Electrification as an accelerator towards net zero

With climate change at the top of everyone’s mind, even food choices are impacted. According to a Boston Consulting Group (BCG) 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.

South-East 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 U.S. 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 $1.5 trillion a year in capacity; grid improvements; low-carbon generating capacity; and transmission and decentralised distribution will be needed to enable suitable electrical generation. In planning, energy companies will need to consider the current situation, that approximately 770 million people cannot access affordable electricity today, most of them in 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; and power generation and distribution. However, there are challenges ahead.

Grids need to be expanded, modernised, enabled to rapidly evolve to support distributed (renewable) power and power storage, and be more resilient in the face of cyberthreats. As part of this strategic move to electrification, more organisations are decarbonising assets to achieve carbon abatement pledges and use 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 toward 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 electric 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); and 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 bi-directional 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 route power efficiently. Digital upgrades are essential to support new pricing and revenue models for electricity, 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 use of renewable capacity. It also helps to avoid overloading lines and effectively uses storage (battery array) capabilities.

Other benefits can also be derived from using advanced distribution management solutions, including configurable capacity; visibility into distributed generation; resiliency amid increasingly dynamic supply and demand; advanced situational awareness for operators and managers; and enhanced grid support for smarter meters, generators and storage nodes. However, to maximise value from distributed power, developments in digital software will be required.

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 development 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 provide local concentrations of power for users, which helps maximise their reliability.

Global march towards net zero

Without any doubt, the global march towards net zero carbon emission is gathering pace, as more countries commit to stringent targets and objectives. This move forward provides 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. With more resilient and stronger grids being deployed, developing regions can sidestep traditional approaches to power and take on full-scale adoption of renewable power for cheaper, widescale access to energy.

To harness this strong electrification market opportunity, digital software provides the foundation for widescale adoption of electricity as a power source, while providing choice — in terms of technologies deployed to enable regional and microgrids, on a global scale. In closing, the adoption of electrification by fertiliser and food production industries can reduce the carbon intensity of food production, hence giving the consumer a broader set of choices to follow a greener lifestyle.

Ron Beck is the Senior Director of Aspen Technology.

Image credit: iStock.com/ArtemisDiana