REVOLUTION OR EVOLUTION?
In order to maximize the value of digitalization for net zero, the current financial and risk management models in the industry need to be upgraded as ROI and safety will be re-defined based on the balance between social, environmental, and financial factors for net zero. The energy sector’s footprint can be reduced through multiple approaches, including the further uptake of renewables and the scrutiny of digital technologies for energy proportionality. Geothermal, carbon storage, unconventional oil and gas, and hydrogen are some of the energy operations that will be greatly optimized by the evolution of digital technologies.
We live in an industry where we drown in data but starve for valuable information. Energy companies have the capital and engineering knowledge of how we can focus on the evolution of digital technologies. The questions are:
To evolve to the next generation of digital technology impact, we can’t consider going digital as just a technology project but rather a transformation program where we work across cross-functional disciplines and entities to disrupt business processes and spark true digital innovation.
Here we are at the doors of 2022 after an exponential digital immersion forced by the COVID disruption with more profound impact compared with the agile leadership in the industry.
In response to the questions above, consider:
Blockchain: For digital technologies deployed in the context of net zero to work for everyone, they will need to enable individuals and society to scrutinize their outputs and methods, they must be secure and resilient, and there must be a wide engagement of all stakeholders. Blockchain technology will significantly improve the transparency, accountability, and traceability of greenhouse gas emissions. More accurate, reliable, standardized, and readily available data on carbon emissions will be the outcome of utilizing Blockchain in the business management process. More importantly, blockchain or distributed ledger technology will allow the use of smart contracts for value chains that have a large volume of suppliers to monitor supplier performance towards net zero.
Digital Twins: Digital twins combined with artificial intelligence will also be important for operational optimization. Simulations can be run before an asset is built or during its use, with then the possibility to receive feedback in real-time data. This feedback loop enables a control loop, with the possibility to adjust the real-world set up based on insights from the simulation. Digital twins are sandboxes in which engineers can simulate what would be expensive, time consuming, or dangerous in the physical world. Big data can save the world trillions of dollars but the global shortage of big data analysts, data scientists, and software engineers to process it and the lack of awareness of leadership on how best the data could be leveraged for the benefit of the business are the key obstacles that Digital Twins can solve by presenting an interesting way of data visualization and increasing its accessibility. The main value-add from digital twins is not just the representation of something physical but the connection it has to physical assets.
IOT-SCADA: The IoT is driving an explosion in the quantity of data collected and analyzed. Fossil and renewable energy requires a high level of control, automation, and supervision in order to optimize production. This data also fuels the creation of powerful predictive tools that must correlate with the physics and complexity of the operations for process automation, to achieve sustainable energy production. IoT will aid the energy sector to transform from a centralized ecosystem to a distributed, systems-thinking, smart engineering energy system. More importantly, IoT is a foundational technology that provides real-time data insights to provide a revolutionary impact on our industry as it enables digital solutions to be used with modern sensory device technology and supervisory control.
Decision Modeling: The increase in demand for renewable energy has been followed by the need to include the social and financial impact of any project as a core element. Significant challenges for renewable energy development include uncertainty in assessing social and environmental impacts at local scales, participation, and social acceptance. Engineering economics is a fundamental skill that all engineers should have in their arsenal to understand risk and uncertainty and aid decision-making.
Systems Design Thinking: Most people think you can either employ a system thinking or a design thinking approach to solve a complex problem and that both these approaches are mutually exclusive of each other. However, a good balance of both is a must to truly enable a culture of innovation. If you have a stomachache and want to take an OTC medicine that improves the stomach pain, you want to ensure the medicine doesn’t impact other parts of your body harmfully. The same thinking goes for systems design of digital technology. You want to spend adequate time architecting the system before developing a new product to ensure you build digital solutions that are reliable and sustainable that won’t have any adverse effect on returns or carbon emissions.
The net zero goal is the biggest global challenge for any human generation, ever. As technology evolves and becomes a priority for success, professionals in the energy space will be forced to quickly evolve in both tech and mindset.
We build the future, we build the technology, we achieve