Take-Aways of the Future of Energy Summit 2018
Six Take-aways of Future Energy Summit
The Bloomberg New Energy Finance (BNEF) - Future of Energy Summit was held on April 9-10, 2018 in New York. Since its inception in 2008, the Summit has featured a unique convergence of traditional players and advanced-energy leaders, creating an environment for making new connections, and serves as a forum to discuss the critical energy issues of today and the next decade. As part of this Summit, BNEF announced its New Energy Pioneers, which are “innovators that are revolutionizing the energy, transport, and technology sectors.” This year, BNEF’s winners were deemed to be innovators in response “to changes and disruption in the energy system, and are pursuing new opportunities in areas as diverse as storage, EV charging, digitalization, heat recovery, and blockchain.” It is obvious that the summit is a huge networking place - from the business as well as technology perspective - for Energy Biggies, Investment Moghuls and the scientific community. Here, we post a few interesting take-aways for the smaller businesses and of course the common man, who are probably not into saving the world from climate change, but definitely enthusiastic about a greener economy!
American Coal Plants: How Long Can One Outlast The Other?
The demand for electricity in the US has basically been flat for the last 10 years. The market is not growing. Hence, it is obvious that anybody who has a piece of the pie will do anything to maintain the status-quo. Add to it the fact that the economics of the existing conventional fleet just doesn’t work. Coal plants are not making money, more than half are in the red. Same with the nuclear plants. So it is not about - Will they be taken out? It is all about - how long can one outlast the other? In the end, they all have to go.
China is Half of Everything!
Europe was the first to adopt mass renewables. Today, the market in this continent is well past beyond its infancy, dealing with the complexities of market development in keeping with fluctuating demand and prices. Germany generates 22% of its energy from solar and wind, Spain and Portugal - about 25% and Denmark is currently leading with 47%. Looking into the future, whom do we predict to lead the global marker? Not Europe! As in 2017, China has 40% of the global investment in clean energy. In fact China is half of everything - global steel production, aluminum production, electric vehicle sales, Li-ion battery capacity.
Machine Learning - The Big Breakthrough in Data Analytics
Innovations typically fall into two categories. The first is the big breakthrough - the invention that can change an industry. The second is the associated ecosystem - the network of technologies - around that invention that can help it reach economies of scale and pull prices down. For example, the solar industry. The photo voltaic (PV) cell and the solar panel were amazing innovations. However, without the support ecosystem that includes silicon supply chain efficiencies, inverter manufacturing, effective leasing models and installation process automation, it would not have seen such a major adoption that has transformed our energy industry today.
One of the recent breakthrough innovations is Machine Learning (ML). ML is a technique to discover trends and patterns in large complicated data sets that are unstructured, to produce insights and analysis. How does ML concern the energy industry? It can promote productivity, can elevate energy efficiency in the grid and power plants, limits labor costs and promises to almost irradicate shut down maintenance payments. It can transform complicated consumer patterns and trends into analysis. Many companies including utilities have data sets they do not want to collect because they are complex and expensive and have no value. ML potentially can help turn that [data] into a useful commodity. However, the ecosystem that supports this innovation is absolutely necessary for it to make the big splash!
Electric Vehicle Adoption Needs Policy
In more and more countries, EV sales are crossing the 1% threshold of total sales. 1% is pretty small, but what is interesting about this ‘1%’ is the fact that after reaching this threshold, most EV markets climb higher very quickly. Example – Norway; just four years to get from 6% to 39%. Lot of it is driven by very generous incentives from policy makers, which in fact, are hard to maintain as sales percentages grow – a major reason for why many EV markets just don’t climb into two digits. Policy mechanisms supporting the industry need to suitably change as sales volume grow. Norway, with continuously evolving ‘Zero Emission’ incentive program since early 1990s, is a good example of how its government has induced customers to choose an EV over a fuel-burning car.
The Future of Natural Gas
We know that natural gas is better than Coal! Burning natural gas produces nearly half as much carbon dioxide per unit of energy compared with coal. And with the discovery and boom of U.S. shale, natural gas is plentiful and cheap. Well, there is a challenge! Gas is tricky to transport from the often-remote fields where it’s found to where it’s needed. In many places, pipelines simply aren’t practical. The solution? Turn the gas into a liquid by super cooling it to -162o C (-260o F). Liquefied natural gas, known as LNG, can be loaded on ships and transported around the world. This high-tech process has transformed natural gas into a more freely traded commodity with the potential to reshape the politics of global energy. The future of natural gas is uniquely placed to facilitate the necessary transition from our coal-dominated, carbon-intensive present to the low-carbon future that eventually humanity has to adopt, as a survival mechanism.
2025: Digitization and Renewable Energy
Digital technologies for fossil fuel operation and maintenance are big business today, but activity is shifting towards services for distributed renewables and the connected home. BNEF predicts significant shifts in the intelligence of digital technologies used in energy from today to 2025. Today, the biggest use of digital technologies like sensors, data collection and analytics in the energy sector, is to improve the bottom line of fossil fuel generators. Revenue for digital services for fossil fuel operation and maintenance are estimated to be $24 billion in 2017 – about 44% of the total market size for digitalization. However, as natural gas and coal plants come offline, these revenues will decline and the digitization industry focus totally will shift to renewable energy. By 2025, digital technologies will be more intelligent and more capable.
Digital technologies like big data, analytics and machine learning, blockchain, distributed energy resource management, and cloud computing, can help overcome some of the key challenges in the energy sector – most notably intermittency, aging grids, balancing distribution-connected generation, managing consumer self-generation, and coping with increasing system complexity. It can even help home owners that own rooftop solar, batteries or EVs to become more autonomous and even trade with neighbors! Better get on board!
No singular path or technology will help deliver the desired result of sustainability. It is a mix and match of these discussed here and many more, that will put communities and countries on the road to impactful sustainability.