energy evolution

This Year's Power Trends

  • Why it matters

    Why it matters

    Mr. Bolze thinks a series of major changes set for the industry this year are primed to help electricity reach more people and at a lower cost than ever before.

  • Facts

    Facts

    • Germany aims to cut greenhouse gas emissions by 40 percent by 2020 and up to 95 percent in 2050, compared to 1990 levels.
    • Germany’s government-mandated switch to renewables has led to numerous, swift changes in its energy landscape.
    • Worldwide more than 1 billion people lack reliable access to power.
  • Audio

    Audio

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Cuban Wind Farm
Winds of change are blowing the energy business in a new direction. Source: Getty Images

The power industry has been undergoing its greatest transformation in nearly 200 years, and in 2017 I believe that the transformation will accelerate. Many factors are driving the change, such as increasing demand for renewables alongside lower costs, ever-expanding capital needed to maintain ageing infrastructure and new ultra-efficient power-generation technologies.

This transformation will force the power industry to develop new approaches we haven’t seen before. Whether it’s distributed generation in island nations, microgrids in the Himalayas or more flexible and efficient central generation, the power outlook for the coming year is all about modernizing infrastructure in one way or another. What we’ve seen in 2016 is that one common thread links everything together: digitization.

These are the five trends expected to transform the world of energy and electricity in 2017:

Firstly, digital power will go mainstream. A single percentage point of efficiency gained in power generation represents billions of dollars in savings and fuel. We can’t ignore the value here, and our customers recognize it too.

Digital is a defining factor in improving efficiencies, reliability and reducing costs for the power industry. Growth in our industry will rely not on a single product or service in 2017, but on digital industry platforms redefining what’s possible in power generation and the energy ecosystem. The combination of these new platforms alongside smarter data analysis can solve complex energy issues like never before.

We must take action now and support this huge challenge rather than play catch-up later, and 2017 will be a pivotal year.

Second, we must support the electrification of things. Cars, planes, appliances, industrial processes – these are all things that can be more efficient when powered through modern generation technologies. And they will become more accessible to consumers. The number of electric vehicles, for example, is expected to more than quadruple through 2025.

Where will we find all this additional power supply for the electrification of things? We must take action now and support this huge challenge rather than play catch-up later, and 2017 will be a pivotal year for the power industry to play an active role.

Third, there will be more support for renewables adoption with more efficient, flexible plants. In June, I wrote about the most efficient combined cycle power plant in the world and how it will help solve tomorrow’s energy needs. The plant, located in France, is just the start of a bigger trend towards the need for larger-scale power plants (traditionally used as baseload power) to help stabilize the grid, as more and more wind, solar and similar renewable technologies are added globally.

More than one billion people still lack reliable access to power.

A fourth trend will be upgrading infrastructure instead of replacing it. Globally, power grids have needed upgrades for quite some time, but the type of overhauls they need cannot be achieved overnight or by outright replacement of older technologies. Worldwide, the loss of electricity output is high, unexpected downtime costs $10 billion in lost production, and 40 percent of abnormal events can be attributed to operator error. This makes delivering upgrades all the more urgent, both through hardware modifications and digital solutions.

Thankfully, there are ways for power producers to stop the losses, such as adding sensors to predict future maintenance, optimize efficiency, reduce costs and boost output. The trend towards digital upgrades got a jumpstart in 2016 – notably with Exelon’s adoption of digital solutions across 32+ gigawatts of power generating facilities – and it’s going to really take off in 2017.

Powering everyone is the fifth trend I predict. More than one billion people still lack reliable access to power, creating imbalances that in turn impact prosperity, social stability, health, safety and education. As an industry, we need to drive growth and provide equal access to power. It’s a basic human right. There is still a lot that needs to be achieved to “power everyone”, but as we head into 2017 we are working to bring more global engagement towards rural electrification and using electricity as a means to spur global economic growth.

These trends will govern our strategy and the investments we make as we move towards a more inclusive and sustainable energy future for all in 2017. And digitization won’t only impact the transformation of the energy industry, it will impact all industries as we collectively learn how to embrace the true potential of the industrial internet.

 

To contact the author: gastautor@handelsblatt.com

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