Energy management: is digitalisation the latest energy buzzword?
25 June 2018
Stephen Goldspink Director of Strategy and Business Development, Siemens
As buzzwords go, digitalisation seems to be here to stay. It’s the catalyst for Industry 4.0 (another buzzword) and AI, and there’s an app for almost everything.
But digitalisation is just one small part of the huge transformation in the energy sector.
Decarbonisation and limiting the emissions released from energy generation has had a profound effect on today’s energy system. It’s seen a move away from centralised to decentralised power, with more than 20 per cent of the UK’s electricity coming from renewable sources.
These three areas of decarbonisation, decentralisation and digitalisation all lead to democratisation. An intelligent energy system which you can control. But this isn’t just a set of buzzwords for the network operators – it can also work in an industrial setting and needs to grab the attention of senior business leaders.
While planning an energy system for a future that looks uncertain and is ever-changing can be challenging, it creates a real opportunity to move to a more cost effective, self-sufficient and agile power system, which meets individual needs while also reducing carbon emissions.
Whether it is having onsite generation to be more resilient, feeding the energy consumption data into a cloud-based system for analysis or implementing building technologies to control how much energy is used, it will all help you make informed decisions.
Siemens has partnered with Keele University to develop a smart energy network demonstrator project. This living lab will give data which can be scaled up or down to help cities or industrial customers create an intelligent energy network so they become more efficient, resilient and reduce cost.
Recognising the potential that more intelligent distributed energy resources can have will form a significant part of the whole decarbonisation journey. While digitalisation may be a buzzword, it is also the enabler for a more dynamic and intelligent energy system.
Understand how Siemens can help you find better ways to define, manage and forecast your energy needs.
Welcome to Business Reporters UK 2030 campaign. The World Economic Forum estimates that if it fully embraces digitalization, the electricity sector could unlock $1.3 trillion of value thanks to improved operational efficiency. However, in a survey conducted by independent market research specialist, Vanson Bourne, more than half of the power generation companies agreed with the statement that digitalization is just a buzz word and not here to stay.
With, me in the studio is Steve Goldspink, Director of Strategy and Business Development at Siemens, to talk about why digitalization can be the silver bullet for both energy providers and users. Good morning.
Could you give us an idea of what the energy sector is going to look like by 2025 in an ideal scenario?
In an ideal scenario the UK energy sector will be well on the way to transitioning towards a more low carb, and much greener, energy sector. By 2025, coal will be off the systems. They will no longer have any coal fired power stations in the UK. And we will see a much wider usage of renewable technologies. But to transform any sector we have to realise that power accounts for about 20% overall energy consumption. About 30% comes from transportation, and the other 50% is heat.
So we really have to get serious about how do we electrify transportation. Hence, the government setting targets around e-vehicle uptake, and a big challenge is around electrification of heat. Electrification isn’t the only answer, but it will play a significant role in shaping the future energy sector.
When it comes to decarbonization, you mentioned that. But what other challenges are though, in the energy sector?
Another significant challenge is decentralisation. In the old system– which we call centralised– where we had lots of very large power stations and quite predictable load, then the system was fairly straightforward to manage and balance. As we move towards more small scale, renewable power generation plants, the whole de-centralization makes the energy system far more complex and difficult to manage.
We have a much more complex energy sector. How do you regulate that for the benefit of consumers? The other one is about technology costs we’ve seen solar technologies come down in cost quite a lot– the same for wind. We’re now seeing energy storage technologies come into play in the energy sector. How fast will those costs start to come down?
Could you explain how digitalization is going to enable and empower customers in the future?
Digitalization is about generating data. It’s about senses, it’s about connectivity, which give us data. Our networks traditionally– they have areas of the networks which don’t really have intelligence embedded into them. There’s no automation. We have to have the ability to control the system and be able to see, and make sure that system is visible. So data drives the ability to control.
It drives information around consumption and allows those as domestic consumers to see how much we are consuming through things like smart metres. But it also allows us to optimise the system overall. How do you access latent capacity in a network system? How do you help an industrial customer to actually access some of the capacity he has within his own system? And it will drive a far more intelligent system going forwards.
You talked a lot about decentralisation. How is that such an important part of the solution to this energy challenge?
So decentralisation is quite critical to the future of the energy sector. Decarbonization is about moving away from the old, moving away from coal fired and to a degree gas fired power plants. That naturally lends itself to more renewable technologies. And these are technologies that can be deployed at scale– such as offshore wind– but could also be deployed at a domestic level and an industrial level. This is demand side solutions, not just supply , side large scale type solutions.
Perhaps you could give us some examples of how you at Siemens have been involved in some of the solutions where it’s actually already paying off.
One of the exciting things about work for Siemens is that we have a very broad portfolio and breadth of capability. And we’re developing a smart energy network demonstrator with Keele University. It’s a fascinating project. It brings into play all the things we’ve talked about– decarbonization, Asian decentralisation, and digitalization. We are fully digitalizing 24 substations. That’s really embedding intelligence and automation so that we can better control those substations based on demand and needs of the campus.
We are installing 1,500 smart metres and 500 home devices so we can start to monitor the behaviour and consumption patterns of the residents of the campus. And we are also integrating five megawatts of renewable technologies. So it will also be a living lab for students, so they will be experimenting. And I’m sure will take some learning from that.
A second project were working on is Triangulum. This is a project with the city of Manchester. It’s a European Horizon 2020 funded project, so we will be working with all the cities around Europe. So will be transferring and learning that we get from those different projects. And this is all about how do you make a city fit for purpose in the future. There’s three elements to it. It’s about mobility, information and communication technology, and energy.
Siemens are leading on the energy project, and we’re going to be deploying building energy management systems to really manage the building intelligently. We are installing battery storage as part of the project as well, and we’re connecting our existing energy assets. That’s all going to be fed into a cloud based energy management system– basically a virtual power plant. It’s all about how do you use existing new energy assets to really create a more agile and flexible energy system in the future.
And interesting, when you talk about new technologies, one of the things which is making huge strides are batteries. But to what extent do today’s batteries impede optimization processes in the sector?
Interestingly, I don’t believe that batteries do impede the process of the energy sector going forward. I think conversely, they only help the future energy system. The sun doesn’t always shine. The wind doesn’t always blow. Battery storage, energy storage will be a really vital part of the energy that’s going forwards. It’s enables flexibility. It can help with security of supply. It’s fast acting, so it can really help to smooth out and support the energy system and the balancing of the energy system. So all in all, I think it plays a critical role in actually improving the processes going forwards.
We’ve talked a lot about the energy markets, the changes, the developments. If you could sum up everything we’ve been talking about today into maybe three key takeaways that generators and providers could use, what would they be?
Firstly I would say that we need to be optimistic through decentralisation, and enabled by digitalization, breakthrough technologies. I really do believe that a low carbon energy sector is achievable. Secondly, the energy sector is a vibrant and interesting sector to be involved in but it is going through a significant transition. And thirdly, Siemens can help to play a significant part in educating what are the options for a future energy system, and really helping to deploy those future energy systems– be that at a domestic level, industrial level, or national level.
A lot of change to come in the market, and it’s evolving at such a rapid pace. It’s fascinating to find out more about what’s going on– the technologies available– but also to get a little bit of a glimpse into the future, as well. Steve Goldspink from Siemens, thank you very much, indeed.