By David Goddard, head of digitalization at Hitachi Energy
Global electricity consumption will account for more than 40% of the total energy demand by 2050, with some regions of the world expanding well beyond this level. At the same time, there is a growing urgency to adopt and reach zero carbon emissions to improve air quality and slow the effects of climate change. As the energy demand grows, sustainable energy sources are needed to generate electricity powered by a sustainable power grid.
The need to integrate renewable resources into the power grid is adding layers of complexity to energy acquisition and distribution models. A fossil fuel-based system taps large, centralized, and predictable stores of resources, then allocates them based on consistent and predictable usage. With renewable resources, energy supplies are drawn from increasingly decentralized, disparate, and distributed resources that fluctuate in their ability to fulfill demand. As more renewable resources are adopted, the process will become much more complex and variable.
The adoption of electricity — as opposed to fossil fuels — for powering industries is accelerating. This transition presents both challenges and opportunities for everyone. And success depends on the availability of a digital power grid that is reliable, efficient, and sustainable.
Energy management that supports a changing power grid
In the energy industry, supply and distribution are becoming more digitalized and decentralized. This distributed operations model relies on real-time, data-driven analytics and automation to make intelligent decisions fast.
Managing the power grid that supports this energy supply requires the combined expertise of both information technology (IT) and operations technology (OT) teams. The lines between IT and OT have blurred over time, and digitalization has accelerated this convergence as data is collected, analyzed, and shared across systems and organizations.
As a result, the historical lines between the CIO and the business are also blurring. The CIO is becoming the governance authority, as the business relies on the IT function to deploy and manage the technology that solves operational problems. In the interdependent, digitalized environment of the sustainable power grid, a partnership between IT and OT is essential.
Data-driven innovation fuels long-term success
The convergence of IT and OT will result in data-driven innovation — the ability to integrate data streams from multiple sources to enhance outcomes or identify new ways to optimize or evolve the business. This ability is fundamental to the development of a sustainable power grid.
The availability of renewable energy sources can be inconsistent and difficult to predict. Yet utility providers, and even some industries, are chartered with ensuring that there is always enough supply to meet demand. In this highly dynamic environment, companies must be able to work across boundaries, manage diverse regulatory requirements, and access the data to make the best business decisions. Reliability, efficiency, and sustainability depend on sophisticated data analytics and support systems capable of managing energy input and output.
Same business, new business model
Electric vehicles (EVs) provide an excellent use case. The widespread adoption of EVs is already challenging utility companies and fleet providers to enable a robust electricity distribution network for battery charging that can keep these vehicles up and running, wherever they are.
At the same time, changes in energy management in submarkets — microgrids, local communities — are creating an opportunity for new business models that can generate additional revenue. For example, EV fleet managers will need to understand how to optimize power to charge their fleets. This is based on several factors: where the vehicles are going, when to purchase power based on market price, if they should maximize the power they store, and what to do with any surplus power. This could present new business opportunities in which the surplus can be sold to create new revenue streams.
These dynamics will change the nature of the market. For the power company, it can be either a huge opportunity (if the fleet company is consuming more electricity) or a significant risk (if the fleet company uses the power it’s storing to participate in a disruptive market). Either way, the more detailed data companies have, the greater their ability to serve current customers, innovate, and create new revenue streams.
Bringing the full power of Hitachi to electrification
Hitachi is helping companies meet the challenges of the sustainable power grid through a platform approach that leverages the full breadth of Hitachi companies to address four key components: reliability, cost reduction, optimization, and adoption of electrification.
We’ve developed solutions to enable better business outcomes in all of these areas.
For example, our asset performance management (APM) solutions pull data from assets to identify their current performance, life expectancy, and risk of failure. When organizations have this essential and accurate information in real-time, they can make better informed and proactive decisions ― leading to greater reliability, reduced costs, and increased life cycle value of their assets. By codifying current processes, we can help our customers implement automation to optimize those processes, a capability that is especially important in these times of limited workforce mobility.
At Hitachi Energy, we break down data silos to provide information and actionable insights based not on function but on how the organization wants to use the data to enable electrification. APM is the starting place, providing the opportunity to maximize the return on assets currently in operation. Imbued with artificial intelligence (AI), APM enables organizations to quickly make decisions based on historical data, automatically act, and automatically optimize processes — these are all phases on a journey toward autonomy.
Digitalization is the path to the sustainable power grid
We predict that the adoption of electrification is going to be a megatrend. Electricity, not fossil fuels, will become the backbone of the energy industry. And digitalization is the enabler of all the megatrends across the electrical space.
Digitalization offers opportunities to optimize legacy processes and adopt approaches that change operational processes in both energy production and distribution. It allows organizations to host more disruptive technologies such as solar and wind and make data-driven changes to balance the grid and drive reliability. By leveraging data-driven innovation, organizations can apply analytics based on data from technology, including the Internet of Things (IoT), AI, and machine learning to fuel better decisions and optimize processes.
Converging to power good in the world
Digitalization in the energy industry is an IT and OT problem. Finding a partner who has expertise in both is key, and Hitachi — with Hitachi Vantara’s industry-leading IoT capabilities and big data expertise and Hitachi Energy’s deep operational expertise and digitally native technology — is one such partner.
We’re helping to drive the next big revolution in managing energy: The full adoption of electrification across crucial sectors, including railway, urban transport, commercial fleets, and mass transit systems as well.
There are many worldwide benefits to be gained through the move to electrification, including:
- Reducing and eliminating carbon emissions.
- Allocating power where it’s needed, when it’s needed, in the most cost-effective manner.
- Efficiently transporting energy to strengthen access to renewable sources.
- Creating new markets and increasing localization of markets, which will lead to new business opportunities and new jobs.
- Supporting accessible, carbon-free energy to promote social equity and business practices that lead to a sustainable environment.
Hitachi is balancing social, environmental, and economic values to power good through a sustainable energy future. We are a logical partner of choice for enabling a reliable, efficient, and sustainable power grid.
Learn more about Hitachi Energy.
This post was created by Hitachi with Insider Studios.