead of managing power generation to demand, demand must be matched to the power available. The number of companies offering demand-side management is growing, and the cost reductions in battery storage will accelerate dissemination in residential applications and mobility. Such solutions require market information to be available to electricity consumers at all times. For utilities, digitisation offers an opportunity to save costs in many parts of their operations be it in the control of their infrastructure via sensors, in billing processes, supply chain management, or in their internal accounting and human resources organisation. Digital peer to peer platforms link assets to the users of the platform; car usage, houses or solar power units by leveraging blockchain technology, enabling sustainability and transparency. The projected evolution of blockchain technology, for example, parallels three phases of development: i) the deployment of cryptocurrency as an alternative to other digital payment systems, ii) phase two extends the use to smart contracting and more complex financial transactions such as mortgages and property exchange iii) deployment in big data and predictive task automation. Use cases in the energy sector focus on similar value propositions as in banking: removing the need for an intermediary between two parties. Start ups offer smart contracting and seamless charging systems. One start up enables remote payment for electricity poor areas. These local initiatives will develop into global platforms able to perform more complex transactions and services such as energy analytics and benchmarking or even real time asset valuation. Use cases will emerge across the entire value chain: decentralised generation, P2P trading, grid management, mobility, billing, security and metering or data transfer. This illustrates that digital technologies will not only lead to process optimisation for the energy sector, but also to platforms and markets through P2P networks of prosumers and a B2B markets with demand management and virtual power plants, both requiring an aggregator to transfer these capabilities to markets. The speed of adoption will depend on three factors: the efficiency gain in any individual transaction (competitiveness versus other technologies), the amount of transactions being performed (market potential), as well as customer acceptance.
Digitalisation of the energy sector will lead to abundant, more accurate data that is available faster and better connectivity of all elements in the power system. This will enable optimising the design, planning and operations of assets in wind, solar, transmission, distribution and the use of electricity in society. General access to data also leads to more competition and the acceleration of innovation.
When looking at the oil & gas sector some important trends can be observed: i) demand shift through electrification and sharing of personal transport ii) evolving green and affordable energy inputs iii) scrutiny of GHG emissions and response iiii) scrutiny of water usage and safety iv) digital as an innovation lever. Key challenges of the oil & gas sector are in distance, logistics, complexity, people shortages and demanding skills sets. Some digital technologies that can be deployed against these challenges are: autonomous systems and driverless technologies on road and in air, additive on site manufacturing, visibility of field assets through IoT for preventive maintenance and locating stuff, information delivery through wearables for safety, two way communications for advice and peer coaching, asset sharing platforms to address high costs assets with spotty utilisation. Innovation do not come out of thin air but arise through combining existing technologies and business models in new ways to meet an existing or new need. The trends and technologies described here take incumbent energy players outside charted territory and require managing system level change. Identification of best practices and novel ideas, experimentation with new business models and scouting of technology are some of the ways Clean Tech Delta can partner with you to chart the digital future.
Fred van Beuningen