I recently viewed a Power Generation survey conducted a year or so back and found it valuable to what motivates change. It was centred on the Middle East Power Generation sector and conducted by Siemens to help them understand future power generation’s underlying trends.
This Siemens survey had as the main question to the survey: “Which trends do you think are currently having the biggest impact on the power generation sector in your region“.
Now in reading this, we have to recognize this is the Middle East with an abundance of oil and gas, but are the trends similar for other regions of the world? The responses I would suggest are certainly reflecting a global movement; the ranking orders might vary. They bring out the opportunities and challenges all power generation is going through presently, I would think.
So in the Middle East, the top three trends that were having the biggest impact were felt to be:
The power /gas market liberalization
Changing customer expectations
Environmental regulation and New emission standards
Then the next three impactful trends
Decentralization of power generation systems
Demand growth and urbanization
Privatization of generation and distribution assets
One area is the increasing priority of digitalization, looking to overcome or bridge the trend impacts. This will come in the form of 1) improving customer data collection and analysis, 2) process automation, 3) virtual power plant (VPP) for management of distributed energy sources, 4) modelling digital asset performance management through greater connected IoT, digital twins etc.
As digitalization grows as part of the solutions, an increased focus on 1) Cybersecurity, 2) the increased use of Artificial intelligence, and 3) Blockchain are all prioritized.
I don’t see these challenges and trends as different for all those involved in power generation globally as they grapple with a changing generation mix but are nicely summarized.
What I draw from this ranking of trends let me offer the following views.
It is the external factors of liberalization, changing expectations and standards that drive the power generation’s underlying changes.
If changes were not “forced”, then we would have no or slow change. The shift in thinking about managing power generation is then triggered, of considering new business models or ways to undertake business, then recognising the impacts driving the actual changes (oil to renewables, digitalization and alternative technologies).
The report states that it seems to be one of optimism as privatization gathers. This gives opportunities to open up a more flexible business model as deregulation continues, and options to build a business become more driven by market and consumer trends.
There is a shift taking place from the combination of an increased pace of regulatory change, raising expectations and demands for flexibility in pricing and energy choices by the final consumer, energy security of supply, and growing competition are all raising the potential for different business models and generation options to explore.
The opening up of previously monopolistic positions does recognize competition will come in different forms. This incentivises the incumbent to focus more on cost and performance, driving down operating costs and finding new ways to manage changing market expectations.
Change can be very uncomfortable for the incumbent.
It is always interesting as “market forces” shift optimism—a feeling of a new lease of life changes to one where change takes on harder meaning.
Eventually, what emerges when you undertake to change is that it suddenly requires different perspectives at the different stages of any change based on how markets’ open up and eventually take hold.
I found it a good prompting report for reflecting on important trends in Power Generation.
Currently, renewables are the fastest-growing source of new power generation capacity and meet increased demand for electricity.
This renewable growth, expected to continue well into the future, is a combination of a growing public awareness of climate change issues, the realization that the continued scale of cost declines provides cheaper generation, continued advances in solar and wind technologies, and favourable policies have provided this dramatic shift.
I will be looking across power generation in a series of posts in the coming weeks- so taking this as my opening post.
Is this renewable shift enough on its own to manage the future Power Generation needs?
Wind and solar are still under ten per cent of global generation. However, in the last year of enforced shutdowns, imposed covid-related measures, renewables’ strength grew in its use as it offered increased flexibility to manage power generation differently.
Renewables are being constantly tested and validated in different energy demand needs. They are increasingly becoming a well-established part of the energy power generating mix. We must also remember the renewable that still contributes the most is hydropower, and we are only just at the beginning of tidal power. The whole renewable story for power generation is gathering increased momentum.
Predictions into the future between now and 2040 indicate a 3X increase in wind and a 6X increase in solar installed capacity. As we “tap into” water generation power, we combine the three natural available and abundant resources of the sun, wind and water we have available to us on this planet.
Dealing with well-entrenched power generators is going to be slow, painful, and needed.
Between the wind and solar, 75% of global net capacity additions up to 2040 will be in these renewables, so where does this leave those traditional power generators based on fossil fuel? The easy answer is still very well entrenched and in place.
Coal and current Gas plants have 30 to 40 years of productive life and can be extended and upgraded in selective core ways and replacement parts. The power generation mix of managing the existing and blending in the new will become critical to the energy transition’s success.
We are not going to see the dramatic shifts many expect away from fossil fuels but a planned transition over many years. Renewables will only be around par with coal and gas power even in 2040 unless the need to accelerate climate change determines more dramatic decarbonization changes. The change in power generation takes years and decades to translate and shift.
We are witnessing a shift from coal to gas in many regions. China and India’s position is radically different due to still relatively “young” investments in coal generating electricity in these countries. Coal still accounts for 40% of electricity generation and will remain that way for some decades to come.
Will decarbonization force the pace of change?
The acceleration of renewables alongside gas power can be the force to change the trajectory for climate change. The managing of gas power generation is going to be crucial in this decade to manage. Gas generation is continuing to advance the technologies for low or near zero-carbon power generation.
The future mix is dependent on the known variants we have today and often governed by the decisions made locally. These include resource availability, the current infrastructure, the existing policy positioning and the concerns over stability and security to meet the power demand are critical factors in the power generation mix.
In many ways, renewables, where an abundance of wind and sun can be providing electricity directly or can combine through water and hydrogen production, offers the very best solution path. Storage becomes critical to renewable advancement as well, but a different view expands upon at another time.
Using an alternative fuel can offset gas or compliment gas through both technologies to generate gas and hydrogen in the same gas turbine or blend them into a current or future pipeline.
Gas power is becoming positioned as a backbone where it co-exists alongside the continued advancement of wind and solar alternatives. As it dramatically reduces carbon emissions, this combination will be a significant pathway for advancing and accelerating coal assets’ retirement.
The continued abundance of affordable natural gas drives a coal-to-gas switch as this switch can reduce Co2 by half.
We do have the tools to do the job of shifting Power Generation.
The fuel mix needs to have far more climate change impact in existing and future decisions for future investment in coal, gas, or renewable options. No question, today the power industry does have at its disposal the tools to do the job of making an energy transition to radically reduce greenhouse gas emissions today and in the immediate future.
The question is not taking the technology solutions available simply on their own standalone merits but to build out complex power generation pathways that have this ‘pathway’ to decarbonize in each country and region at a growing scale that meets net-zero emissions by 2050.
The story we need to build in power generation is the scales, multiple choices, the breadth of options over transparent timelines and offer the technological depth of logic, economics and consideration to many local dependencies and national concern df energy security.
Use the Low or near zero-carbon Power Generation mix constantly in the future.
For decades to come, we will have power generation providers offer a suite of complementary solutions. The importance of balancing renewables based on the sun, wind and water, with gas-fired, nuclear, and smart grid and digital technologies is essential to get right.
We need clear decarbonization pathways, constant replacing the existing infrastructure and energy power generation systems. The replacements need to demonstrate the decarbonization way, consistently and aggressively reducing the dependence of high fossil fuel power generating capacity.
The need is to change today’s unacceptable greenhouse gas emissions levels dramatically. Still, realistically this will be a site, region and country step-by-step approach needing an organized and systematic process of designing the decarbonization pathway in each change.
We need to be alert and challenge vigorously when the desired power generation results planned to be installed only to extend existing power generation. Today we all very aware of all the known consequences. Regretfully they are far too often driven by political motivation or narrow considerations.
Be alert, defend and always have justified Power Generation that does not have renewables at its core is important.
Any future addition of new high GHG emissions by Power Generation needs questioning. Each plan needs to provide a decarbonization pathway in carbon capturing or the progressive moves towards renewable alternatives.
The power industry must frame the climate challenge and solution pathway into any future investment justification for any new, or renewing or even extend the life of existing fossil power generating assets. This pathway should be part of any investment decision.
There needs to be a clear recognition that any transition to a zero-carbon future needs “fuel solution” bridges. Investing in natural gas solutions over the next ten to twenty years is required to maintain and support the energy demands.
It is the technical solution and decarbonized pathway surrounding the investment that needs a deeper evaluation. Renewables will continue to attract far higher investments, but total generation capacity needs a mix of power generation solutions in the foreseeable future to ensure the stability of demand.
Decisions need to clarify and justify any investment position that does not provide carbon capture or zero-carbon power generation as central.
Any investments that fail on this transparency of not clarifying the decarbonization pathway must be publicly challenged and questioned by the investors. It is surely unacceptable with all the power generation options available when we are in this race to decarbonize.
It is down to the good judgement of making sound investment decisions based on decarbonizing what we have and finding balanced solutions that have an end goal of zero-carbon in the next thirty to forty years at the latest.
I am looking at the Energy Transition from an evolving technology innovation perspective. In other words, what “forces” can be identified or promoted that can transform the existing energy system through the pursuit of the new invention, innovation, or technological advancement.
Specifically, the ones that will be needed over such an extended time and complexity of change that this Energy Transition will take, upwards of twenty to thirty years to give it an unstoppable momentum.
I have been building out the value in my proposal of having a Fitness Landscape framework within the Energy Transition and why it makes sense.
Here in this post, I want to expand on my thinking around navigating a complex landscape that the Energy Transition demands.
When you look through the lens of innovating at the Energy Transition, you are often questioning the fitness, or the reality to achieve something.
A risk of the energy transition is we give higher emphasis on the depth of knowledge in one area and fail to pull this together, to map it into the bigger picture of the practical, broader-based one.
This “mapping back” gives our broader Society and non-expert groups needing to relate to the Energy transition gives them identification. It generates their need to change or support change and brings about more extensive (behavioural) change and awareness. Otherwise, they just accept the idea of advancement but equally block it if it does not fit their frame of thinking or how or why it is relevant to them.
The value of fitness landscapes as part of any Energy Transition awareness makes sense to bring identity and structure.
Let me explain this by keeping Hydrogen as the initial focus:
I have taken Hydrogen as my opening exploration to traverse this Energy landscape
I need to begin to evaluate the value of knowing the real part of any hydrogen ‘fitness’ and what makes up its distinctive dynamic capabilities that moves it towards the solutions we need to have in place to contribute in significant ways to the energy transition that is underway.
These solutions can be, but not limited to, Technology and Innovation, Scale and Adoption, Infrastructure and Market Conditions, Government Engagement and Involvement, Industry, and critically vital Public adoption.
We need to visualize and articulate change in connecting ways.
Both methodologies allow for a greater collective identity and engagement of all the necessary expertise and generalists to come together. In a complex challenge like the Energy Transition, you need to create the identification and build the collaborative ecosystem to focus resources on the (shared) identified goals.
Taking Hydrogen as my point of reference, to understand the context, complexities, and creative tension.
By firstly, mapping out the hydrogen terrain to the task at hand enables us to understand and relate to what is needed – I call that the context for change. I have been investigating Hydrogen as a promising energy carrier to understand the barriers and obstacles to the energy transition we need to undertake. There are so many underlying “tensions” in this change from established fuels, infrastructure, and product delivery that Hydrogen needs to overcome.
Taking this fitness landscape thinking a little further here.
Any Energy Transition Fitness Landscapes identifies the opportunity spaces on where you need to focus your efforts- the appropriate resources to navigate the terrain. The higher the ‘fitness’ transforms your landscape potential into accelerating opportunities into final tangible outcomes.
Fitness Landscapes helps in this task by identifying the opportunity spaces on where you need to focus your efforts‐ and applythe appropriate resources to navigate the terrain. The greater understanding of the ‘fitness points needed’ can transform your hydrogen landscape potential, or in business parlance, achieve your goal.
Mapping out your capabilities, competencies, and capacities to the task at hand enables you to understand and relate to what is needed. You begin to get fit for the journey ahead.
I took what I call a “Fitness Landscape Result Expectancies” approach.
Fitness Landscape Result Expectancies
My approach here is a work-in-progress; it will evolve and adapt depending on interest and demand.
These are my “first pass thoughts” of the expected results or points of investigation sought, by identifying the critical aspects of capability identification for the Hydrogen (or any energy transformation journey), to make it a significant contributor to the Future Energy Mix.
We need to appreciate or consider the following as principles or guidelines:
A greater understanding of the obstacles and barriers to Hydrogen, becoming a significant energy carrier in the future energy mix is critical to understand. It “conveys” the fitness landscape journey.
The understanding of what needs to be changed moves Hydrogen towards an energy transition that is sustainable and evolutionary built on technology investigation, validation, and ability to scale. Solutions gain world-wide. Recognition and adoption as the resulting outcomes and processes from discovery to realization.
The journey generates a learning process for the identification of real and ‘false’ dynamic capabilities. Dynamic capabilities bring about change in the environment. As we frame, we can identify differences separating the more static ones that often just need reinforcement or retirement as not of lasting value.
Pursuing limited or ‘selective’ development allows for restrictive exchanges within a network of specialization. These will not have the desired effect to accelerate solutions that can replace the existing ones unless the broader network effects are not accounted for.
Any fitness landscape journey, where change is a significant level of requirement, requires a holistic view of the existing issues and the intent and goal of the journey by framing a clear strategic plan to mobilize the necessary forces.
The solutions suggested will draw out internal discussions, growing recognition, and reality of the present and future needs in this area of resource allocation and capital allocation.
Importance of linking capability across different activities or technology applications to become increasingly ‘dynamic’ for a more sustainable future.
The ability to build out a clear capability portfolio knowing where resource needs to be applied and their likely timeframe from concept to fruition. These evaluations will also help identify synergies to bring new value and future impact options.
We need to challenge long, well-established routines and processes to see how we can extend technology options. To discover and continue the existing can be valuable to place additional resources behind.
Having clarity in the fitness landscape allows for regularly taking additional “adaptive walks” to learn and adjust current thinking and question alternatives more openly.
Knowing your capabilities, competencies, and capacities become important so this understanding intensifies and equally solidifies the studies, through constantly challenging and questioning the investigation and landscape model.
Outcomes from these expected results raise dynamic capability and the importance of dynamism for more flexibility and fitness discovery. By identifying higher points of value, you accelerate the change process and plot different projects and their impact. You have greater confidence in where to invest new capital and resources.
Looking for outcomes and outputs.
The reason I am building this into a workable model is it firstly extends on my previous work in Innovation Fitness Landscapes and it takes out my focus on the Energy Transition.
Within this adaptive approach to the Energy Transition, we can seek out and determine the Energy Fitness Landscape to then determine where the critical focal points are so the necessary resources, and capital can be applied.
I want to identify the necessary capacities, competencies, and capabilities to undergo this journey. Its ultimate aim is to identify outcomes that can become ones that give additional focus to knowing which are valuable.
Also, which aspects need to be extended and accelerated, that build on the existing solutions and gives us also the decision points to let go of projects or concepts which have limited or no value. Then those resources and capital should be released to be redirected onto the ones that hold promise, impact, and value.
The energy complexities do need understanding, explaining, and mapping. The knowledge of how the traversing will be undertaken to get to the end goal of a clean energy system as soon as we can, needs often different articulation?
Fitness landscapes help make the journey a lot easier to determine what is needed to undertake it. It is a dynamic process that stays ‘evolving’
Understanding any ecosystem, you have to attempt to understand the whole system. The energy system is no different to begin to relate and build out innovative solutions that bring this complexity into some form of a new order.
To help with this energy ecosystem thinking the International Energy Agency (IEA) are doing some pioneering work that I want to touch upon here briefly, so there is a broader awareness of this.
In this report, they have developed some improved modelling tools to bring a higher capacity to answer key technology questions in greater detail that make up the Energy Ecosystem. This new modelling is good news and highly valuable.
Incidentally, IEA further followed that up later in 2020 with a flagship ETP 2020 publication to keep a tighter and more consistent focus on the role and need of innovation to accelerate clean energy transitions.
The ability to map the entire Energy System is critical
The work undertaken by the IEA has produced a comprehensive perspective of where we are today and our needs to track the achievements of different innovation breakthroughs known and in development or validation, to bring about the required clean technology energy solutions that need to be innovative in design for a new Energy System.
Their ETP Clean Energy Technology Guide is an interactive framework that contains information for over 400 individual technology designs and components across the whole energy system that contribute to achieving the goal of net-zero emissions. Currently, this stands at 433.
For each of these technologies, it includes information on the level of maturity (or Technology Readiness Level, TRL) and a compilation of development and deployment plans, as well as cost and performance improvement targets and leading players in the field.
You can use the different filters offered to narrow down the selection of technologies you are interested in, to achieve your designated search. Also, they provide an amazing poster version that covers all the energy ecosystem aspects. Here is a download link to this poster.
The Critical Parts of the Clean Energy Ecosystem
Briefly, the IEA approach breaks down the Energy Ecosystem by the classic Supply-side, the Co2 infrastructure aspects needed for clean energy, and the Demand Sectors by the crucial parts of transport, industry, and buildings.
The Supply Side requirement from Clean Energy Technologies
The guide goes into all aspects of the technologies in the energy transformation on power generation, heat, tackling biofuels, hydrogen, ammonia, synthetic hydrocarbon fuels, and refining. The technology grouping is then further broken down into generation, storage, and infrastructure as well as specific production and transport where necessary.
The Co2 infrastructure required for Clean Energy
This looks at the importance of Carbon Capture, Storage and Utilization (CCSU) with a breakdown of Supply sided CCU’s, Direct Air Capture (DAC) and Demand CCU’s tackling high-value chemicals, methanol, ammonia, iron and steel, cement and aluminum by fuels and methods
The Demand Sectors needs from Clean Energy Innovation Technologies
Within the breakdown, you have a structured approach to the technology grouping, the technologies applied, the sub-technology where necessary, and the specific components or designed needed. Within this demand side, it breaks the three significant energy consumers down into transport, industry, and buildings.
Transport covers the road, rail, shipping, aviation, and freight, showing sub-components or design by vehicle mode, their needed infrastructure, operations, and necessary components of different design solutions.
The industry segment covers critical a comprehensive breakdown of dealing with different “harder-to-abate areas covering ammonia, methanol, ethylene, benzene, toluene, and xylenes. Then it covers the specific industry sectors of high-value chemicals, plastics, iron and steel, cement, pulp and paper, aluminium, metallic products, and finally, cross-cutting one that requires systems integration. The technology applied covers fossil fuel, biomass-based, electrolytic H2 based, further broken down into recycling, blast furnacing, smelting, kilns, grinding, curing, pulping, and waste production conversion.
The buildings segment is broken down firstly into construction, renovation, then their heating and cooling options and designs, with further sections dealing with cooking, lighting, and system integration. Here it is looked at by generation, performance, efficiency, co-generation, distribution, control system, and storage.
To capture the Ecosystem of Energy Innovations and Technologies is a fantastic piece of work
This work is a stunning breaking down of the entire Energy System, which was updated this year by the International Energy Agency and presented in such a visual way in the poster design work by Lundgren+Lindqvist gives us all the understanding of the complexity but also the innovation technology opportunities available.
The other more amazing part is the interactive website for using and tracking the evolution of The Clean Energy in Innovations and Technology as an ongoing Guidefor presently 433 identified individual technology designs and components across the whole energy system for knowing where we are in their contribution to achieving the goal of net-zero emissions is impressive.
Yout time would be well-invested in viewing this work by the IEA if you want to grasp the entirety of the Energy System as a whole and what makes up this Ecosystem
I have to recommend anyone interested in the Energy System take a look at the website or download the poster to appreciate the complexity of the design and change we are all caught up in and need to support.
Our energy systems and tracking their progress today and in the future allows us all to participate and build more pressure on those undertaking the need for a radical redesign. It is of a scale that can be better understood by this work that the IEA is undertaking, showing the innovations for technologies that can deliver the clean energy ecosystem we need to have in place..
It is the place I feel I can make the best contribution, a place where innovation thrives and drives discovery to commercialization of a new idea that emerges as a concept of value, often replacing something that does not “serve today’s or tomorrow’s purpose, where the energy transition must embrace fully “
My aim here is : “To achieve better, faster and more valuable future solutions with a focus on sustainability, to anticipate constant change and build different more exciting and valuable business models for lasting impact”
We provide a range of services that support your energy transitionat the front of the change process.
The level of innovation intensity within the Energy Transition is a fascinating one, and it is one I continually place more and more a focus upon.
I think it is worth referencing here how the IEA breaks down to track clean energy progress, it is a pathway that needs innovation to be central.
The thinking within post has been inspired by the IEA report Tracking clean energies IEA report, published last year and has significantly crystallized my own views or thinking on the need to accelerate innovation as central to the Energy Transition.
The IEA track the following aspects of the energy system; power, fuel, industry, transport, buildings, and energy integration. That gives innovation focus a sound way to break down the complexity within the transformation underway.
This Monday, January 11th, 2021 Plug Power(PLUG) closed at $53.97 in the latest share trading session, it has gained 98% over the past month. Today with a fresh expansion announcement it is standing at $64.02 at this moment of time. Clearly, Plug Power is outpacing the Industrial Sector. It belongs as one of the alternative energy company stocks that focuses on green hydrogen, the present ultimate answer to as close as you can get to a zero-carbon fuel.
So what is going on? What is causing this incredible jump and market sentiment?
To add a little more to this “what is going on” let me do something else.
Why do I compare Plug Power to Apple in past years? It is simply how its stock has rapidly accelerated away in the past year or perhaps the growing expectation of sizable growth to come, on new products and market penetration.
Why did I choose to give a specific focus on different aspects of innovation within the energy transition? Well, it is simple for me. I have focused on building capabilities, competencies and capacity to innovate for 20 plus years. Innovation has been my core area of focus. Today, I am channelling that specifically towards the building of innovationwithin our Energy Transition
The real imperative for finding new innovative technology is critical. We have such a real threat of climate change and any pathway to meet the Paris Agreements, where all countries pledged to keep the rise of the global temperature below 2 degrees C by 2050 and ideally try to work towards the position of 1.5-degree C above pre-industrial levels. These target goals mean bringing our temperatures down dramatically.