Power demand is surging across grids everywhere, with global demand likely to grow at least twofold by 2050, according to McKinsey’s Global Energy Perspective 2023: Power outlook report. But the sector can’t just double down on current production methods; the race to meet the Paris Agreement climate change targets by the middle of this century adds immense pressure to decarbonise power sources. The stakes are monumental: the industry must supply twice as much power, this energy must be clean, and the grid must be reliable and resilient.
In summer 2024, AVEVA brought together business leaders from across the global power industry at both the Utility Executive Summit (UES) in California, USA, and the Japan Power Summit in Tokyo to discuss the challenges and opportunities they face and conceptualise a strategy for grid infrastructure advancement. Ann Moore, industry principal for power and utilities industry at AVEVA, shares the main takeaways from the event and details the transformation underway across the utilities sector.
AVEVA encouraged attendees to share their ideas for grid infrastructure development at its Utility Executive Summit in June 2024
What is the state of the power industry today? What are the biggest challenges?
At the UES event we heard how the industry must tread a fine line between meeting double the current power demand while decarbonising its operations within just one generation. Utility providers must boost efficiency and productivity from evolving grids while fast-tracking net-zero goals amid stricter emissions reductions mandates, climate change events, supply chain disruptions, inflation, security threats and the increasing number of complex grids that draw on diverse energy sources.
There are three key issues around grid transformation. First, we need infrastructure upgrades to onboard clean energy, improve reliability and handle renewable and battery storage. Second, with extreme weather becoming more frequent, there are resilience issues around transmission and distribution. Finally, distributed energy resources (DERs), including consumer-driven electrification and advanced technology, will be important to this evolution.
Recent outages show what’s at stake. Hurricane Beryl, for example, left more than 2.2 million homes and businesses without electricity in Texas, USA, in July 2024, with some affected for several days. We must respond with innovation and collaborative action to meet the pace of the energy transition to ensure reliable power for all. We must reimagine our entire approach to energy.
How can the industry collectively make the most of technology to solve these pressing challenges?
Digital technologies, such as the industrial internet of things, artificial intelligence, machine learning, cloud and augmented reality, are already helping power companies better predict and optimise their processes, enhancing efficiency across their entire value chain. In addition, they are further sparking sector-wide collaboration across the power ecosystem. As Kerrick Johnson, chief innovation and communications officer at Vermont Electric Power Company, said at the California UES: “For climate change, it’s the same strategy for dealing with weather, whether it be heat, flame or water…When we have the ability to exchange data with all the utilities, with the university, with our regional transmission organisation, clean validated cybersecure data, that’s critical.”
Across the world, 75 per cent of C-suite leaders in the power industry will prioritise investments in industrial intelligence solutions in the next 12 months, according to the AVEVA Industrial Intelligence Index Report 2024. Better data visibility and accessibility helps optimise asset planning, improve load forecasting (which is particularly necessary for renewables), incorporate DERs, batteries and microgrids, and cooperate with regulators.
How does this data-led ecosystem works in practice?
A good example is the way AVEVA and Microsoft solutions support Dominion Energy in the USA. The company pulls together data from diverse and widely distributed renewable energy sources using CONNECT data services, which runs off Microsoft Azure. Every player across its value chain benefits from real-time industrial intelligence. Producers and schedulers can make data-driven decisions, customers can validate their decarbonisation commitments with regulators, and Dominion gains a new revenue stream. Everybody wins while advancing the energy transition.
What is happening elsewhere in the world? Can you share some highlights from the Japan summit?
We were very pleased to reconnect with the Japanese industry, where we have some amazing success stories. National energy reform has created both new challenges and opportunities for power producers in the country, and the Kansai Electric Power Company, Japan’s second-largest provider, turned to AVEVA PI System to improve operations and optimise maintenance in the newly competitive market. It uses AVEVA PI System at all nine of its plants to improve operations, reduce downtime and cut costs. This has enabled it to save $3 million per year at just one plant.
The Japan Power Summit was held jointly with Microsoft in August and addressed several UES innovation, collaboration and partnership topics. We saw how findings from the California summit resonated with power grid companies in Japan, which face similar challenges, particularly around demand, energy security and the sustainability transition. Attendees were particularly keen to hear about data-driven technologies such as AVEVA PI Data Infrastructure, which creates full visibility across multi-site operating environments from edge to cloud, and CONNECT.
Why is collaboration crucial for overcoming the challenges we’ve discussed and decarbonising the power sector?
A common refrain at the UES was that no company can meet the industry’s challenges alone. Partnerships are indispensable to progress in the power sector. For example, public-private partnerships can manage complexities around integrating renewable sources, increasing demand from electric vehicles and data centres, and grid stability. In 2023, they helped bring 32.4 gigawatts of solar and 6.2 gigawatts of wind power online in the USA alone. Similarly, community and tribal partnerships like in Washington’s Tulalip Microgrid heighten local resilience, while working with regulators helps update policies and balance innovation with consumer protection. Finally, collaborations between technology providers and industry players will improve grid management with data and AI tools. Even here, partnerships between companies are moving the needle. Interoperability between AVEVA CONNECT and data analytics solution Microsoft Fabric, for instance, empowers the industry to unlock the potential of its data and lay a strong foundation for this era of artificial intelligence.
Nearly half (43 per cent) of power leaders see a secure data-sharing and collaboration platform as a target investment with the greatest potential to drive opportunity for their organisation, according to the AVEVA Industrial Intelligence Index Report 2024. This is because sharing data with partners in real time helps drives innovation, efficiency and sustainability success.
By combining public sector guidance with innovation from the academic and private sectors, we can accelerate grid modernisation while balancing reliability, sustainability and affordability. As Richard Wernsing Sr, senior technical director for EV Edison, said at UES: “If we all work together, we can benefit the customer and the utility, and hopefully keep the cost down.”
Read more from Ann Moore on grid transformation and energy transition in an AVEVA blog post
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