In this Perspective, we explore how the power industry, enabled by digitalization, is unlocking social, economic and environment value that underpins our sustainable energy future.
Delivering affordable, reliable, sustainable and modern electricity to all means driving for efficiency whilst consuming less of the world’s resources. This is an important social, economic and environmental objective at the heart of the strategies of the most responsible governments and companies today. In response to the major global trends shaping our planet and society – from climate change action to mass urbanization – the way we produce and consume energy is undergoing a phenomenal transformation.
Decarbonizing our energy system means delivering changes across the value chain. We are witnessing huge shifts to zero-carbon power generation and electrification, along with new patterns of energy consumption. In addition, the surge in e-mobility and development of smarter buildings and cities.
The global share of renewables has grown exponentially, and the International Energy Agency recently forecasted 167 GW of renewable capacity will become operational in 2020 – doubling that added ten years ago. Most of the grid’s large-scale renewable power plants are still connected at the transmission level. Nevertheless, the need for greater resiliency, a combination of price/performance improvements in technologies (such as solar photovoltaics and battery energy storage) along with favourable government policies and regulations, is driving the decentralization of our energy system.
|“The continued decarbonisation and decentralization will require tighter integration of transmission and distribution networks, and higher coordination of generation and consumption to achieve the goal of sustainable energy. Digitalization will be one of the most important enablers and will span across the whole value chain, from real time control, to operation and maintenance, to energy markets and customer engagement.” – Massimo Danieli, Managing Director of Hitachi ABB Power Grids, Grid Automation Business Unit.|
Transforming how we power the world
Digitalization is fundamentally about the journey towards more autonomy. Creating incremental value through the transformation of an end-to-end business process, optimizing or automating as the situation requires to ultimately change the way you interact with your customers. Leveraging widely-deployed sensing, vast amounts of data and advanced analytics, the digitalization of the grid will drive improved reliability; by highlighting events that may lead to failure; predicting when critical assets will fail; and swiftly guiding the right people to the right place, and equipped with the right information to resolve them. It will allow us to simulate what will occur during events with greater levels of accuracy, informed by big data and analytics. The sharper insights and flexible control enabled through digitalization will allow for new business models, for example the development of transactive energy markets or peer-to-peer energy trading.
Digitalization – enabling greater autonomy to unlock more value
As the industry digitalizes more and more, together, we can cautiously move along the path towards greater autonomy. And by digitalizing across the whole value chain, everyone can better optimize the way of working, planning, building, operating and maintaining the businesses of tomorrow. The better this is implemented, the greater the economic and environmental value achieved.
 Renewable Energy Market Update Report (May 2020), IEA
As a consequence of the accelerated drive for decarbonization, decentralization and digitalization, the rate of change in energy and asset-intensive industries is exponential compared to past decades. However, with change comes the challenges of increased complexity and potentially decreased stability.
Adapting to the ‘new norm’ and seizing the opportunity
As society adapts to the ‘new norm’ and businesses adapt to a pandemic-shaped world and the looming global recession, we have witnessed an accelerated drive for innovation. Standing still is no longer an option and innovative solutions are needed to flexibly adapt and compete in an ever-changing world. Just one small example, taken from Hitachi ABB Power Grids Ltd. own experiences, relates to remotely enabling the installation and commissioning of Live Tank Breakers for a substation in Russia from 3,500 kilometres away. By evolving the way we work, combined with leveraging advanced digital technologies, it’s possible to optimize how we do things – increasing efficiency and sustainability, whilst delivering customer value.
According to the IDC’s FutureScape Predictions Report: Worldwide IT/OT Convergence 2020 Predictions, ‘By 2022, a 10% improvement in asset utilization will be enabled by a 50% increase in new industrial assets having some form of artificial intelligence (AI) deployed on edge devices.’
Fuelling efficiency through the Industrial Internet of Things (IIoT)
Industrial IoT is increasingly being used to remotely implement safety and security strategies, improve collaboration across teams, and manage important infrastructure assets and equipment. The introduction of IIoT will help reduce costs, maximise the value and lifetime of assets and perhaps most importantly, drive improved end customer value and engagement.
Whilst concerns around cybersecurity have historically slowed adoption, there is a growing need to overcome the barriers. With a philosophy to ‘design-in’ cybersecurity from the ground-up in products, tools and processes and the adoption of standards-based cybersecurity technology, it is possible to reduce and manage the risk to acceptable levels. As an example, for customers using fiber optic networks for mission critical communications, the most advanced multiplexers now feature encryption with quantum technology – using true random number generation – providing extra security to repel access to unauthorized actors.
The ‘digital divide’ and sustainable competitive advantage
There is an emerging ‘digital divide’ in the energy sector. Across the world, we are seeing the power industry players, who are investing in digitalization today, are leveraging a clear and sustainable competitive advantage derived from increased flexibility and cost efficiency.
While most industry players have begun their digital transformation journey, they are in very different places along the adoption curve. However, one thing is consistent – the successful companies that manage to leverage data, also generally improve the speed and agility of their decision making.
"The measure of intelligence is the ability to change.”
One shared challenge commonly facing the industry is that even with significant amounts of data, it often remains siloed across many different systems and data structures. The answer is again digitalization combined with change management – the latter being a separate topic. Today’s most advanced software applications offer complete flexibility in the way that data is accessed. Instead of extensive efforts to integrate systems, the data remains in place and a very agile data fabric utilizing ‘reusable connectors’ facilitates more flexible access to the data. Enabling simplified access to the underlying systems and a modern modular architecture with a microservices based design, brings information to the fore from various underlying systems and through a single ‘pane of glass’ with a role or use-case driven interface.
Digitalization is enabling connectivity and visibility across previously siloed departments, allowing employees to take timely action, with the right information at their fingertips, thus making organizations more agile. It also opens up new opportunities, enabling faster innovation and breakthroughs in efficiency via process optimization. And by codifying and automating indispensable institutional knowledge, digitalization can help strengthen business continuity.
Now is the time to accelerate the digitalization of energy
Accelerating and deepening the digitalization of our whole energy system will contribute towards greater social, economic, environmental value – that underpins our sustainable energy future. At Hitachi ABB Power Grids, we are committed to driving customer value through digital transformation, co-creating pioneering technologies, which help to increase efficiency, productivity, agility, autonomy, safety and security. It is well understood that true insights in the performance of power systems come from a combination of Digital and Energy engineering expertise. The convergence of IT and OT has never been more important – now is the time for action.
This Perspective has been written by leaders in their own words prior to us becoming Hitachi Energy.