Three forces fuelling industrial energy transition (ADS)
The energy transition is challenging every industrial sector, whether it is the energy consumed, the emissions produced, or the products created.
KBC (A Yokogawa Company)
Viewed : 1030
Asia is on the frontline of external forces driving this transition. Successfully riding these forces will take all the region’s technological expertise, investment foresight, and desire to challenge the status quo.
Hyper-connectivity and information availability
Enhanced access and usability of connected devices means people can easily obtain information from anyone, anytime, anywhere. As a result, consumers now better understand global issues such as climate change, and also have the platforms and tools available to amplify their concerns. In general terms, Asian climate regulations lag those in Europe, so expect rapid change as governments catch up with the attitudes of informed citizens.
Climate change concern
The weight of scientific, governmental, and public opinion demands substantially deeper and faster cuts to greenhouse gas emissions. Increased shareholder activism, resulting in reduced or more conditional access to investment capital, is putting increased pressure on carbon intensive industry to act.
Thanks to improving technology, the cost of renewable energy and energy storage has fallen dramatically. Wind and solar are now more competitive than all other forms of power generation and continue a strong downward trend, whilst fossil generation remains static (Figure 1).
The Asia region has a major need for new power generation capacity – this means the decarbonisation of the grid requires less displacement of existing generation, and potentially means Asian grids will be in a position of high renewables content without idled fossil generation as intermittency backup.
Electrification and energy storage
The availability of low-cost green electricity opens up several technologies for electrification, ranging from reduction in onsite generation in favour of imports, electrical process heating directly or via heat pumps, and hydrogen generation by hydrolysis. Some of these are still relatively new, but economic conditions will push the industry to consider non-traditional alternatives.
Energy storage is dramatically reducing in cost and improving in performance (Figure 2).
Synergy of storage with intermittent green power will further accelerate the transition to electrification. Battery technology will compete with liquid fuels as an energy carrier for transportation, particularly in Asian countries with large urban centres and high population densities. Energy storage and smart grid participation is an opportunity for the industrial sector, especially by harnessing digitalisation to develop agility to capitalise on short-term market arbitrage.
Increasing connectivity, both within and beyond corporate boundaries, allows large systems to operate in unison. An explosion of computing and analytics power also enables rapid and deep analysis of immensely complex problems and situations, whilst a rise in automated tasks empowers action to be taken faster, more efficiently, more consistently, with fewer errors.
Digitalisation allows industrial facilities to increase agility and responsiveness to react to rapidly changing external issues, to predict future events, and automatically act accordingly.
Asian industrial companies are relatively advanced in digitalisation, face globally high energy costs, and potentially participate in a structurally more volatile power grid. We therefore expect Asia to evolve leading-edge responses to the industrial energy transition, including aggressive electrification, multi-period optimisation, and class-leading energy efficiency.
Transformation carries risk, but inertia is probably the biggest risk of all. The optimum pathway starts with digitalised energy efficiency, which reduces operating costs today and saves capex in the implementation of any of the medium- and long-term solutions. ν
This short article originally appeared in the 2019 Asian Downstream Summit Newspaper, produced by PTQ / DigitalRefining.
You can view the digital issue here - http://www.eptq.com/digitalPTQ/2019-ads/html5/index.html?&locale=ENG
Add your rating:
Current Rating: 1