Electrification as an accelerator towards net zero

The march towards net zero carbon emissions is gathering pace, as more countries commit to stringent targets and objectives.

With climate change at the top of everyone’s mind, even food choices are impacted. According to a Boston Consulting Group report in 2022, each dollar invested in the production of meat and dairy alternatives resulted in seven times more greenhouse gas reductions than green buildings and 11 times more than zero-emission cars.

Beyond lifestyle changes that individuals can make, industry is tackling the dual challenge across Asia, namely meeting the increasing demand for resources from a growing population with rising standards of living, while addressing sustainability goals. Today, energy accessibility and affordability are critical issues. Projections from the United Nations (UN) indicate that the world population will hit 9.7 billion in 2050, up from 8 billion today.

As Southeast Asian economies lead world growth, the growing middle class is emerging to comprise almost half of the world’s population (at 48% or 3.8 billion people) today. This burgeoning economic power places massive strain on power demand in the energy industry. According to the US Energy Information Administration (EIA), this demographic group is also likely to be responsible for a 50% increase in global energy demand by 2050, and a 75% increase in electricity demand. Countries like India, China, Japan, Indonesia and Malaysia are incentivising electrification of mobility (with electric vehicles on a steep regional growth curve) and heavy industry alike.

To meet this growing regional market demand, it is necessary to ramp up electricity resources, particularly from renewable origins. An estimated investment of over US$1 trillion a year in capacity, grid improvements and low-carbon generating capacity, as well as transmission and decentralised distribution, will be needed to enable suitable electrical generation. In planning, energy companies will also need to consider the current situation: that approximately 770 million people cannot access affordable electricity today, most of them in the sub-Saharan Africa (IEA, 2022).

Tapping into electrical power

The move towards electrification is an opportunistic one for organisations across sectors, including chemicals, mining, conventional and green energy, as well as in power generation and distribution. However, there are challenges ahead.

Grids need to be expanded, modernised and enabled to rapidly evolve to support distributed renewable power and power storage, as well as to be more resilient in the face of cyber threats. As part of this strategic move to electrification, more organisations are decarbonising assets to achieve carbon abatement pledges and utilise electrical power. Advanced power distribution management and distributed energy management (DERMS) through digitalisation is crucial to keep electric power supply reliable for all consumers and works in favour of the trend towards distributed renewables (solar, wind, geothermal and hydro) and storage (battery arrays in the grid). For critical assets, microgrids can optimise and reduce the carbon footprint of the asset owner, as well as ensure that vital assets do not suffer sudden electricity supply loss.

Globally, many initiatives are implemented to enable the ability to ensure traceability and accountability (in terms of audit requirements). This enables the industry to track green power content through its value chain and further understand its impact on the carbon intensity of products. This is particularly crucial in gaining increased access to capital for decarbonisation investment in economically developing regions and for auditing outcomes. Investments in renewables and intelligent grids go together with carbon trading in order to monetise decarbonisation efforts.

Digital solutions, supporting distributed generation sources and grids, play a crucial role. This includes tracing carbon emissions (from renewable source to industrial end use); the calculation and tracking of carbon intensity in finished products (produced via renewable energy); as well as the issuance of green certificates.

A greener and better grid

Organisations with their finger on the pulse are already exploring renewable solutions, such as energy storage technology, direct air carbon capture, wind and solar farm optimisation, hydrogen fuel cells and distributed generation and distribution. With the proliferation of distributed renewable power sources, grids need to be more digitally enabled. In doing so, these grids can dynamically manage the variability of supply and demand to ensure 100% availability, as grids begin to operate increasingly in a bidirectional mode. The primary objective is to ensure complete network reliability.

Data incorporated in both generation and storage solutions should be part of an intelligent digital system to predict load and demand, as well as to route power efficiently. Digital upgrades are essential to support new pricing and revenue models for electricity, and for certifying an organisation’s green investments. Intelligent distribution solutions encourage price-based usage during periods of surplus supply, while removing barriers to the expansion of distributed generation and storage nodes. They also enhance cybersecurity. In both transmission and distribution networks, the ability to forecast weather-based peaks and valleys in renewable power supply can optimise the utilisation of renewable capacity. It also helps to avoid overloading lines and effectively use storage capabilities.

Other benefits can also be derived from utilising advanced distribution management solutions, which include configurable capacity; visibility into distributed generation; resiliency amidst increasingly dynamic supply and demand; advanced situational awareness for operators and managers; as well as enhanced grid support for smarter meters, generators and storage nodes.

However, to maximise value from distributed power, developments in digital software will be required. For example, enhanced visibility into systems will better enable distribution to monetise their operations, while also helping them to better optimise distributed power and storage. Connection of smart home and commercial devices will help incentivise consumers to preferentially use available power during surplus, low price periods.

Power generation gaps are also being filled by the rapid growth and uptake of microgrids. The right digital solution enables optimised deployment of microgrids, integrated with regional grids and developed in a cohesive, intelligent way. This approach promotes and enables entrepreneurial investment and innovation in new power generation strategies and connected storage innovation. Microgrids give local concentrations of power to users to maximise reliability of their energy supply.

The global march towards net zero

Without any doubt, the global march towards net zero carbon emissions is gathering pace, as more countries commit to stringent targets and objectives. This move forward suggests a bright future for electrification and offers new opportunities to organisations in the energy sector.

Across multiple industrial sectors, organisations have the chance to carve out a competitive edge and achieve true market differentiation. For example, power and utility companies can harness the move towards electrification by increasing investments in generation and transmission assets. Other companies can bring in new equipment and processes to achieve greater efficiencies. Overall, this approach can help reduce operating costs, as expensive fossil fuels give way to electricity. With more resilient and stronger grids being deployed, developing regions can side-step traditional approaches to power and take on full-scale adoption of renewable power for cheaper, wide-scale access to energy.

To harness this strong electrification market opportunity, digital software provides the foundation for wide-scale adoption of electricity as a power source, while providing choice — in terms of technologies deployed to enable regional and microgrids — on a global scale.

Image: iStock.com/Antonio Correa d Almeida