Opinion - 26/November/2018

Coming soon: the all-electric energy world

If we don’t electrify more, we won’t reach our decarbonisation goals, says Ralf Christian, CEO of Siemens Energy Management Division

Generating clean electricity from renewable resources is vital to reduce carbon dioxide emissions and with the right technology, services and business models, an all-electric energy world will become reality sooner rather than later, says Ralf Christian, CEO of Siemens Energy Management Division

 

The world is facing enormous challenges. The global population is growing rapidly and is predicted to reach some 11 billion by the end of the century, from about 7.6 billion today. And still, one billion people don’t have access to electricity. The need for electric power worldwide is intensifying rapidly. Around 25 years ago, we were talking about a 10,000 terawatt hour (TWh) power demand. We surpassed 25,000 TWh in 2017 and 40,000 is projected for 2040. But because conventional energy resources are limited and burning fossil fuels is seen as the main cause of climate change, we need to reduce our dependence on fossil energy resources, while increasing production.

Technology will help us tackle these challenges. Our vision is an all-electric world because electricity is the most practical form of energy: it is easy to deliver in multiple sectors and flexible with regard to the variety of generation sources. Electricity will be in high demand as an energy source in the future as we see the increasing electrification of many different sectors. This revolution is also being driven by the desire to drastically reduce global carbon dioxide emissions. While this vision isn’t yet reflected in today’s reality, we’re seeing the growing electrification of the heating and cooling sector and of traffic and transportation. We can argue about exactly when this scenario will be fully realised, but it will be sooner rather than later. And this far reaching transformation will demand the full attention of the entire industry.

We can expect major changes at the distribution level in particular, where many new electrical applications are emerging. More than 130 million e-cars are predicted to be on the road worldwide by 2030. If we jump ahead three or four years, we’re going to have a choice between more than 100 different fully electric vehicles in Europe alone. The heat pump market, especially in residential areas, is also expected to grow yearly by about 6% from 2015 to 2021.

Electricity is an extremely versatile and efficient energy source for everything we need for a modern and decarbonised society, and storage will play an increasingly important role, from small applications at home through mid-size and up to large-scale grid systems. It’s not surprising that the grid-connected battery sector is estimated to grow 16-fold by 2025 compared with 2016. In addition, millions of prosumers will be feeding in solar power, in particular into the low and medium-voltage power grids. The energy system of the twenty-first century will combine several sectors into one overarching system, and we’re heading toward a prosumer-centric all-electric energy world.

 

 

 

 

 

Digitalisation is the magic word

This new energy world will only make sense if most of the power produced is clean electricity generated from renewable resources. The increase in fluctuating power feeding into the grids will be challenging. Take Germany, for example. What if the wind is howling along the northern coastline, but electric power is mostly needed in the heavily industrialised southern regions of the country? In our future energy mix, the time and place of power generation and consumption will diverge widely. The need to master this complexity and guarantee stable networks is precisely why the electricity grids need to become smarter.

This is our chance to leverage the revolutionary impact of the Internet of Things (IoT) in the energy industry. Sophisticated sensor technologies, internet connections and advanced data analytics will enable increasing connectivity of power supply systems, from buildings to public grids. Intelligent grid devices like smart meters, connected transformers and digital substations will be closely linked to software applications. This multi-layered connectivity is essential for an efficient and resilient power supply as well as innovative services for residential and industrial customers in a decarbonised and decentralised power ecosystem.

Digitalised grids will form the backbone of modern society and will lead to the creation of new business models. That’s why over the next ten to 15 years we’re going to see a huge demand for electrical as well as information technology engineers and data analytic experts in the energy sector.

 

Prosumer-centricity will be key

Several prerequisites and solutions for creating opportunities out of this transition already exist on the hardware and the software sides. Technologies for solar and wind power generation are fully competitive, and we can scale them up from small to mid-sized to large applications. We can use software to build digital models of power systems to answer in advance questions like: “What will happen if we integrate more solar, bring in electric cars or build storage systems at certain locations?” Digital transmission substations provide full end-to-end connectivity of all assets to add value throughout the entire life cycle of the substation. Down at the prosumer level, we can start managing the demand side by building bridges from power supply to power demand — all supported by smart sensors, IoT operating systems and digital applications.

From a technical point of view, the requirements that will empower our modern society to deal with a decarbonised, decentralised and digitalised energy system have already been met. Now it’s about creating and stimulating markets and developing more opportunities for all stakeholders to participate in those markets. Most change, from a governmental point of view as well, needs to be driven on the prosumer side in order to enable new services and business models. Then the system can adapt over time and lead us into an all-electric energy world.


Do you have a thoughtful response to the opinion expressed here? Do you have an opinion regarding an aspect of the global energy transition you would like to share with other FORESIGHT readers? If so, please send a short pitch of 200 words and a sentence explaining why you are the right person to deliver this opinion to opinion@foresightdk.com.

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