The sources of electrical power for the grid continues to shift toward decentralization as renewable energy sources are connected. At CERAWeek 2018, Emerson’s Bob Yeager joined a panel hosted by IHS Markit’s Philippe Frangules, Electric power: Disruption, innovation & new business models. The panel was joined by leaders from Duke Energy, 38 North Solutions and Innogy SE. The panel’s focus was:
As distributed sources of electricity gain a bigger foothold in the power system, there are many new business models emerging. What are some of the new business models that are disrupting the traditional players? As business models change, what will be the sources of revenue and margin? Will the traditional advantages of being a strong incumbent continue? How critical will it be to have asset ownership to have access to customers?
Philippe opened noting IHS Markit research showing renewable share of electrical power production growing from 9 to 22%. The level of innovation has been growing rapidly and the business models in the electrical power generation and transmission business. There are many factors changing the energy generation mix from renewable technology advances to energy storage advances to consumer preferences in what sources of power generation they want to consume.
The subject of blockchain technology came to the forefront of the discussion. One use is smart contracts allowing automated transactions of energy capture, transmission and consumption. At the end of the day, blockchain technology removes the middle man in transactions to make these transactions more efficient and seamless.
Bob shared an example of China and carbon emissions. They have a carbon market for cap and trade of carbon. Blockchain technology can make these markets global and occur without political decisions being made. Countries like China and states like California and the U.S. Northeast who have cap and trade regulations can participate. This carbon trading market can grow organically.
Another example of innovative technologies is the cloud and creating digital twins of the running power generation facility. This twin runs in parallel with the operating plant where training can be performed, changes can be created and fully tested before applying the live system, and a current snapshot for the plant ready for new project development.
One panelist noted that innovation is outpacing regulation. Performance-based rates are preferred over cost-plus based rates. Distributed energy is a rapidly growing trend and how is this effectively managed? One challenge is that innovation is not rewarded by current regulations in most units.
The current market for energy producers does not handle big upsets from weather, cyber incidents or other disruption. The grid needs a certain amount of inertia to handle supply upsets. This reserve is costly in today’s market.
A question came in about machine learning versus digital twin-based learning. Bob noted that people and training are not going away but AI-based technologies can support these operators. It’s not an either-or case, but a transformation of work gets performed with technology enabling greater productivity. It’s a story we’ve seen replayed again and again over time.
Visit Bob’s LinkedIn post on embedded simulation to learn more about digital twin technology.