Decarbonizing The Electricity Industry

Vice President Network and Edge Group, General Manager Industrial Solutions Division at Intel Corporation.

The world’s leading energy companies have enormous talent working on decarbonizing the planet. Decarbonization is particularly critical for power generation, transportation and other industrial sectors, accounting for more than half of global greenhouse gas emissions. Driven by the continued reliance on fossil fuels, we should not underestimate the challenge of turning around a global energy ecosystem, now 150 years in the making, nor should we be intimidated by the size and scope of the current climate challenge.

This impending digitally driven transition will require reimagining the entire electricity business, including generation, transmission, distribution and behind-the-meter power generation at customer sites. At a high level, technology strategies will include enhanced computerization, secure connectivity and power storage at the edge of the grid. To be effective, these strategies require replacing closed, proprietary systems with flexible, interoperable systems and must enable innovation, enhance competitiveness and increase business value.

Another component of this transition is the vital “greening” of generation and increasing the demand for it. In the U.S., electric utilities and power developers have ceased building coal-fired power plants in favor of interim gas-fired plants and renewable energy platforms, like wind and solar. In 2020, renewables accounted for nearly a quarter of all electricity consumed in the U.S., second only to natural gas. These trends are detailed in the EPA’s Global Greenhouse Gas Emissions Data report and suggest that in the next five years the vast majority of the planned electric generation projects in the U.S. will be renewables. The lessons learned in the U.S. or other developed countries will be transferred to underdeveloped areas to address this global issue.

How are investors and key stakeholders responding to this transition?

I believe investors are playing an increasing role in decarbonization efforts worldwide and key stakeholders are sharply cutting back on high carbon fuels, like gas-fired power plants, in favor of more renewable energy-dominant portfolios. By the end of 2020, major banks, insurance companies and asset managers of pension, mutual and private equity funds were directing capital toward more environmentally responsible investments. This capital is expected only to grow and already accounts for $130 trillion of assets under management.

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At the moment, this “rush to renewables” is mainly coming from developed countries. At the same time, much of the developing world still relies upon coal-based energy, often because it’s locally available, plentiful and inexpensive. Decarbonizing the electricity supply in the developing world is also linked to the developed world’s willingness to financially support a global shift away from coal and toward low-carbon and no-carbon fuels.

How and why is decarbonization an urgent matter for utility partners?

In the decades leading up to this transition, utility executives have focused on modernizing an aging infrastructure. They have now identified the integration of renewable generation into the grid as a top concern. Although an amazing feat for its time, yesterday’s electrical grid was a unidirectional schema generating and delivering power from central power stations to homes and businesses. Today, the electric grid is being transformed into a dynamic, bidirectional electric superhighway where electrons flow from a wide variety of power sources to homes and businesses and back again.

This is a case in point for digitizing the grid.

Utility companies are on a path to digitize their grids, implementing virtualization technologies to modernize their grid operations through substation automation and control. These companies are at the forefront of addressing climate change, air pollution and reducing greenhouse gas emissions. To achieve these goals, utility companies need to harness the power of data, analytics and machine virtualization to make the grid safer and more reliable for customers.

For utility companies, realizing a transformed grid that enables improved performance and reliability demands taking a vital first step to replace closed, proprietary systems with flexible systems that can address the inherent inefficiencies of the legacy electric grid. When systems are flexible and interoperable, utilities will be able to work with a range of vendors supplying standard, off-the-shelf systems and a range of software applications vendors rather than being forced to stockpile replacement equipment from specialized equipment suppliers.

Advancements in the automation of the electric system can also create safer working conditions by reducing the number of trips and type of work done at substations as utilities will be able to upgrade or deploy new applications remotely. Further, advanced technology provides utilities with better situational intelligence into the health of their power network, enabling predictive maintenance to avoid costly failure scenarios.

How are companies (already) leading this energy transition?

Industry leaders are working closely with utility companies to develop technologies that maximize the utilization of renewables from the edge of the grid by deploying micro-data center infrastructure for flexibility, resilience and secure grids that readily adapt to changing utility requirements.

Artificial intelligence (AI) and data-driven technologies would allow the utilities to gain deeper insight into grid operations. Utility operations have layers of applications that have been added over time and do not always work cohesively. Among other challenges, the Internet of Things generates valuable data that must be captured, stored and analyzed to make informed business decisions and sustain complex network operations.

Software-defined technology that consolidates many applications into a single platform helps integrate new workloads from a range of application providers like distributed resource management at the edge of the grid. These platforms enable self-learning control systems using machine learning/deep learning technologies to forecast the impact of renewables on the grid, help utility companies balance generation with demand and increase the utilization of renewable energy at the edge. These platforms also help utilities reduce the number of devices in substations, thus reducing both capital and operating expenses for utilities.

Digital technology, decarbonization and decentralization of energy sources are three trends that are inextricably linked as defining features of the transition to a greener, more sustainable outlook for humankind.

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