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Digitalization (and alternative fuels) will make the difference

By Lisa Davis / CEO Energy and Member of the Managing Board, Siemens AG 27/12/2018

Today energy production happens against a backdrop of megatrends enveloping the globe. There’s demographic change – by 2050, the global population will have grown from the current level of 7.3 billion to 9.7 billion. At the same time, we’re facing climate change – in 2017 our globe’s atmosphere had the highest CO2 concentration in 800,000 years.
 
Mastering these challenges, aside from being a major political concern, is also a technological one. What are the technologies that will shape the future decarbonized energy system? What we do know is that digitalization and the element of integration will be vital to all of them.

At the moment, we can’t say that the energy industry and especially the oil and gas industry are completely digital. But times are changing. More automation and intelligence can create significant efficiency gains and improved safety in all steps of the value chain. By collecting data and knowing how to analyze it, we can translate huge quantities of information into better operational decisions, and we can do it faster. For example, in oil and gas, service digitalization can provide seamless monitoring of real-time conditions to optimize the uptime and performance of an installation and extend the life of mission-critical equipment.

Taking an even broader view, the new approaches to integration and digitalization are impacting the entire energy sector. Digital technology offers an increasing degree of intelligence to all kinds of energy suppliers, consumers, and especially the grid. It’s creating new opportunities to couple the many different elements of the energy landscape, even across sectors, and optimally exploit the advantages of each.
 
Power-to-mobility – leveraging the storage capacities of the growing e-mobility sector – is just one example of today’s most promising game-changers. The industrial and building sectors also offer significant opportunities to shift energy allocations by better integrating their high demand and storage capacities, for example, for heat, cold, and chemical products.

Given the long-term goal of decarbonizing the energy sector and the new energy mix taking shape, hydrogen technology along with biofuels is emerging as a sustainable alternative to oil and gas. Conversion and storage technologies become indispensable, because an energy system based entirely on renewables presents a major challenge of balancing demand and supply. By converting fluctuating power from renewable sources into hydrogen (or hydrocarbons), surplus energy can be flexibly monetized, stored in existing gas infrastructures, and re-electrified in gas turbines, making those a sustainable investment even in a decarbonized world.

Hydrogen may also be synthesized to hydrocarbon fuels, such as methanol, offering refineries a new business field in addition to fossil fuel production. These synthetic fuels are a means to utilize renewable power in other sectors, thereby vastly decarbonizing energy in all sectors of consumption.
 
Hydrogen is frequently referred to as the “fuel of the future,” because both its production from renewable sources and its consumption are sustainable. Its potential as a fuel and an energy carrier is also the basis for a landmark partnership Siemens has entered with DEWA and Expo 2020 Dubai. We’ll work together to build the region’s first solar-driven green hydrogen facility at DEWA’s Mohammed bin Rashid Al Maktoum Solar Park. An integrated megawatt-scale plant for producing and storing hydrogen that uses renewable electricity from the world’s largest single-site solar park. Real, game-changing innovation. 

New technological approaches like these are developing with unprecedented speed. They’re transforming entire industries. And they’re speeding up the changes needed to create a more sustainable and cleaner future.

For people and societies to successfully participate and not be overtaken by this transition, companies as well as politics must responsibly manage and define a stable framework for innovation. Dialogue and collaboration continue to be essential for jointly mastering the challenges and opportunities presented by today’s and future energy systems.

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