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The world’s population is growing – the demand for energy is growing faster. This presents four core challenges for a sustainable energy system: security of supply, affordability, climate protection, and resource efficiency. It will take ingenuity to succeed.
The Whitepaper “Digitalization of energy systems” by Bloomberg New Energy Finance is focusing on how digitalization is shaping the energy industry. The paper examines the current impact of digital assets in the power infrastructure and gives an outlook on future drivers and opportunities in this business field.
In order to meet the sustainability challenges, measures must be taken along the entire energy conversion chain – from the utilization of fossil resources for power generation and transportation to improvements in consumption.
Working on the improvement of energy efficiency always has been a core driver for the industry. And it has made tremendous progress in providing innovative technologies that contribute to the better utilization of fossil and renewable resources as well as generated power. Still, this is not enough to meet future demanding targets.
The energy system of tomorrow will need to produce much lower greenhouse gas emissions than the one we have today. In order to do so, it will have to master a much higher share of renewable energy sources, fluctuating feed-in volumes, and increasingly decentralized production at ever smaller power plants. This will require many different market operators and technologies to join forces, forming a complex power supply system with new business models. So, besides improvements to each part and piece of the hardware along the energy conversion chain, in the future digitalization will be key to running a stable and sustainable energy system and its parts.
Take a minute to listen to the opinions of high-level experts:
Anyone aspiring to comprehend current trends in global energy markets must reckon with the words and ideas of Amory B. Lovins. Over four decades, Lovins has established a reputation as perhaps the world’s foremost authority on energy efficiency and clean energy solutions.
“The oil companies, just like the electric utility incumbents, have to figure out different ways to use their assets, capabilities and, most difficultly, cultures to compete in a very different market,” Amory B. Lovins said in a recent interview at his showcase green home near Snowmass, Colorado. “This change in the market is coming at them at a speed they can scarcely imagine and much faster than their cultures will find it easy to cope with.”
A talk with Richard Lancaster, CEO of one of Asia’s largest power utilities, about climate change and whether energy technology is ready to meet this challenge.
“Ideally, we would have no carbon emissions. But that involves a huge change. Meanwhile, we have the technologies to navigate through the transition. If you look at that transition, you can’t go for a perfect solution all at once. It would take too long.
This is why we will need more gas, more nuclear, more renewables – and a more efficient use of energy. We need to do all of these things”, Lancaster says.
The energy system has never been easy to handle. But with the new possibilities arising with digitalization, it has (and will continue to) become even more demanding to manage a sustainable energy system. At the same time, there will be many more opportunities for more players to participate profitably in the market.
Prof. Jacob Østergaard, Head of the Center for Electric Power and Energy at the Technical University of Denmark DTU, talks about the major trends and the impact of IT developments for market players.
More market participants produce much more data than ever. In a large gas turbine alone, for example, hundreds of sensors measure temperature, pressure, flow paths, and gas compositions every second. And all of them – producers, prosumers and consumers – have to be connected in a smart way in order to enable a stable operation of the Future Energy System. Given that there’s no other way than taking the opportunities of digitalization: State-of-the-art analysis methods are required to ensure this data is intelligently evaluated and utilized.
With a growing and constantly changing range of power generation methods, as well as new developments in power distribution, storage and consumption, the energy landscape is becoming more and more complex. Numerous small producers of renewable energy, for example, supplement the familiar picture of large power plants. This, in turn, calls for “smart grids” to handle fluctuating feed-ins. Let us take you on a journey through the complete energy landscape and its many interdependencies.
The cleanest energy is the energy that isn’t needed. There is a huge potential for energy conservation, especially in buildings, industry and transportation. Saving energy and using energy more efficiently are the two main factors involved in creating a sustainable energy supply for the future. This can be achieved by controlling energy consumption and integrating energy-saving products and solutions in buildings, industry and transportation.
Electric engines account for nearly two-thirds of the electric energy used in industry, for example for conveyor technology or pumps. With optimized solutions, the energy consumption of industrial drives can be lowered by up to 30 percent. Worldwide, about 40 percent of energy is consumed by buildings. Here too a lot can be achieved: through heat insulation and pumps, smart building technology, or efficient lighting.
Today’s energy mix leads to fast-changing imbalances between generation and load, impacting grid stability and power quality. Battery storage can act as an energy consumer as well as producer. This combination helps to improve grid stability and enable greater integration of renewable energy sources. Thus the grid can utilize more available energy.
Alternative you can feed surplus power into an electrolyzer, which uses electricity to decompose water into hydrogen, and oxygen and generates heat. The obtained hydrogen can be stored and used to fuel a gas turbine and in several industrial processes.Since the supply of power from wind is
Wind, photovoltaik, small hydropower plants and biomass greatly contribute to meeting power demand and environmental awareness. Especially offshore wind power plants with an installed generating capacity in the triple-digit megawatt range are already in operation and deliver great amounts of electricity with a high degree of continuity. But a growing number of onshore wind farms are being sited in regions with moderate to low wind speeds. Therefore we offer a new generation of wind turbines, which extract the maximum energy yield from low to moderate wind velocities.
Also solar energy has a great potential and is an inexhaustible energy source. As a long-term, reliable source of energy, the sun provides a huge annual amount of energy. Thanks to the technological advance of recent years and the development of the photovoltaics market, PV systems are now ready for large-scale production of electricity. And if we would like to turn water into energy small hydropower plants have proven to be a sustainable source of energy as well.
If clouds block the sun or the wind dies, power fluctuations must be balanced out quickly. Gas-fired power plants that can be started up quickly are ideal for this. Combined with a steam turbine, the world´s most efficient combined heat and power plant (CHP) from Siemens can convert approx. 61,5 percent of the energy from natural gas into electricity. Thanks to its CHP concept the overall fuel efficiency increases to 85 percent.
World records at the
Lausward Unit “Fortuna”,
When cities and buildings look for technologies to reduce their energy consumption, smart financing solutions are often needed to overcome the shortage of funds. When engineering and financing solutions come together, buildings can unlock huge energy saving potential – in consumption and in cost. A good example of this is Siemens' energy performance contracting for building technologies – a combination of consulting, modernization services and customized financing. With this, customers do not need to make any initial investment; they simply use the energy cost savings to pay the installments.
Worldwide, Siemens has modernized more than 5,200 buildings this way, with more than €1 billion in savings and more than ten millions tons of CO2 reductions.
Energy performance contracting:
a self-financing cycle
In the future, not only large plants but also millions of small and medium-sized power producers will feed electricity into the grid. More and more former consumers of energy are becoming producers as well. This fact, and the fluctuating feed-ins of renewable energy, make intelligent power grids necessary for power distribution. With “Smart Grids” like these, Siemens helps to achieve the right balance between electricity production and demand - throughout the world, and here in Germany.
5 times as much power
produced as consumed
The village of
5 times more power from
renewable sources than it
Natural gas accounts for around 25% of the global energy demand. The proven reserves climb new highs, based on deep sea exploration and unconventional resources. As the cleanest fossil energy resource natural gas will continue to increase its share of the global energy mix, growing at 1.8% per year until 2035. Gas trade is primarily carried out as Liquefied Natural Gas (LNG) and by pipelines. Mission critical technology from Siemens makes the total process from production of gas via transportation to electrical power more safe and efficient.
of natural gas globally
Should primarily be used where they occur in abundance: solar energy in sun-drenched areas and wind energy on the high seas. Therefore, long-distance networks must be further expanded, beyond national boundaries, using classic overhead lines, cables or gas-insulated lines. Besides classical high-voltage AC connections, high-efficiency power superhighways with high-voltage direct-current (HVDC) technology can be used for very long distances.
For example, in a HVDC Technology project in China, Siemens has shown that around 95 percent of the electricity makes it to the consumers, even over a distance of 1,400 kilometers and at a transmission capacity of 5,000 megawatts.
The requirements on power distribution and therefore on medium- and low-voltage grids are increasing continuously. Changing directions of power flow, load and voltage fluctuations, which are caused especially by the strongly growing number of power supplies from volatile power sources, e.g. photovoltaic/biogas plants and wind farms, make the distribution grids of today go to their capacity limits. The solution is an active distribution grid with intelligent transformer substations as key components. These contribute to an active load management in the distribution grid and enable an automatic and fast fault clearance in case of disturbances.
Self-healing grid for Rotterdam harbor district Stedin, Netherlands
System restart in less
than a minute
Information technology is what we need to get the meter data and the consumption data into the system so that we can measure consumption and draw the necessary conclusions. Automation technology makes the meter data available for outage management and outage measurement in the grids. So this is where operations technology and information technology become one. The collected data is stored and analyzed, in the interests of stable and efficient power supply.
The enabling factor for all of Siemens’ cross-sectoral solutions is a smart grid that allows an intelligent energy management.
Oil consumption is expected to grow and crude oil remains the dominant primary energy source for the next 20 years. Especially transport fuel is dominated by oil, its low relevance in electrical power generation will further decrease. Oil reserves are enough not at least thanks to exploration and production in deep sea regions and opening production from unconventional resources like oil sands. Furthermore, enhanced oil recovery technologies for mature fields enable to get more out of a field. Siemens innovative technology makes production, transportation and processing more efficient and environmentally compatible.
To ensure an efficient and reliable power supply, both now and in the future, Siemens offers a wide range of physical and digital products, technologies, and solutions – from state-of-the-art compressors, turbines and generators to virtual power plants, intelligent grid management and innovative storage solutions. With its innovative technologies, products, and solutions, Siemens is helping to close the gaps in energy supply and make production, transmission, and distribution smarter.
Together with its customers, Siemens analyses their requirements for energy systems and develops tailored solutions that address their challenges along the entire energy conversion chain. Siemens’ portfolio includes technology and expertise for an economically efficient and reliable power supply, which accounts for resource scarcity and helps to protect the climate. Enter the virtual showroom to get an overview.
Fossil fuels will continue to account for a large share of the future energy mix
Combined Cycle Power Plants
Gas-fired power plants provide reliable, efficient and clean energy
Steam Power Plants
State of the art steam power plants will remain the backbone of many energy systems
The importance of nuclear power will remain high on a global scale
On its way to a profitable future
Large hydropower plants are the only renewable power plants that can steadily deliver large quantities of electricity
Solar power converts the sun’s energy into electricity
The use of biomass as a fuel is CO2-neutral
Turning electricity into a synthetical gas
Quick power for peak load periods.
Pumped Storage Power Plants
Strengthening the power highways of the energy system
Delivering energy reliably where it is needed – a consistent portfolio for medium- and low-voltage applications
Digitalization drives change in energy systems
Commerce and Production
Industrial consumers are becoming prosumers interested in energy efficiency potentials
Reliable energy and efficiency know-how for industrial applications
Smarter use of electricity
Siemens products cover the complete energy conversion chain from the various types of power generation to power transmission and distribution leading to all forms of energy application. Find here an overview of our expertise and services and discover what's possible.
New developments, interesting stories and in-depth information around the energy topic
A one-stop shop for plant technology, service, and grid connection
Offshore wind power is a key economic factor.
Electricity for 400,000 households.
Reduction of 2.5 million t emissions
Energy supply for 600,000 residents
Noise exposure less than 25 db in the urban area
Interface between energy producers, network operators and end users
The software captures and aggregates partnered resources.
Participation of small producers helps stabilizing the grid.