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INDEPENDENT PUBLICATION BY RACONTEUR.

NET #0507 08 / 03 / 2018

FUTURE
OF ENERGY
03 STRUGGLE IS ON FOR
ENERGY EFFICIENCY 05 BIG GREEN BANG IS
ROCKING POWER 06 BATTERIES SET TO
ENERGISE SECTOR

Regardless of its age, make your building


fit for the future by reducing your energy
use and cutting carbon emissions.
Find out how on page 4
RACONTEUR.NET 03

WATER-ENERGY-FOOD NEXUS

FUTURE
OF ENERGY
Life-and-death struggle
Distributed in

for energy efficiency


Published in association with
In the tangled relationship with water resources and food production,
energy efficiency is saving livelihoods and lives

JIM McCLELLAND up as the nexus itself, says Dr

I
Munang. “The urgent need is for
f we really are what we eat, then policy coherence across multiple
we are mostly water and energy ministries towards establishing
– and we are running danger- energy efficiency, specifically for
ously low on both. According to powering sustainable agro-indus-
CONTRIBUTORS the United Nations, agriculture is trialisation to accelerate much-
the largest consumer of freshwater needed socio-economic transfor-
resources on the planet, accounting mation and climate resilience,”
ROHAN BOYLE OLIVIA GAGAN
for roughly 70 per cent. More than he says.
Freelance business Senior reporter at
journalist with IJGlobal, she writes for a quarter of global energy use also On a more domestic scale, energy
expertise in energy Euromoney Institutional goes on food production and supply, efficiency is also core to a pioneer-
and the environment, Investor, and was formerly with the UN Food and Agriculture ing four-year programme to pro-
he contributes with Drapers and Organization forecasting 70 per cent mote resource management and
to Green Futures. Infrastructure Journal.
additional output needed to feed a sustainable livelihoods, currently

NOAH SEELAM/AFP/Getty Images


2050 population of nine billion. being undertaken in Afghanistan by
MAGDA IBRAHIM FELICIA JACKSON For the future of energy, water is People in Need, a Czech NGO work-
Award-winning journalist Editor at large of
essential at the level of large-scale ing to implement humanitarian
working across consumer Cleantech magazine and
and business media, her author of Conquering
power generation, not just literally relief and long-term development
articles have appeared in Carbon, she specialises in in terms of hydro, wave and tidal, projects worldwide.
The Times, The Independent the low-carbon economy. but indirectly, facilitating extrac- Seeking to boost prospects and
and Daily Mirror. tion and processing of fuels, as well build resilience, the project directly
as, importantly, providing cooling. supports around 6,500 house-
JIM McCLELLAND Cooling is critical. Research from holds, comprised of 45,500 people,
Sustainable futurist, his the World Resources Institute found where everything depends on With escalating climate change, in 75 villages throughout the prov-
specialisms include built 40 per cent of India’s thermal power everything else. the second Africa Adaptation Gap ince of Samangan. It provides for
environment, corporate
plants located in areas of water According to Pedro Faria, strate- Report warns that total water avail- training in agricultural resource
social responsibility and
ecosystem services. stress. As a consequence, 18 faced gic adviser at CDP, there are at least able for agriculture will decline by conservation and water manage-
shutdowns caused by water short- two ways of framing this challenge. more than 10 per cent. The impli- ment, establishment of commer-
ages during 2016. The total loss to “Firstly, it’s as an issue of competi- cation is that Africa’s agriculture cial fruit plantations and nurseries,
the country has been calculated at tion for resources,” he says. “Energy and food systems, currently 98 per plus introduction of energy-saving
roughly 14 terawatt-hours of ther- competes with other uses of water cent fed by rain, will increasingly stoves and home insulation.
mal electricity generation, enough for the water itself and it also com- rely on irrigation to achieve pro- Targeting a 20 per cent rise in agri-
to power Sri Lanka. petes with food as another use of ductivity. This calls for energy-ef- cultural yields, the initiative aims
In turn, water as a resource is land for biomass. ficient systems. to get 40 per cent of selected house-
uniquely susceptible to climate risk, “Secondly, it’s related to resilience. In Kenya, estimates from holds using energy-efficient tech-
Publishing manager Head of production says Mark Fletcher, global water leader How does a population find the bal- small-scale initiatives show nologies, so needing 20 per cent
Jack Pepperell Justyna O'Connell at Arup. “Whether we’re experiencing ance of resource supply and demand that using solar-powered, efficient less firewood. The energy-efficiency
too little or too much water, climate that provides the highest level of micro-irrigation is saving farmers measures are hugely important to
Production editor Digital content executive
change is felt most through its impact resilience to shocks for the three var- more than $10,000 annually in oper- the project. Accounting for at least
Benjamin Chiou Elise Ngobi
on the water cycle,” says Mr Fletcher. iables essential for human lives?” ating costs. The system conserves one in every €10 of investment, they
Managing editor Design Agriculture suffers both immedi- Solving this riddle of resilience is up to 1.9 billion litres of water a year, reduce wood-burning in homes,
Peter Archer Samuele Motta ately and incrementally. He adds: nowhere more important than in while offsetting carbon with 64,499 leading to less deforestation, which
Grant Chapman kilowatt-hours of clean energy. improves rainwater management,
“Climate change can impact through Africa, says Dr Richard Munang,
Kellie Jerrard
shocks and stresses. It can disrupt Africa regional climate change Furthermore, with Africa in dire soil quality and crop yields.
Head of design food production in the short term co-ordinator at the United Nations need of income and employment The water-energy-food resil-
Tim Whitlock by ruining single crops and also on a Environment Programme. “This prospects for its booming youthful ience gains are vital, concludes
longer-term seasonal basis.” nexus presents opportunities to cre- population, an industrialised agri- Wail Khazal, country director for
Research from the World Bank has ate income in a manner that acceler- culture sector could harvest $1 tril- Afghanistan at People in Need.
estimated that since 2001 rainfall ates realisation of multiple [UN] sus- lion in opportunities. Energy stands “Especially in rain-fed areas, con-
shocks have caused a loss of food tainable development goals (SDGs), as a critical enabler to this end. sidering the unpredictable weather
production sufficient to feed about those responsible for poverty, food However, unlocking achieve- in recent years, the nexus is crucial
Although this publication is funded through advertising and 81 million people, the equivalent of security, climate action and ecosys- ment of multiple SDGs calls for to planning not just the projects, but
sponsorship, all editorial is without bias and sponsored features the population of Germany, every tems,” he says. game-changing thinking as joined more importantly, the farming sea-
are clearly labelled. For an upcoming schedule, partnership day for an entire year. son,” he says.

98%
inquiries or feedback, please call +44 (0)20 3877 3800 or Talk of human-made climate “While the connection between all
email info@raconteur.net change inevitably brings us back to three aspects is important worldwide,
Raconteur is a leading publisher of special-interest content and
energy, acknowledges Mr Fletcher. in the case of most of Afghanistan
research. Its publications and articles cover a wide range of topics,
“Impacts of climate change are mit- and the very limited resources of
including business, finance, sustainability, healthcare, lifestyle and
technology. Raconteur special reports are published exclusively in igated by use of low-carbon renew- water available here, associated good
The Times and The Sunday Times as well as online at raconteur.net able energy rather than carbon-in- planning and preparedness can
The information contained in this publication has been obtained tensive fossil-fuel sources,” he says. prove a life-saving approach.”
from sources the Proprietors believe to be correct. However, “Energy efficiency helps reduce This is the inescapable truth of
no legal liability can be accepted for any errors. No part of this overall demand.” the water-energy-food nexus, expe-
publication may be reproduced without the prior consent of the
For sustainability, this is the tri- of global electricity supply critically rienced firsthand in the fields of
Publisher. © Raconteur Media
lemma of the water-energy-food depends on the availability of water Africa and Afghanistan. Saving
nexus, a tangled web of circular rela- energy is saving livelihoods and
@raconteur /raconteur.net @raconteur_london tionships and infinite reciprocity, World Energy Council 2016 saves lives.

raconteur.net /future-of-energy-2018
RACONTEUR.NET 03

WATER-ENERGY-FOOD NEXUS

FUTURE
OF ENERGY
Life-and-death struggle
Distributed in

for energy efficiency


Published in association with
In the tangled relationship with water resources and food production,
energy efficiency is saving livelihoods and lives

JIM McCLELLAND up as the nexus itself, says Dr

I
Munang. “The urgent need is for
f we really are what we eat, then policy coherence across multiple
we are mostly water and energy ministries towards establishing
– and we are running danger- energy efficiency, specifically for
ously low on both. According to powering sustainable agro-indus-
CONTRIBUTORS the United Nations, agriculture is trialisation to accelerate much-
the largest consumer of freshwater needed socio-economic transfor-
resources on the planet, accounting mation and climate resilience,”
ROHAN BOYLE OLIVIA GAGAN
for roughly 70 per cent. More than he says.
Freelance business Senior reporter at
journalist with IJGlobal, she writes for a quarter of global energy use also On a more domestic scale, energy
expertise in energy Euromoney Institutional goes on food production and supply, efficiency is also core to a pioneer-
and the environment, Investor, and was formerly with the UN Food and Agriculture ing four-year programme to pro-
he contributes with Drapers and Organization forecasting 70 per cent mote resource management and
to Green Futures. Infrastructure Journal.
additional output needed to feed a sustainable livelihoods, currently

NOAH SEELAM/AFP/Getty Images


2050 population of nine billion. being undertaken in Afghanistan by
MAGDA IBRAHIM FELICIA JACKSON For the future of energy, water is People in Need, a Czech NGO work-
Award-winning journalist Editor at large of
essential at the level of large-scale ing to implement humanitarian
working across consumer Cleantech magazine and
and business media, her author of Conquering
power generation, not just literally relief and long-term development
articles have appeared in Carbon, she specialises in in terms of hydro, wave and tidal, projects worldwide.
The Times, The Independent the low-carbon economy. but indirectly, facilitating extrac- Seeking to boost prospects and
and Daily Mirror. tion and processing of fuels, as well build resilience, the project directly
as, importantly, providing cooling. supports around 6,500 house-
JIM McCLELLAND Cooling is critical. Research from holds, comprised of 45,500 people,
Sustainable futurist, his the World Resources Institute found where everything depends on With escalating climate change, in 75 villages throughout the prov-
specialisms include built 40 per cent of India’s thermal power everything else. the second Africa Adaptation Gap ince of Samangan. It provides for
environment, corporate
plants located in areas of water According to Pedro Faria, strate- Report warns that total water avail- training in agricultural resource
social responsibility and
ecosystem services. stress. As a consequence, 18 faced gic adviser at CDP, there are at least able for agriculture will decline by conservation and water manage-
shutdowns caused by water short- two ways of framing this challenge. more than 10 per cent. The impli- ment, establishment of commer-
ages during 2016. The total loss to “Firstly, it’s as an issue of competi- cation is that Africa’s agriculture cial fruit plantations and nurseries,
the country has been calculated at tion for resources,” he says. “Energy and food systems, currently 98 per plus introduction of energy-saving
roughly 14 terawatt-hours of ther- competes with other uses of water cent fed by rain, will increasingly stoves and home insulation.
mal electricity generation, enough for the water itself and it also com- rely on irrigation to achieve pro- Targeting a 20 per cent rise in agri-
to power Sri Lanka. petes with food as another use of ductivity. This calls for energy-ef- cultural yields, the initiative aims
In turn, water as a resource is land for biomass. ficient systems. to get 40 per cent of selected house-
uniquely susceptible to climate risk, “Secondly, it’s related to resilience. In Kenya, estimates from holds using energy-efficient tech-
Publishing manager Head of production says Mark Fletcher, global water leader How does a population find the bal- small-scale initiatives show nologies, so needing 20 per cent
Jack Pepperell Justyna O'Connell at Arup. “Whether we’re experiencing ance of resource supply and demand that using solar-powered, efficient less firewood. The energy-efficiency
too little or too much water, climate that provides the highest level of micro-irrigation is saving farmers measures are hugely important to
Production editor Digital content executive
change is felt most through its impact resilience to shocks for the three var- more than $10,000 annually in oper- the project. Accounting for at least
Benjamin Chiou Elise Ngobi
on the water cycle,” says Mr Fletcher. iables essential for human lives?” ating costs. The system conserves one in every €10 of investment, they
Managing editor Design Agriculture suffers both immedi- Solving this riddle of resilience is up to 1.9 billion litres of water a year, reduce wood-burning in homes,
Peter Archer Samuele Motta ately and incrementally. He adds: nowhere more important than in while offsetting carbon with 64,499 leading to less deforestation, which
Grant Chapman kilowatt-hours of clean energy. improves rainwater management,
“Climate change can impact through Africa, says Dr Richard Munang,
Kellie Jerrard
shocks and stresses. It can disrupt Africa regional climate change Furthermore, with Africa in dire soil quality and crop yields.
Head of design food production in the short term co-ordinator at the United Nations need of income and employment The water-energy-food resil-
Tim Whitlock by ruining single crops and also on a Environment Programme. “This prospects for its booming youthful ience gains are vital, concludes
longer-term seasonal basis.” nexus presents opportunities to cre- population, an industrialised agri- Wail Khazal, country director for
Research from the World Bank has ate income in a manner that acceler- culture sector could harvest $1 tril- Afghanistan at People in Need.
estimated that since 2001 rainfall ates realisation of multiple [UN] sus- lion in opportunities. Energy stands “Especially in rain-fed areas, con-
shocks have caused a loss of food tainable development goals (SDGs), as a critical enabler to this end. sidering the unpredictable weather
production sufficient to feed about those responsible for poverty, food However, unlocking achieve- in recent years, the nexus is crucial
Although this publication is funded through advertising and 81 million people, the equivalent of security, climate action and ecosys- ment of multiple SDGs calls for to planning not just the projects, but
sponsorship, all editorial is without bias and sponsored features the population of Germany, every tems,” he says. game-changing thinking as joined more importantly, the farming sea-
are clearly labelled. For an upcoming schedule, partnership day for an entire year. son,” he says.

98%
inquiries or feedback, please call +44 (0)20 3877 3800 or Talk of human-made climate “While the connection between all
email info@raconteur.net change inevitably brings us back to three aspects is important worldwide,
Raconteur is a leading publisher of special-interest content and
energy, acknowledges Mr Fletcher. in the case of most of Afghanistan
research. Its publications and articles cover a wide range of topics,
“Impacts of climate change are mit- and the very limited resources of
including business, finance, sustainability, healthcare, lifestyle and
technology. Raconteur special reports are published exclusively in igated by use of low-carbon renew- water available here, associated good
The Times and The Sunday Times as well as online at raconteur.net able energy rather than carbon-in- planning and preparedness can
The information contained in this publication has been obtained tensive fossil-fuel sources,” he says. prove a life-saving approach.”
from sources the Proprietors believe to be correct. However, “Energy efficiency helps reduce This is the inescapable truth of
no legal liability can be accepted for any errors. No part of this overall demand.” the water-energy-food nexus, expe-
publication may be reproduced without the prior consent of the
For sustainability, this is the tri- of global electricity supply critically rienced firsthand in the fields of
Publisher. © Raconteur Media
lemma of the water-energy-food depends on the availability of water Africa and Afghanistan. Saving
nexus, a tangled web of circular rela- energy is saving livelihoods and
@raconteur /raconteur.net @raconteur_london tionships and infinite reciprocity, World Energy Council 2016 saves lives.

raconteur.net /future-of-energy-2018
04 FUTURE OF ENERGY RACONTEUR.NET 05

Commercial feature RENEWABLES

Big green bang is rocking energy sector


Once relegated to comments: “If it works, it could dra-
matically cut the cost of solar in
Even Shell has said that if the most
optimistic EV forecasts are correct,

Popow/ullstein bild via Getty Images


an environmental the future.”
When it comes to accelerating
then peak oil could hit in the 2020s.
Mr Bond believes it could be as soon
alternative, investment, one thing most financi- as 2021.
ers agree upon is there is no lack of Mr Amin says: “E-mobility is a
renewables are

Buildings are an
capital, but rather a lack of bankable driver for renewable energy; it’s the

becoming the projects and that means risk profile.


While risk-mitigation tools or credit
next step-change. If the EV mar-
ket follows the pattern of renewa-

most economic enhancements exist, they can raise ble energy technology over the next

opportunity not
the total cost of projects. What is four years, it will have a dramatic
energy choice changing is the nature of risk. impact on oil demand and therefore
Projections of a market tipping the global energy industry.
point are crucial to an assessment

to be wasted
of risk; when does the balance shift
between investing in the status
quo and investing in the future?
Kingsmill Bond of Carbon Tracker
FELICIA JACKSON argues that markets shift as oppor- Developments

I
tunities shift. The issue is demand;
How to achieve sustainability when nvestment in renewables must tri- as demand grows will electrification during the past few
refurbishing building stock by
ple to reach 2050 targets, warns replace power generation and what years exceeded the
Adnan Amin, director general will fuel transportation?
expectations of even
cutting energy and carbon of the International Renewable Mr Bond points out that small
01 Energy Agency (IRENA). But, for the
first time, as the costs of renewable
falls in market share can have a
profoundly disruptive impact and
the most optimistic

W
power continues to fall, due to lower argues that major tipping points supporters
hen it comes to the of UK commercial stock falling into for our guests, while enabling us to now has a light, airy and comforta- equipment costs, improvement in occur when a disruptive technol-
future of energy, build- bands F and G for Energy Performance future-proof the building and gain ble office facility that delivers energy, performance and tenders putting ogy takes only 2 to 3 per cent of the
ings are both a bad news Certificates, almost one in five prop- even better control of energy use.” carbon and cost-savings for the charity. pressure on prices, it seems there is a market. Electric vehicles (EVs),
headline and a good news erties risk becoming illegal to rent Turn Key offered a full design, A 2016 exemplar project at the real possibility of achieving that goal. unviable beyond around 50 metres Mr Amin adds that system opera- IRENA director for example, already constitute 1 “The shift from one energy sys-
story. They are responsible for 40 per on the arrival of the Minimum Energy supply, installation and maintenance London home of the UK Green Mr Amin says: “The ecosystem of because the cost becomes prohib- tors can manage a significant load general Adnan Amin per cent of sales and this is set to tem to another is not simple and,
cent of EU energy consumption and 36 Efficiency Standard (MEES) in 2018. solution to provide Fuller’s with Building Council (UK-GBC) also saw energy is changing, and we’re see- itive in deeper waters. According of renewables and, if the growth grow rapidly. undoubtedly, it will take many years
per cent of CO2 emissions. According The business imperative is, there- complete assurance throughout the Mitsubishi Electric contribute to the ing the impact of renewable energy to Statoil, Hywind can operate at in decentralisation continues, the Peak oil demand is critical to before the current system is trans-
to the European Commission, though, fore, clear and Mitsubishi Electric has refurbishment work as sales manager achievement of the lowest embod- in economic and social terms. We’ve depths of 800 metres, opening growing focus on home storage this. The International Energy formed. But the transformation of the
energy efficiency could cut both been busy helping developers and Mitch Swirles explains: “As a Diamond ied carbon footprint ever recorded passed the tipping point for power many new regions for development. systems will also contribute to the Agency projects peak oil consump- current energy system is gaining pace
impacts by at least 5 per cent. owners seize opportunities in build- Quality Partner (DQP), we have for an office refurbishment in the UK. generation for the developed and Storage continues to develop changing nature of the grid. tion in 2040, but BP’s 2018 Energy and is unstoppable. Developments
On average, older properties con- ings, new and old, big and small, from reached the highest level of partner- Such ambition, not just on the part of developing world, and I see a dec- and Mr Amin says: “If the innova- Another exciting area is per- Outlook has shifted its projections during the past few years exceeded
sume five times more energy, with a refurbished hotel and charity HQ, to ship with Mitsubishi Electric which clients, but the construction indus- ade-long cost reduction process tion and R&D we’ve seen in bat- ovskite solar cells, which can be in from mid-2040s to mid-2030s, the expectations of even the most
about 35 per cent of EU buildings County Hall on London’s South Bank. allows us to offer longer warranties. try as a whole, is driving forward the ahead of us.” tery storage continues it’ll be a solid form or sprayed on to mate- moving a decade within one year. optimistic supporters.”
now over 50. This ageing and evolving “This DQP status is also a proven green agenda, says Cat Hirst, director There has been a fundamental game-changer.” Grid management rials, transforming the potential BP forecast a 100-fold growth in It seems the fossil fuel industry
building stock brings with it a multi- FROM DERELICT SHELL TO demonstration that our work matches of learning and innovation at UK-GBC. change in perception of renewa- remains a key driver, but with grids use of the technology. While there EVs by 2040. While travel demand and policymakers have underesti-
plicity of design, specification and PRESTIGIOUS VENUE 02 the high quality of manufacturing so “There is a real business case for bles. Renewable energy is rapidly in China, Spain and Germany able have been challenges in taking the will double, higher oil demand is mated renewable energy in almost
installation challenges. Once the historic headquarters of Fuller’s know they are going to get the sustainability, which is increasingly becoming the economic alterna- to predict solar and wind accu- technology out of the lab, Moscow expected to be offset by increased every historical projection, and
Availability of proven energy-saving the Greater London Council, County best out of the system throughout its getting proven, at both organisation tive for energy provision all over the rately 24 to 48 hours ahead, this State University has reported suc- engine efficiency standards as well this may well continue. The real-
and carbon-cutting tech, however, Hall is a listed London landmark on 01 The 73-bedroom hotel, run by working life.” and building-project level,” she says. world. According to the findings of begins to overcome system conges- cess with stabilisation and 22 per as the larger number of EVs and ity, however, is the future is bright
makes rising to those challenges an the River Thames, sat across from Big Refurbishment of Fuller, Smith & Turner plc, was built in This long-term assurance is vital to “We are seeing amazing examples an IRENA report, the average cost of tion issues. cent efficiency rates. Mr Amin shared travelling. and green.
parts of County Hall
everyday reality, says Martin Fahey, Ben and the Houses of Parliament. has transformed it
1997 and extended in 2000. With the businesses such as Fuller’s that need of leadership.” onshore wind power is now compet-
head of sustainability at Mitsubishi Fast-forward to 2017 and the into a 21st-century existing air conditioning reaching the surety the investment in modern, As a member of UK-GBC, Mitsubishi itive with the cheapest fossil fuels,
Electric’s UK Living Environment majority of its third and entire fourth conference centre end of its useful working life, Fuller’s energy-efficient equipment will Electric is working hard to help marking a significant turning point.
Systems. “Addressing climate-resil- floor were transformed to provide approached Mitsubishi Electric to ask increase guest comfort, while ena- “sell” sustainability into mainstream In fact, global weighted average Cost of electricity from renewable power generation
02
ience concerns by adopting sustain- 68,000 square feet of 21st-century for a recommended contractor. bling increased centralised control built-environment markets. It is costs over the last 12 months for Levelised costs from utility-scale renewable energy 2010 2017
The upgrade
able solutions and adapting our built conference and meeting spaces for of Locality’s “We spoke to Turn Key Air and energy reporting. important to get the message out onshore wind and solar PV (pho-
environment is actually not that dif- etc.venues. Shoreditch offices Conditioning and they came up with “At Fuller’s we take our responsibil- there that deliverability is not an tovoltaic) now stand at 6 cents and 40
shows how any
ficult, in principle,” he says. “It is an In a building dating back to 1922, the a proposal that allowed us to upgrade ities to our clients, our staff and our issue. Mr Fahey concludes: “We need 10 cents per kilowatt-hour respec-
sized building
opportunity waiting to be seized.” new areas boast all the advantages can benefit from to new, energy-efficient heat recov- brand very seriously,” says Mr Hogan. to demystify and derisk the idea of tively. European offshore wind is The
For the UK to achieve an 80 per of modern heating, ventilation and energy efficiency ery air conditioning without the loss “Working closely with both the man- sustainability to convince clients that seeing subsidy-free bids at auction, average cost 36
cent cut in emissions by 2050, making air-conditioning system, designed, of any bedrooms throughout the ufacturer and one of their most cutting energy and carbon is not only while the price of solar electricity of onshore wind
buildings a better fit for the future is installed and commissioned by Cool works,” says Tony Hogan, senior prop- trusted suppliers enables us to tick all doable, but is actually being done – has fallen 73 per cent since 2010 and, power and large-scale
33
30
a must. Moreover, with 18 per cent Systems Holdings, manufactured and erty surveyor for Fuller’s. the right boxes.” the solutions and skills already exist.” according to Mr Amin, is expected solar power is now
supplied by Mitsubishi Electric. “For a working hotel this was an to at least halve in price by 2020. competitive with

US cents per kilowatt hours*


Sympathetic restoration meant work- essential requirement, which allowed SIZE IS NOT AN ISSUE A constant question is what new the cheapest
ing around listed elements and ener- our management team to continue Catering principally for the needs Mitsubishi Electric UK Living forms of renewable technology will fossil fuels
gy-efficient comfort has been guaran- providing the very best comfort of staff, rather than guests, refur- Environment Systems regu- increase economies of scale and
teed through the use of seven outdoor bishment of the London offices of larly appears in the SustMeme become attractive propositions for 20 22
condensing units on the roof, delivering Locality also gave the network of Top 500 Built Environment rank- the private sector. The IRENA chief
simultaneous heating and cooling to 72 community-led organisations oppor- ing, published by Jim McClelland says: “I’m not a gambling man. Given
fan-coil units. Air handling and mechan- tunity to provide a more comfortable, every Monday @SustMeme. the dynamism we’ve seen in the inno- Fossil fuel cost range 17
ical ventilation with heat recovery also energy-efficient environment. The company can be followed on vation process there’ll be a series of
provides fresh air to the conference We need to demystify and The upgrade to its Shoreditch build- Twitter @meuk_les and publishes hybrid options emerging in different 14
suites, while recovering up to 80 per ing necessitated use by installation useful articles on legislation such as markets. Decentralisation, for exam- 10
cent of otherwise wasted energy. derisk the idea of sustainability contractor 361 Degrees of different MEES on its blogsite http://thehub. ple, has become a big phenomenon.” 10
to convince clients that cutting air-conditioning and ventilation solu- mitsubishielectric.co.uk He does, however, see three par- 8
ENHANCING THE BRAND tions on all three floors. Diverse layouts ticular areas of significant potential 7 7 7 6
Another recent refurbishment that energy and carbon is not only and requirements ranged from high growth. The first is floating wind. 5 4 5
has delivered high-value energy effi- ceilings and exposed ductwork, through
doable, but is actually being
The Japanese are trialling it while
0
Martin Fahey ciency, combined with first-class a separate meeting pod and suspended the world’s first floating turbines
Head of sustainability
Mitsubishi Electric’s UK Living
comfort, is the upgrade to the Fox
& Goose Hotel, near Hanger Lane
done – the solutions and skills ceilings, to new designs for retention of
natural light. Thanks to the versatility of
are providing electricity to the grid
through Scotland’s Hywind project.
Biomass Geothermal Hydro Solar
photovoltaic
Concentrating
solar power
Offshore
wind
Onshore
wind
Environment Systems in Ealing. already exist the Mitsubishi Electric offering, Locality Fixed-bottom solutions become *The levelised cost is the average cost over a generating asset’s lifetime IRENA 2018
04 FUTURE OF ENERGY RACONTEUR.NET 05

Commercial feature RENEWABLES

Big green bang is rocking energy sector


Once relegated to comments: “If it works, it could dra-
matically cut the cost of solar in
Even Shell has said that if the most
optimistic EV forecasts are correct,

Popow/ullstein bild via Getty Images


an environmental the future.”
When it comes to accelerating
then peak oil could hit in the 2020s.
Mr Bond believes it could be as soon
alternative, investment, one thing most financi- as 2021.
ers agree upon is there is no lack of Mr Amin says: “E-mobility is a
renewables are

Buildings are an
capital, but rather a lack of bankable driver for renewable energy; it’s the

becoming the projects and that means risk profile.


While risk-mitigation tools or credit
next step-change. If the EV mar-
ket follows the pattern of renewa-

most economic enhancements exist, they can raise ble energy technology over the next

opportunity not
the total cost of projects. What is four years, it will have a dramatic
energy choice changing is the nature of risk. impact on oil demand and therefore
Projections of a market tipping the global energy industry.
point are crucial to an assessment

to be wasted
of risk; when does the balance shift
between investing in the status
quo and investing in the future?
Kingsmill Bond of Carbon Tracker
FELICIA JACKSON argues that markets shift as oppor- Developments

I
tunities shift. The issue is demand;
How to achieve sustainability when nvestment in renewables must tri- as demand grows will electrification during the past few
refurbishing building stock by
ple to reach 2050 targets, warns replace power generation and what years exceeded the
Adnan Amin, director general will fuel transportation?
expectations of even
cutting energy and carbon of the International Renewable Mr Bond points out that small
01 Energy Agency (IRENA). But, for the
first time, as the costs of renewable
falls in market share can have a
profoundly disruptive impact and
the most optimistic

W
power continues to fall, due to lower argues that major tipping points supporters
hen it comes to the of UK commercial stock falling into for our guests, while enabling us to now has a light, airy and comforta- equipment costs, improvement in occur when a disruptive technol-
future of energy, build- bands F and G for Energy Performance future-proof the building and gain ble office facility that delivers energy, performance and tenders putting ogy takes only 2 to 3 per cent of the
ings are both a bad news Certificates, almost one in five prop- even better control of energy use.” carbon and cost-savings for the charity. pressure on prices, it seems there is a market. Electric vehicles (EVs),
headline and a good news erties risk becoming illegal to rent Turn Key offered a full design, A 2016 exemplar project at the real possibility of achieving that goal. unviable beyond around 50 metres Mr Amin adds that system opera- IRENA director for example, already constitute 1 “The shift from one energy sys-
story. They are responsible for 40 per on the arrival of the Minimum Energy supply, installation and maintenance London home of the UK Green Mr Amin says: “The ecosystem of because the cost becomes prohib- tors can manage a significant load general Adnan Amin per cent of sales and this is set to tem to another is not simple and,
cent of EU energy consumption and 36 Efficiency Standard (MEES) in 2018. solution to provide Fuller’s with Building Council (UK-GBC) also saw energy is changing, and we’re see- itive in deeper waters. According of renewables and, if the growth grow rapidly. undoubtedly, it will take many years
per cent of CO2 emissions. According The business imperative is, there- complete assurance throughout the Mitsubishi Electric contribute to the ing the impact of renewable energy to Statoil, Hywind can operate at in decentralisation continues, the Peak oil demand is critical to before the current system is trans-
to the European Commission, though, fore, clear and Mitsubishi Electric has refurbishment work as sales manager achievement of the lowest embod- in economic and social terms. We’ve depths of 800 metres, opening growing focus on home storage this. The International Energy formed. But the transformation of the
energy efficiency could cut both been busy helping developers and Mitch Swirles explains: “As a Diamond ied carbon footprint ever recorded passed the tipping point for power many new regions for development. systems will also contribute to the Agency projects peak oil consump- current energy system is gaining pace
impacts by at least 5 per cent. owners seize opportunities in build- Quality Partner (DQP), we have for an office refurbishment in the UK. generation for the developed and Storage continues to develop changing nature of the grid. tion in 2040, but BP’s 2018 Energy and is unstoppable. Developments
On average, older properties con- ings, new and old, big and small, from reached the highest level of partner- Such ambition, not just on the part of developing world, and I see a dec- and Mr Amin says: “If the innova- Another exciting area is per- Outlook has shifted its projections during the past few years exceeded
sume five times more energy, with a refurbished hotel and charity HQ, to ship with Mitsubishi Electric which clients, but the construction indus- ade-long cost reduction process tion and R&D we’ve seen in bat- ovskite solar cells, which can be in from mid-2040s to mid-2030s, the expectations of even the most
about 35 per cent of EU buildings County Hall on London’s South Bank. allows us to offer longer warranties. try as a whole, is driving forward the ahead of us.” tery storage continues it’ll be a solid form or sprayed on to mate- moving a decade within one year. optimistic supporters.”
now over 50. This ageing and evolving “This DQP status is also a proven green agenda, says Cat Hirst, director There has been a fundamental game-changer.” Grid management rials, transforming the potential BP forecast a 100-fold growth in It seems the fossil fuel industry
building stock brings with it a multi- FROM DERELICT SHELL TO demonstration that our work matches of learning and innovation at UK-GBC. change in perception of renewa- remains a key driver, but with grids use of the technology. While there EVs by 2040. While travel demand and policymakers have underesti-
plicity of design, specification and PRESTIGIOUS VENUE 02 the high quality of manufacturing so “There is a real business case for bles. Renewable energy is rapidly in China, Spain and Germany able have been challenges in taking the will double, higher oil demand is mated renewable energy in almost
installation challenges. Once the historic headquarters of Fuller’s know they are going to get the sustainability, which is increasingly becoming the economic alterna- to predict solar and wind accu- technology out of the lab, Moscow expected to be offset by increased every historical projection, and
Availability of proven energy-saving the Greater London Council, County best out of the system throughout its getting proven, at both organisation tive for energy provision all over the rately 24 to 48 hours ahead, this State University has reported suc- engine efficiency standards as well this may well continue. The real-
and carbon-cutting tech, however, Hall is a listed London landmark on 01 The 73-bedroom hotel, run by working life.” and building-project level,” she says. world. According to the findings of begins to overcome system conges- cess with stabilisation and 22 per as the larger number of EVs and ity, however, is the future is bright
makes rising to those challenges an the River Thames, sat across from Big Refurbishment of Fuller, Smith & Turner plc, was built in This long-term assurance is vital to “We are seeing amazing examples an IRENA report, the average cost of tion issues. cent efficiency rates. Mr Amin shared travelling. and green.
parts of County Hall
everyday reality, says Martin Fahey, Ben and the Houses of Parliament. has transformed it
1997 and extended in 2000. With the businesses such as Fuller’s that need of leadership.” onshore wind power is now compet-
head of sustainability at Mitsubishi Fast-forward to 2017 and the into a 21st-century existing air conditioning reaching the surety the investment in modern, As a member of UK-GBC, Mitsubishi itive with the cheapest fossil fuels,
Electric’s UK Living Environment majority of its third and entire fourth conference centre end of its useful working life, Fuller’s energy-efficient equipment will Electric is working hard to help marking a significant turning point.
Systems. “Addressing climate-resil- floor were transformed to provide approached Mitsubishi Electric to ask increase guest comfort, while ena- “sell” sustainability into mainstream In fact, global weighted average Cost of electricity from renewable power generation
02
ience concerns by adopting sustain- 68,000 square feet of 21st-century for a recommended contractor. bling increased centralised control built-environment markets. It is costs over the last 12 months for Levelised costs from utility-scale renewable energy 2010 2017
The upgrade
able solutions and adapting our built conference and meeting spaces for of Locality’s “We spoke to Turn Key Air and energy reporting. important to get the message out onshore wind and solar PV (pho-
environment is actually not that dif- etc.venues. Shoreditch offices Conditioning and they came up with “At Fuller’s we take our responsibil- there that deliverability is not an tovoltaic) now stand at 6 cents and 40
shows how any
ficult, in principle,” he says. “It is an In a building dating back to 1922, the a proposal that allowed us to upgrade ities to our clients, our staff and our issue. Mr Fahey concludes: “We need 10 cents per kilowatt-hour respec-
sized building
opportunity waiting to be seized.” new areas boast all the advantages can benefit from to new, energy-efficient heat recov- brand very seriously,” says Mr Hogan. to demystify and derisk the idea of tively. European offshore wind is The
For the UK to achieve an 80 per of modern heating, ventilation and energy efficiency ery air conditioning without the loss “Working closely with both the man- sustainability to convince clients that seeing subsidy-free bids at auction, average cost 36
cent cut in emissions by 2050, making air-conditioning system, designed, of any bedrooms throughout the ufacturer and one of their most cutting energy and carbon is not only while the price of solar electricity of onshore wind
buildings a better fit for the future is installed and commissioned by Cool works,” says Tony Hogan, senior prop- trusted suppliers enables us to tick all doable, but is actually being done – has fallen 73 per cent since 2010 and, power and large-scale
33
30
a must. Moreover, with 18 per cent Systems Holdings, manufactured and erty surveyor for Fuller’s. the right boxes.” the solutions and skills already exist.” according to Mr Amin, is expected solar power is now
supplied by Mitsubishi Electric. “For a working hotel this was an to at least halve in price by 2020. competitive with

US cents per kilowatt hours*


Sympathetic restoration meant work- essential requirement, which allowed SIZE IS NOT AN ISSUE A constant question is what new the cheapest
ing around listed elements and ener- our management team to continue Catering principally for the needs Mitsubishi Electric UK Living forms of renewable technology will fossil fuels
gy-efficient comfort has been guaran- providing the very best comfort of staff, rather than guests, refur- Environment Systems regu- increase economies of scale and
teed through the use of seven outdoor bishment of the London offices of larly appears in the SustMeme become attractive propositions for 20 22
condensing units on the roof, delivering Locality also gave the network of Top 500 Built Environment rank- the private sector. The IRENA chief
simultaneous heating and cooling to 72 community-led organisations oppor- ing, published by Jim McClelland says: “I’m not a gambling man. Given
fan-coil units. Air handling and mechan- tunity to provide a more comfortable, every Monday @SustMeme. the dynamism we’ve seen in the inno- Fossil fuel cost range 17
ical ventilation with heat recovery also energy-efficient environment. The company can be followed on vation process there’ll be a series of
provides fresh air to the conference We need to demystify and The upgrade to its Shoreditch build- Twitter @meuk_les and publishes hybrid options emerging in different 14
suites, while recovering up to 80 per ing necessitated use by installation useful articles on legislation such as markets. Decentralisation, for exam- 10
cent of otherwise wasted energy. derisk the idea of sustainability contractor 361 Degrees of different MEES on its blogsite http://thehub. ple, has become a big phenomenon.” 10
to convince clients that cutting air-conditioning and ventilation solu- mitsubishielectric.co.uk He does, however, see three par- 8
ENHANCING THE BRAND tions on all three floors. Diverse layouts ticular areas of significant potential 7 7 7 6
Another recent refurbishment that energy and carbon is not only and requirements ranged from high growth. The first is floating wind. 5 4 5
has delivered high-value energy effi- ceilings and exposed ductwork, through
doable, but is actually being
The Japanese are trialling it while
0
Martin Fahey ciency, combined with first-class a separate meeting pod and suspended the world’s first floating turbines
Head of sustainability
Mitsubishi Electric’s UK Living
comfort, is the upgrade to the Fox
& Goose Hotel, near Hanger Lane
done – the solutions and skills ceilings, to new designs for retention of
natural light. Thanks to the versatility of
are providing electricity to the grid
through Scotland’s Hywind project.
Biomass Geothermal Hydro Solar
photovoltaic
Concentrating
solar power
Offshore
wind
Onshore
wind
Environment Systems in Ealing. already exist the Mitsubishi Electric offering, Locality Fixed-bottom solutions become *The levelised cost is the average cost over a generating asset’s lifetime IRENA 2018
06 FUTURE OF ENERGY RACONTEUR.NET 07

Commercial feature POWER STORAGE

AIZAR RALDES/AFP/Getty Images


Solving the energy crisis
Power supply is falling, leaving the UK in an energy crisis,
with increased electrification of domestic lives and a growing
Batteries set
population prompting a seismic escalation in electricity
demand. The dilemma, sustained by the decline of fossil to energise
fuel-based power plants and the rise of renewables,
is being resolved by the latest technologies power storage
Affordable battery technology is key to

T
he UK and Irish electric development of electric vehicles as well as
grids are at the forefront UK energy landscape renewable energy generation and storage,
in terms of the volume
of integrated renewa-
bles. However, because renewa-
How businesses use electricity but how reliable is the supply of the raw

39% materials used?


ble energy sources, such as wind participate in DSR

30%
(demand-side
and solar, are intermittent and can
response) programmes
change rapidly, their integration
into the grid may not provide suffi-

55%
cient power during peak demand,” are considering
says Michael Phelan, chief executive investing in battery a year to 2025, according to P&S
storage ROHAN BOYLE
and co-founder of GridBeyond, for- Market Research.

B
merly Endeco Technologies. of the UK’s electricity Batteries are also central to over-

55%
Maintaining the balance between generation is from atteries are revolutionis- coming the problem of renewa-
plan to monetise
renewable sources
energy generation and demand is cru- the battery with ing the way we use energy, ble energy intermittency. Policy-
cial to ensuring the grid remains at a grid services primarily in transport makers in several countries are
Operations at the
safe frequency of 50Hz. Technology is and storage of renewable encouraging their use in conjunc-

73%
Uyuni Salt Flats in

15%
progressively providing the solutions will combine power. About 1.1 million battery and tion with the growing number of Potosi, Bolivia
needed to manage the fluctuations in the battery with plug-in hybrid passenger cars were solar panels on homes, schools and
grid frequency, and with accessibil- other assets sold worldwide in 2017, an increase businesses. This so-called behind-
ity comes incentives for large energy increase in of 57 per cent on the previous year, the-meter deployment of batteries lithium-ion batteries will be availa- can harm communities, ecosystems

78%
consumers in the industrial and com- the amount of decrease consumption according to Bloomberg New Energy amounted to 466 megawatts in 2017, ble to meet forecast demand. Given and food production, warns Friends
mercial space to vary their energy
electricity in TWh
year on year at
during a frequency Finance. This year, sales are forecast an increase of almost 80 per cent that the booming consumer elec- To secure long-term of the Earth.
consumption. For short periods, they response event when
can help to keep the lights on when
the end of 2017 participating in a DSR
to increase by a further 40 per cent.
Although impressive, this is just a
compared with the previous year,
according to Bloomberg.
tronics industry is also depend-
ent on lithium-ion technology, the
supplies of raw The supply of cobalt is also a con-
cern, although partly because hedge
grid frequency starts to look danger-
gov.uk 2017 The Energyst Battery Storage Report 2017
hint of the change about to sweep There are many technologies in stress on the supply chain is bound materials, some funds have stockpiled the equivalent
ously high or low, known as frequency through the transport industry. use, but lithium-ion is predominant to increase dramatically. A crucial of 17 per cent of 2016 global produc-
response events. Volkswagen, Toyota and Nissan, because it is energy dense, more question will be can the battery automakers have tion. Once normalised there should
Seen as the way forward by system among others, have announced than 80 per cent efficient and can be industry keep up? started investing in be sufficient supply until 2021, when
operators and energy industry author- effectiveness) analytics can be auto- businesses to eliminate the finan- ambitious plans, while all new Volvo used in high-power and high-energy Analysis by researchers at new capacity will be needed to meet
ities, frequency response programmes mated and monitored via a cloud- cial risk associated with a standalone models will be either partially or capacity applications. The batteries the Massachusetts Institute of materials production demand, say industry analysts. Of
are enabling energy to be generated or based portal. battery. We have put the world’s first completely battery powered from contain a large number of raw mate- Technology (MIT) indicates that great concern are the environmental
removed from the grid within seconds, Another key technology for renewa- hybrids into the market and we are 2019. Jaguar Land Rover will fol- rials and, despite the name, contain for the near future there will be and humanitarian impacts of small
when needed. ble integration will continue to be bat- adding to that all the time.” low suit in 2020. Such is the drive to comparatively little lithium. The no absolute limitations on battery unregulated mining operations in
Mr Phelan says: “We’ve been man- tery storage. Renewable energy may be The UK is moving from a centralised electrify in China, the world’s big- other key elements are graphite, manufacturing due to shortages Olivetti. Although there might still the Democratic Republic of Congo
aging and rewarding industrial and system, with very large power stations gest electric vehicle market, that nickel, manganese and cobalt. of the critical metals they require. be disruptions in the supply of lith- (DRC), home to more than half of the
commercial clients’ participation into generating the majority of power, to a two major manufacturers will drop A central assumption in both the “But without proper planning, there ium, she says, these are unlikely world’s supplies of the metal.
National Grid programmes, including decentralised one, where generation internal combustion engines alto- transport and home energy stor- could be short-term bottlenecks in to disrupt battery production seri- “Our initial investigations found
frequency response, for more than five is more widely dispersed, from solar gether after 2025. The electric bus age sectors is that sufficient quan- the supplies of some metals, par- ously. New mining capacity, due to that cobalt mined by children and
years. Over time we’ve seen an increase
in the number of events, indicating that
The key lies in panels on roofs to offshore and inland
wind farms. The pace of change driven
market will grow by 33.5 per cent tities of cheap, high-performance ticularly lithium and cobalt, that
could cause temporary slowdowns
come on line in the early-2020s, will
also help to meet demand.
adults in horrendous conditions
in the DRC is entering the supply
the National Grid is finding it evermore energy flexibility by technology has created some con- in production,” says Elsa Olivetti, To secure long-term supplies of chains of some of the world’s big-
challenging to stabilise effectively as fusion for customers in terms of where assistant professor of energy stud- raw materials, some automakers gest brands,” says Seema Joshi,
renewable generation increases and and ultimately the opportunities for future energy Projected demand for global lithium ies at MIT. have started investing in materials head of business and human rights
that system inertia is reducing too.”
GridBeyond leads the UK and Irish
in technology flexibility lie.
Mr Phelan concludes: “Many of the
Thousand metric tonnes of lithium carbonate equivalent Increased demand for lithium
has pushed prices up from around
production. Great Wall Motors, for
instance, has invested in the supply
at Amnesty International. Apple,
HP and Samsung, among others,
Demand Lithium demand for rechargeable batteries
markets in providing pioneering inter- new technologies have only become $7,000 a metric tonne in 2015 to chain and Toyota Group’s trading are engaged in an effort to shed
net of things demand-side response available in the last few years. It’s 500 more than $15,000 in 2017. Similarly, unit recently acquired a 15 per cent more light on the cobalt supply
(DSR) solutions, and has developed a harnessed at times of wind and sun, about pushing boundaries and look- cobalt has gone from $25,000 a met- stake in Orocobre, an Australian chain, but it is fiendishly complex
smart grid optimisation technology but any excesses go to waste. To reduce ing at the next phase of problems to ric tonne in mid-2016 to more than lithium miner. More upstream and opaque.
platform that enables system oper- this, energy companies can use batter- solve with the grid and large energy 400 $80,000. The supply of graphite is investments are expected later in Nickel mining also has a poor envi-
ators like National Grid to balance ies to collect and store excess electric- consumers, such as frequency bal- not thought to be an issue, at least the year. ronmental record. Epidemiological
network frequency rapidly and main- ity. However, with marginal returns on ancing, capacity fulfilment, voltage not in the short term. Nickel and Both lithium mining and brine studies of workers employed in the
300
tain inertia, making greater use of investment and relatively short-term issues and tracing problems. The key manganese are used much more processing have imperfect envi- production show an association
renewable technologies and mitigate revenue streams, Mr Phelan points to a lies in energy flexibility and ultimately widely in other industries, so a jump ronmental credentials. The former between exposure to nickel com-
against blackouts. hybrid approach. in technology, and facilitated in a way in battery production is unlikely to is energy intensive and currently pounds and lung and nasal cancer.
200
At the same time, industrial and He says: “By connecting a battery to that is palatable to all involved, from have much of an impact. heavily carbon emitting, although To help reduce these and other
commercial participants benefit from an industrial or commercial site, elec- the grid to industrial, commercial and Lithium is either mined or many miners say they plan to use environmental and human costs,
significant financial rewards for fluc- tricity can be stored when it is most eventually residential consumers.” 100 extracted from brine deposits in more renewable energy. “In the short initiatives such as battery recycling
tuating their energy consumption, and abundant, and cheap, and used when South America. The latter can be term, the CO2 footprint from [lith- will need to become an integral part
automated energy savings through the demand on the grid exceeds gener- ramped up relatively rapidly, within ium] ‘hard rocks’ will be less than of the industry. It is clear that fur-
avoidance of demand peaks. In addi- ation. Combining this resilience with 0 as little as six months, compared ideal,” according to David Deak of ther regulation and better battery
tion, consumption, predictive main- an advanced DSR platform geared to 2018 2019 2020 2021 2022 2023 2024 2025 with bringing a new underground Lithium Americas. Meanwhile, the technology will be needed to rid this
tenance and OEE (overall equipment optimise savings and revenue allows Stormcrow 2017 mine into production, says Professor chemicals used in brine processing clean technology of its dirty side.
06 FUTURE OF ENERGY RACONTEUR.NET 07

Commercial feature POWER STORAGE

AIZAR RALDES/AFP/Getty Images


Solving the energy crisis
Power supply is falling, leaving the UK in an energy crisis,
with increased electrification of domestic lives and a growing
Batteries set
population prompting a seismic escalation in electricity
demand. The dilemma, sustained by the decline of fossil to energise
fuel-based power plants and the rise of renewables,
is being resolved by the latest technologies power storage
Affordable battery technology is key to

T
he UK and Irish electric development of electric vehicles as well as
grids are at the forefront UK energy landscape renewable energy generation and storage,
in terms of the volume
of integrated renewa-
bles. However, because renewa-
How businesses use electricity but how reliable is the supply of the raw

39% materials used?


ble energy sources, such as wind participate in DSR

30%
(demand-side
and solar, are intermittent and can
response) programmes
change rapidly, their integration
into the grid may not provide suffi-

55%
cient power during peak demand,” are considering
says Michael Phelan, chief executive investing in battery a year to 2025, according to P&S
storage ROHAN BOYLE
and co-founder of GridBeyond, for- Market Research.

B
merly Endeco Technologies. of the UK’s electricity Batteries are also central to over-

55%
Maintaining the balance between generation is from atteries are revolutionis- coming the problem of renewa-
plan to monetise
renewable sources
energy generation and demand is cru- the battery with ing the way we use energy, ble energy intermittency. Policy-
cial to ensuring the grid remains at a grid services primarily in transport makers in several countries are
Operations at the
safe frequency of 50Hz. Technology is and storage of renewable encouraging their use in conjunc-

73%
Uyuni Salt Flats in

15%
progressively providing the solutions will combine power. About 1.1 million battery and tion with the growing number of Potosi, Bolivia
needed to manage the fluctuations in the battery with plug-in hybrid passenger cars were solar panels on homes, schools and
grid frequency, and with accessibil- other assets sold worldwide in 2017, an increase businesses. This so-called behind-
ity comes incentives for large energy increase in of 57 per cent on the previous year, the-meter deployment of batteries lithium-ion batteries will be availa- can harm communities, ecosystems

78%
consumers in the industrial and com- the amount of decrease consumption according to Bloomberg New Energy amounted to 466 megawatts in 2017, ble to meet forecast demand. Given and food production, warns Friends
mercial space to vary their energy
electricity in TWh
year on year at
during a frequency Finance. This year, sales are forecast an increase of almost 80 per cent that the booming consumer elec- To secure long-term of the Earth.
consumption. For short periods, they response event when
can help to keep the lights on when
the end of 2017 participating in a DSR
to increase by a further 40 per cent.
Although impressive, this is just a
compared with the previous year,
according to Bloomberg.
tronics industry is also depend-
ent on lithium-ion technology, the
supplies of raw The supply of cobalt is also a con-
cern, although partly because hedge
grid frequency starts to look danger-
gov.uk 2017 The Energyst Battery Storage Report 2017
hint of the change about to sweep There are many technologies in stress on the supply chain is bound materials, some funds have stockpiled the equivalent
ously high or low, known as frequency through the transport industry. use, but lithium-ion is predominant to increase dramatically. A crucial of 17 per cent of 2016 global produc-
response events. Volkswagen, Toyota and Nissan, because it is energy dense, more question will be can the battery automakers have tion. Once normalised there should
Seen as the way forward by system among others, have announced than 80 per cent efficient and can be industry keep up? started investing in be sufficient supply until 2021, when
operators and energy industry author- effectiveness) analytics can be auto- businesses to eliminate the finan- ambitious plans, while all new Volvo used in high-power and high-energy Analysis by researchers at new capacity will be needed to meet
ities, frequency response programmes mated and monitored via a cloud- cial risk associated with a standalone models will be either partially or capacity applications. The batteries the Massachusetts Institute of materials production demand, say industry analysts. Of
are enabling energy to be generated or based portal. battery. We have put the world’s first completely battery powered from contain a large number of raw mate- Technology (MIT) indicates that great concern are the environmental
removed from the grid within seconds, Another key technology for renewa- hybrids into the market and we are 2019. Jaguar Land Rover will fol- rials and, despite the name, contain for the near future there will be and humanitarian impacts of small
when needed. ble integration will continue to be bat- adding to that all the time.” low suit in 2020. Such is the drive to comparatively little lithium. The no absolute limitations on battery unregulated mining operations in
Mr Phelan says: “We’ve been man- tery storage. Renewable energy may be The UK is moving from a centralised electrify in China, the world’s big- other key elements are graphite, manufacturing due to shortages Olivetti. Although there might still the Democratic Republic of Congo
aging and rewarding industrial and system, with very large power stations gest electric vehicle market, that nickel, manganese and cobalt. of the critical metals they require. be disruptions in the supply of lith- (DRC), home to more than half of the
commercial clients’ participation into generating the majority of power, to a two major manufacturers will drop A central assumption in both the “But without proper planning, there ium, she says, these are unlikely world’s supplies of the metal.
National Grid programmes, including decentralised one, where generation internal combustion engines alto- transport and home energy stor- could be short-term bottlenecks in to disrupt battery production seri- “Our initial investigations found
frequency response, for more than five is more widely dispersed, from solar gether after 2025. The electric bus age sectors is that sufficient quan- the supplies of some metals, par- ously. New mining capacity, due to that cobalt mined by children and
years. Over time we’ve seen an increase
in the number of events, indicating that
The key lies in panels on roofs to offshore and inland
wind farms. The pace of change driven
market will grow by 33.5 per cent tities of cheap, high-performance ticularly lithium and cobalt, that
could cause temporary slowdowns
come on line in the early-2020s, will
also help to meet demand.
adults in horrendous conditions
in the DRC is entering the supply
the National Grid is finding it evermore energy flexibility by technology has created some con- in production,” says Elsa Olivetti, To secure long-term supplies of chains of some of the world’s big-
challenging to stabilise effectively as fusion for customers in terms of where assistant professor of energy stud- raw materials, some automakers gest brands,” says Seema Joshi,
renewable generation increases and and ultimately the opportunities for future energy Projected demand for global lithium ies at MIT. have started investing in materials head of business and human rights
that system inertia is reducing too.”
GridBeyond leads the UK and Irish
in technology flexibility lie.
Mr Phelan concludes: “Many of the
Thousand metric tonnes of lithium carbonate equivalent Increased demand for lithium
has pushed prices up from around
production. Great Wall Motors, for
instance, has invested in the supply
at Amnesty International. Apple,
HP and Samsung, among others,
Demand Lithium demand for rechargeable batteries
markets in providing pioneering inter- new technologies have only become $7,000 a metric tonne in 2015 to chain and Toyota Group’s trading are engaged in an effort to shed
net of things demand-side response available in the last few years. It’s 500 more than $15,000 in 2017. Similarly, unit recently acquired a 15 per cent more light on the cobalt supply
(DSR) solutions, and has developed a harnessed at times of wind and sun, about pushing boundaries and look- cobalt has gone from $25,000 a met- stake in Orocobre, an Australian chain, but it is fiendishly complex
smart grid optimisation technology but any excesses go to waste. To reduce ing at the next phase of problems to ric tonne in mid-2016 to more than lithium miner. More upstream and opaque.
platform that enables system oper- this, energy companies can use batter- solve with the grid and large energy 400 $80,000. The supply of graphite is investments are expected later in Nickel mining also has a poor envi-
ators like National Grid to balance ies to collect and store excess electric- consumers, such as frequency bal- not thought to be an issue, at least the year. ronmental record. Epidemiological
network frequency rapidly and main- ity. However, with marginal returns on ancing, capacity fulfilment, voltage not in the short term. Nickel and Both lithium mining and brine studies of workers employed in the
300
tain inertia, making greater use of investment and relatively short-term issues and tracing problems. The key manganese are used much more processing have imperfect envi- production show an association
renewable technologies and mitigate revenue streams, Mr Phelan points to a lies in energy flexibility and ultimately widely in other industries, so a jump ronmental credentials. The former between exposure to nickel com-
against blackouts. hybrid approach. in technology, and facilitated in a way in battery production is unlikely to is energy intensive and currently pounds and lung and nasal cancer.
200
At the same time, industrial and He says: “By connecting a battery to that is palatable to all involved, from have much of an impact. heavily carbon emitting, although To help reduce these and other
commercial participants benefit from an industrial or commercial site, elec- the grid to industrial, commercial and Lithium is either mined or many miners say they plan to use environmental and human costs,
significant financial rewards for fluc- tricity can be stored when it is most eventually residential consumers.” 100 extracted from brine deposits in more renewable energy. “In the short initiatives such as battery recycling
tuating their energy consumption, and abundant, and cheap, and used when South America. The latter can be term, the CO2 footprint from [lith- will need to become an integral part
automated energy savings through the demand on the grid exceeds gener- ramped up relatively rapidly, within ium] ‘hard rocks’ will be less than of the industry. It is clear that fur-
avoidance of demand peaks. In addi- ation. Combining this resilience with 0 as little as six months, compared ideal,” according to David Deak of ther regulation and better battery
tion, consumption, predictive main- an advanced DSR platform geared to 2018 2019 2020 2021 2022 2023 2024 2025 with bringing a new underground Lithium Americas. Meanwhile, the technology will be needed to rid this
tenance and OEE (overall equipment optimise savings and revenue allows Stormcrow 2017 mine into production, says Professor chemicals used in brine processing clean technology of its dirty side.
08 FUTURE OF ENERGY RACONTEUR.NET 09

INVESTING
Global investment in energy supply ($bn) Fossil fuel Fossil fuel Fossil fuel Renewables Nuclear Electricity
percentage of supply power networks
supply investment generation
International Energy Agency 2017

2,000

67%

FOR THE FUTURE


69% 69% 69% 69% 69%
69%
68% 68% 68% 68%
67% 66% 66%
1,750
64% 64%

The future of energy undoubtedly lies with renewables. Yet, while investment 1,500
Clean energy transition
57%
continues to flow towards a cleaner future, demand for conventional resources Investment in new renewables-based power
capacity, at nearly $300 billion, remained
remains, with fossil fuels accounting for more than half of energy supplies the largest area of electricity spending in
worldwide. We are still a long way from a full transition to renewables, but for now 2016. While spending in this sector dropped
to its lowest since 2010, capacity additions
the global energy landscape is very much dependent on old ways 1,250 and expected output have surged thanks
to declines in unit costs and technology
improvements in solar and wind

1,000
Global energy investment by sector ($bn)
Electricity

57%
Oil and gas
900
750
Energy efficiency

Coal
800
Renewables in 500
transport and heat of global investment in
energy supply was directed
to fossil fuels, down from

1.7trn
700 70 per cent in 2006
250

600
$
Networks

0
Downstream

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
invested in the energy sector in
2016, accounting for 2.2 per cent
of global GDP
500
Mean levelised cost of energy ($ per megawatt hours)* Sources of finance for $1.7 trillion of energy investments
Solar (utility scale)
350
Wind 47%
400 Private sector
Nuclear
300
Some renewable prices have sunk to the same
levels as conventional energy, with solar and Coal
wind now both cheaper to produce than coal
and the same price as gas Gas (combined cycle)
Renewable
generation

250
300

200
Upstream

Industry
200
150 11%
Transport Households,
communities and
100 self-consumption

100
generation
Thermal

Buildings

50

0 0
42%
2015 2016 2015 2016 2015 2016 2015 2016 2015 2016 Government/state-owned enterprise
2009 2010 2011 2012 2013 2014 2015 2016 2017

International Energy Agency 2017 *Average costs over a generating asset’s lifetime Lazard 2017 International Energy Agency 2017
08 FUTURE OF ENERGY RACONTEUR.NET 09

INVESTING
Global investment in energy supply ($bn) Fossil fuel Fossil fuel Fossil fuel Renewables Nuclear Electricity
percentage of supply power networks
supply investment generation
International Energy Agency 2017

2,000

67%

FOR THE FUTURE


69% 69% 69% 69% 69%
69%
68% 68% 68% 68%
67% 66% 66%
1,750
64% 64%

The future of energy undoubtedly lies with renewables. Yet, while investment 1,500
Clean energy transition
57%
continues to flow towards a cleaner future, demand for conventional resources Investment in new renewables-based power
capacity, at nearly $300 billion, remained
remains, with fossil fuels accounting for more than half of energy supplies the largest area of electricity spending in
worldwide. We are still a long way from a full transition to renewables, but for now 2016. While spending in this sector dropped
to its lowest since 2010, capacity additions
the global energy landscape is very much dependent on old ways 1,250 and expected output have surged thanks
to declines in unit costs and technology
improvements in solar and wind

1,000
Global energy investment by sector ($bn)
Electricity

57%
Oil and gas
900
750
Energy efficiency

Coal
800
Renewables in 500
transport and heat of global investment in
energy supply was directed
to fossil fuels, down from

1.7trn
700 70 per cent in 2006
250

600
$
Networks

0
Downstream

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
invested in the energy sector in
2016, accounting for 2.2 per cent
of global GDP
500
Mean levelised cost of energy ($ per megawatt hours)* Sources of finance for $1.7 trillion of energy investments
Solar (utility scale)
350
Wind 47%
400 Private sector
Nuclear
300
Some renewable prices have sunk to the same
levels as conventional energy, with solar and Coal
wind now both cheaper to produce than coal
and the same price as gas Gas (combined cycle)
Renewable
generation

250
300

200
Upstream

Industry
200
150 11%
Transport Households,
communities and
100 self-consumption

100
generation
Thermal

Buildings

50

0 0
42%
2015 2016 2015 2016 2015 2016 2015 2016 2015 2016 Government/state-owned enterprise
2009 2010 2011 2012 2013 2014 2015 2016 2017

International Energy Agency 2017 *Average costs over a generating asset’s lifetime Lazard 2017 International Energy Agency 2017
10 FUTURE OF ENERGY

OIL AND GAS

Roine Magnusson/Getty Images


Global energy
mix set to
ebb and flow
Demand and supply of oil and gas are set
to change, but it is likely consumption
will continue to rise for some time,
despite environmental pressures

make assumptions. Over the longer


FELICIA JACKSON term, political and technologi-

T
cal questions multiply.” Under its
he price of oil is back around Sustainable Development Scenario,
$60 a barrel and natural gas where regulation is imposed to
is projected to provide 45 achieve deep emission cuts, the
per cent of power genera- IEA expects to see oil demand peak
tion by 2040. Rebounding market in the 2020s and be in decline by
fundamentals, quests for produc- more than a million barrels per day different scenarios, and these strat- 2015-2016 saw a 25 per cent cut in change in the industry’s invest-
tion independence and protection by the 2030s. egies need to be resilient and robust. upstream capital investment two ment strategy.” What we’re seeing
of market share, as well as geopolit- Mr Varro says the energy mix will KBC predicts no peak for oil, only a years in a row and it has remained is recognition that oil and gas will
ical tensions, continue to drive both undergo a significant shift, with the plateau at around 2040 of around low. Companies have been focus- remain important energy sources,
optimism and scepticism within lead taken by natural gas, by the 110 or 111 million barrels per day. ing on short-cycle projects with but not necessarily in the way ana-
the industry. With renewable rapid rise of renewables and energy It doesn’t show a peak and drop by average lead times down at around lysts predict.
energy projected to account for the efficiency. Continuing decline in 2050, which is the furthest most three years. Mr Varro also points No matter what, population growth,
majority of new generation capacity energy intensity, due to the chang- projections go.” out we are already seeing repur- combined with the demands of the
to 2050, what does the future hold ing structure of the global economy, While he accepts that electrifi- posing of plant; in Italy and emerging global middle classes, is
for oil and gas? is likely to have a major impact on cation will have an impact on oil France refineries are now working expected to keep consumption of
The current critical importance energy demand, he adds. demand, Mr George doesn’t believe on biodiesel. oil and gas increasing for some time
of oil and gas to the energy mix that electric vehicles will be the He says: “It’s not that some inves- to come. Flexible dynamic thinking
is undeniable, but as the markets solution everywhere. In the United tors won’t make mistakes, but and responsiveness will be crucial to
continue to evolve, it’s impor- States there will be cultural issues overall what we see is a remarkable strategic success in the sector.
tant to understand what’s driving to overcome, in India there will
changes in both demand and sup- be infrastructure challenges. He
ply. Energy demand can be effec- A fall in oil demand adds: “Our view is a slowing down Demand for conventional energy Oil Biomass/waste
tively split into three areas: elec- is expected to be of oil demand, retreat from coal
sources likely to continue Gas Hydro
tricity, where the biggest source and massive growth in natural gas.
remains coal; transport, still pre- driven by growth Petrochemicals will grow as fast as
Energy demand by source measured
in quadrillion British thermal units
Coal Other renewables`

dominantly oil based; and heat- in transport oil demand for power drops.” Nuclear

ing, which is currently dominated Natural gas use is expected to


by gas. As the demand patterns electrification increase by 45 per cent to 2040 in
250

change for these sectors, so does


the industry overall.
and efficiency the power sector. At the same time
natural gas has a more diversified
Guy Doyle, chief energy econo- improvements in set of applications than renewables,
200
mist at Mott MacDonald, points
out: “Unconventional hydrocarbons
internal combustion particularly for high-temperature
industrial use and transportation.
have already changed the global Mr Varro points out that around half
dynamics for oil and gas markets, of industrial heat use is high tem-
led by developments in explora- perature and natural gas also has an
150
tion and production technologies A fall in oil demand is expected important role in household energy
applied in the US.” Supply no longer to be driven by growth in trans- consumption. In China, for exam-
seems to be a concern. port electrification and efficiency ple, natural gas is benefiting from
According to the International improvements in internal com- air pollution regulations and its liq-
Energy Agency (IEA) World Energy bustion engines, predominantly uefied natural gas imports were up 100
Outlook 2017, overall energy demand in personal vehicles rather than 42 per cent last year.
is set to expand by 30 per cent logistics, shipping and air. With One concern of increasing impor-
between now and 2040, at around 1 today’s 800 million personal vehi- tance is stranded assets. Mr Doyle
per cent a year, with the global econ- cles projected to hit two billion by says: “On a pure energy cost basis,
omy growing at an average rate of 3.4 2040, the speed of electrification renewables will be cheaper than 50
per cent. Over the longer term, the will make a huge difference. new gas or coal generating plant.”
IEA foresees that under the existing Predictions of peak demand are Mr Varro points out that a few years
and announced policies, oil demand dependent on many variables, ago, when capital investment in the
growth will continue into the 2040s. including investment interests, oil and gas industry was around
0
As Laszlo Varro, IEA chief econ- market size and government pol- $800 billion a year, this might have
2000 2010 2015 2025 2040
omist, says: “When you tell a story icy. Stephen George, chief econo- been a fair criticism, but the invest-
about the future, unavoidably you mist at KBC, says: “Everybody uses ment cycle has changed. Exxon 2017
10 FUTURE OF ENERGY RACONTEUR.NET 11

OIL AND GAS Commercial feature

Roine Magnusson/Getty Images


Digitalisation of the power industry
Global energy is real and it’s happening now
mix set to If your organisation does not begin to adopt plant digitalisation then will your competitors leave you behind? Will adopting

ebb and flow new digital processes increase revenues in your organisation? Or do you think that digitalisation is just a buzzword and is not
here to stay as part of a long-term revolution?

Demand and supply of oil and gas are set

F
to change, but it is likely consumption our hundred senior deci- An overhaul of the power industry is
sion-makers in five process plant long overdue. Power generation net-
will continue to rise for some time, despite sectors, including power gen- works have become much more com- How do you believe that your organisation compares to its competitors
environmental pressures eration, in 21 countries world-
wide answered these questions posed
plex in recent years, thanks mainly to
the rise in renewable energy power
in your industry when it comes to plant digitalisation progress? D
by Vanson Bourne, the independ- generation and the growing number
ent market research specialist. The of small, distributed power producers. C
wide-ranging survey was commissioned Demand for power is also increasing in 60% 18%
make assumptions. Over the longer by AVEVA, a leading engineering soft- many countries, yet grid infrastructure A B
We are early adopters We are leaders
FELICIA JACKSON term, political and technologi- ware provider to the plant, power and is often old and creaking. Equipment of plant digitalisation – well ahead of others

T
cal questions multiply.” Under its marine industries. The results, pub- is both difficult and costly to main- – ahead of most in our industry
he price of oil is back around Sustainable Development Scenario, lished this month, reveal that almost tain, but tighter regulations are driving
$60 a barrel and natural gas where regulation is imposed to nine out of ten power generation com- the industry to be more efficient and B
A
is projected to provide 45 achieve deep emission cuts, the panies agreed with the first two ques- cleaner than ever. 16% 6%
per cent of power genera- IEA expects to see oil demand peak tions. Surprisingly, more than half con- Digital technology can help to solve C D
tion by 2040. Rebounding market in the 2020s and be in decline by curred with the third statement. some of these challenges. For instance, We are late adopters We are fast followers
– just getting started – inspired by others
fundamentals, quests for produc- more than a million barrels per day different scenarios, and these strat- 2015-2016 saw a 25 per cent cut in change in the industry’s invest- The digital revolution is affecting the intelligent data systems are enabling to undertake it
tion independence and protection by the 2030s. egies need to be resilient and robust. upstream capital investment two ment strategy.” What we’re seeing power industry. If the last decade was network operators to handle large vol-
of market share, as well as geopolit- Mr Varro says the energy mix will KPC predicts no peak for oil, only a years in a row and it has remained is recognition that oil and gas will about developing hardware capable umes of intermittent wind, solar and
ical tensions, continue to drive both undergo a significant shift, with the plateau at around 2040 of around low. Companies have been focus- remain important energy sources, of generating cheap, plentiful renew- other renewable power, and to accom-
optimism and scepticism within lead taken by natural gas, by the 110 or 111 million barrels per day. ing on short-cycle projects with but not necessarily in the way ana- able energy, the next one will be about modate more distributed power pro-
AVEVA Plant Digitalisation 2017
the industry. With renewable rapid rise of renewables and energy It doesn’t show a peak and drop by average lead times down at around lysts predict. making energy generation systems ducers. For plant operators, building What benefits would digital engineering
energy projected to account for the efficiency. Continuing decline in 2050, which is the furthest most three years. Mr Varro also points No matter what, population growth, smarter. Exponential growth in low-cost a database that forms a digital twin information management offer for your organisation?
majority of new generation capacity energy intensity, due to the chang- projections go.” out we are already seeing repur- combined with the demands of the processing power, advances in big data version of the physical plant can lead
to 2050, what does the future hold ing structure of the global economy, While he accepts that electrifi- posing of plant; in Italy and emerging global middle classes, is management and growing cloud capa- to the development of analytics that
0% 10% 20% 30% 40% 50% 60% 70%
Data analysis would be easier
for oil and gas? is likely to have a major impact on cation will have an impact on oil France refineries are now working expected to keep consumption of bilities, coupled with the acceleration can trigger service and maintenance
The current critical importance energy demand, he adds. demand, Mr George doesn’t believe on biodiesel. oil and gas increasing for some time in analytics and machine-learning, have actions, even before problems occur.
Our data would be more secure
of oil and gas to the energy mix that electric vehicles will be the He says: “It’s not that some inves- to come. Flexible dynamic thinking the potential to transform the way we We know that companies are embrac-
is undeniable, but as the markets solution everywhere. In the United tors won’t make mistakes, but and responsiveness will be crucial to produce, buy and sell electricity. ing digital technologies because they
continue to evolve, it’s impor- States there will be cultural issues overall what we see is a remarkable strategic success in the sector. The World Economic Forum esti- fear being left behind, but we also know We would know where all
of our data was stored
tant to understand what’s driving to overcome, in India there will mates that $1.3 trillion could be gen- that a sizable majority – four out of five
changes in both demand and sup- be infrastructure challenges. He erated by digitalising electricity gen- respondents – think they are ahead of
ply. Energy demand can be effec- A fall in oil demand adds: “Our view is a slowing down eration worldwide between 2016 and the curve. Some 78 per cent classify
More informed decisions could be
made from the insights we gain
Demand for conventional energy Oil Biomass/waste
tively split into three areas: elec- is expected to be of oil demand, retreat from coal
sources likely to continue Gas Hydro
2025 . It lists five initiatives in particular themselves as early adopters of plant
We would be able to transfer
tricity, where the biggest source and massive growth in natural gas. – better management of asset perfor- digitalisation, while some 18 per cent
remains coal; transport, still pre- driven by growth Petrochemicals will grow as fast as
Energy demand by source measured
in quadrillion British thermal units
Coal Other renewables`
mance, real-time platforms data, inte- believe they are leaders in the field and
our data more easily

dominantly oil based; and heat- in transport oil demand for power drops.” Nuclear gration of energy storage and custom- well ahead of the majority. Just 16 per Data would not become siloed
ing, which is currently dominated Natural gas use is expected to er-centric solutions – that it believes cent confess to being late adopters,
by gas. As the demand patterns electrification increase by 45 per cent to 2040 in
250
will individually unlock at least $100 bil- while 6 per cent say they are followers, We would store less irrelevant data
change for these sectors, so does
the industry overall.
and efficiency the power sector. At the same time
natural gas has a more diversified
lion of value over the ten-year period.
Transformation of the industry is
waiting to be inspired by others.
So how exactly do power companies
Guy Doyle, chief energy econo- improvements in set of applications than renewables, already underway, according to a see digital technology helping them?
200 majority of survey respondents. Twenty Most think it will support the core fun- from 10 per cent to 50 per cent, with an an intelligent engineering master data and uncertainty to what is a relatively
mist at Mott MacDonald, points
out: “Unconventional hydrocarbons
internal combustion particularly for high-temperature
industrial use and transportation. eight per cent believe it is happening damentals of their businesses. More average of just over 27 per cent. management system can be key to conservative, risk-averse industry. This
have already changed the global Mr Varro points out that around half now, while a further 46 per cent say specifically, over half cited cost man- Economics and technical advantages helping organisations improve on these timely study of digitalisation lifts the
dynamics for oil and gas markets, of industrial heat use is high tem- plant digitalisation is a rapidly growing agement as a major focus, while 50 per will drive digitalisation in the energy numbers. More than 60 per cent say lid on what organisations are currently
led by developments in explora- perature and natural gas also has an focus across the industry with most cent viewed it as a means of optimising system, but major challenges remain. data analysis would be easier with digi- doing to join the digital revolution. It
150
tion and production technologies A fall in oil demand is expected important role in household energy organisations working on their strategy processes. A slightly smaller percent- Power companies are awash with data tal information management and 40 per reveals just how big a priority digital is,
applied in the US.” Supply no longer to be driven by growth in trans- consumption. In China, for exam- and initiatives. The remainder think it age picked out operations and main- – a modern gas-fired power plant is cent say it would enable them to make what factors are driving digital agen-
seems to be a concern. port electrification and efficiency ple, natural gas is benefiting from is only slowly gaining traction or in the tenance, alongside improvements in equipped with more than 10,000 sen- more informed decisions. das, the challenges holding companies
According to the International improvements in internal com- air pollution regulations and its liq- early stages of development. production capacity, safety and infor- sors – but most have a long way to go Digitalisation comes with up-front back and which technologies compa-
Energy Agency (IEA) World Energy bustion engines, predominantly uefied natural gas imports were up 100 mation management. before they can use this effectively to costs, but technology’s ability to nies are investing in.
Outlook 2017, overall energy demand in personal vehicles rather than 42 per cent last year. Homing in on production perfor- trim costs, increase sales, and boost improve productivity can pay dividends.
is set to expand by 30 per cent logistics, shipping and air. With One concern of increasing impor- mance, every respondent agreed that efficiency and reliability. Among the “The case for investing in plant digital- ¹Digital Transformation of Industries: Electricity,
between now and 2040, at around 1 today’s 800 million personal vehi- tance is stranded assets. Mr Doyle digitalisation has the potential to boost 400 companies surveyed, not one uses isation is a strong one,” says Tim Miser,
Digitalisation comes
World Economic Forum/Accenture 2016
per cent a year, with the global econ- cles projected to hit two billion by says: “On a pure energy cost basis, the production capacity of their facil- more than half the data they collect. The associate editor of Power Engineering . ²Ones & Zeros: How Digital Power Plants Are
omy growing at an average rate of 3.4
per cent. Over the longer term, the
2040, the speed of electrification
will make a huge difference.
renewables will be cheaper than
new gas or coal generating plant.”
50 with up-front costs, ity by at least 10 per cent. The average
hoped for was 29 per cent, but one-
average is 27 per cent.
More than 90 per cent of respondents
“Indeed, it is because of the enormous
capital expenditures required by the
Leveraging Big Data and Analytics for Greater
Reliability and Profit, Power Engineering 2016
IEA foresees that under the existing Predictions of peak demand are Mr Varro points out that a few years but technology’s third said they thought it would raise concede they have difficulties embrac- industry that it becomes so important
production by 30 to 40 per cent, with ing digital engineering information to wring every last drop of productiv- To download the full report
ability to improve
and announced policies, oil demand dependent on many variables, ago, when capital investment in the
growth will continue into the 2040s. including investment interests, oil and gas industry was around a smaller number hoping for up to a 50 management. Incomplete and inaccu- ity from power assets, and software is Digitalisation in Power Generation
productivity can
0
As Laszlo Varro, IEA chief econ- market size and government pol- $800 billion a year, this might have per cent increase. The survey also found rate data are a problem for nearly 50 indispensable in this effort.” please visit: aveva.com/digitalisation
2000 2010 2015 2025 2040
omist, says: “When you tell a story icy. Stephen George, chief econo- been a fair criticism, but the invest- that companies think digitalisation will per cent, while 40 per cent cite a lack of And digitalisation will bring great
about the future, unavoidably you mist at KBC, says: “Everybody uses ment cycle has changed. Exxon 2017 pay dividends reduce operating costs by anywhere real-time data as an issue. Establishing rewards. But it will also bring change
12 FUTURE OF ENERGY RACONTEUR.NET 13

Commercial feature OPINION COLUMN DIGITISATION AND SECURITY

How to outsmart ‘There’s a whole world Combating hackers who threaten power
of export opportunities
the future out there, so make sure
In an age of digital
connectivity,
energy networks
Understand energy opportunities today your company is first are increasingly
to create an energy-resilient tomorrow
in line come Brexit’ vulnerable to crippling
cyberattacks by

T
criminals, rogue

T
he way energy is generated
and consumed around the
world has changed, and will
his March sees the Energy
Industries Council (EIC) turn
A key reason is that developing new
energy sector export markets takes, hackers or hostile states
continue to change for the 75, making it one of the oldest on average, three years to yield prof-
rest of our lives. While there are many trade associations in the world. its; too long for many companies to
worst-case scenarios in business March 2018 also marks a year since the wait when cash strapped. Companies
crisis management, an energy-related UK formally triggered Article 50. have typically chosen faster routes
failure ranks among the most frequent With the UK officially leaving the to cash generation, focusing on core
and most damaging, yet it remains one European Union on March 29, 2019 the customer retention through prod-
of the least well prepared for. countdown to Brexit is starting to feel uct and service innovation; a good OLIVIA GAGAN

F
The energy landscape is being very real. The next 12 months will be strategy, but often providing lower
reshaped by the shift away from of vital importance for UK businesses growth rates than exports. or most of us, cybersecurity
traditional, centralised power gen- to take the right actions to ensure they Frustratingly, there are many govern- might call to mind one-off irri-
eration towards a decentralised are as prepared as possible. ment agencies that are available to help tating computer bugs, strug-
model that brings renewable energy The last few years have been among companies to accelerate their export gling to remember online
sources such as solar, wind and tidal some of the toughest in the energy campaigns and build trading links passwords or a teen hacker operat-
into the energy mix. Organisations industry and, even with improving oil around the world, but our studies show ing out of a suburban bedroom. For

Jesse Collins/Unsplash
that rely on constant, uninterrupted prices, the uncertainty around Brexit that only about 20 per cent of businesses governments and corporations, how-
energy from a single source provider means it may get even harder in the are aware of, or utilise, this support. ever, understanding how to prevent
are in danger of being left behind by short term. So, what can companies do We work closely with the Department and counter attacks on computer sys-
the broadening energy landscape to grow during these challenging times? for International Trade (DIT), UK tems and data is now key to national,
and vulnerable to energy-related Well, during my time as EIC chief Export Finance (UKEF) and Scottish and international, security.
pitfalls that lie ahead. executive, I’ve had the opportunity Development International (SDI) to Attacks are becoming more fre-
And therein lies the problem: reli- to speak to and learn from hundreds support their export strategies, prod- quent and more costly on both an
ance. Organisations need to become of UK suppliers of all sizes, and cov- ucts and services, including organis- economic and human scale. The together with the economy and to get to grips with the issue. “Many do not have effective cybersecurity
less energy reliant and more energy ering all energy sectors, from tier-1 ing round tables with ministers. May 2017 WannaCry attack infected national disasters.” of them want to address it; they just measures in place.
Now cybersecurity

81%
resilient by investing in their own EPC (engineering, procurement and UKEF has the potential to create computer systems in 150 countries, Mr Simonovich adds that in 2018 don’t know where to start,” he says. Ms Schulz-Kamm wants govern-
energy-producing capabilities as data to PowerRadar, a cloud-based construction) oil and gas contrac- step-change export growth. We sup- exposing the online security weak- energy looks set to be the most “We also have a global shortage of ments to go further, and is lobby-
well as making the energy they use analytics platform, to track energy tors through to small family-run port UKEF export showcases, procure- nesses of major institutions around attacked infrastructure sector. But skills to address the new internet of is the top security ing for the European Commission to
go even further. consumption across the organisa- technology firms in renewables. ment portals for energy projects being the globe. In the UK, the health what makes the industry a particu- things (IoT) environment.” issue for most energy work with the United States and other
What makes an energy-related failure tion and to identify potential equip- Many have put incredible strategies financed by UKEF. In return for fund- service was hit, with an estimated lar focus for hackers? He posits that The IoT is of great significance to superpowers to create global cyber-
so hard to protect against, and there- ment failures before they happen.
of UK businesses experienced an energy-
related failure in the past 12 months in place which have enabled them to ing, these projects must include a min- 19,494 appointments cancelled and in both developed and developing the energy sector, and a key reason companies, together security standards. “If we set out
fore so damaging to business, is that Organisations that have already flourish even during the downturn. imum of 20 per cent UK content; it’s a ambulances diverted, according to countries, it is an industry with why energy companies and citizens with the economy basic international rules, companies

67%
it’s almost impossible to know when introduced Panoramic Power to However, one strategy is notable by its fantastic initiative, shortcutting inter- NHS England. ageing, yet still essential, power alike must take cybersecurity seri- will begin to innovate in cybersecu-
one is going to happen. But when we their systems have benefited from relative lack of uptake, of particular sig- national growth for experienced and The energy industry did not escape plants, pipelines, substations, stor- ously. Simply put, the IoT refers and national rity to meet them,” she says. “These
start to look at their various causes, we
begin to see there are in fact ways that
reduced maintenance costs, pre-
vented unscheduled downtime
nificance given the new horizons we’ll
be facing post-Brexit, that of export.
first-time exporters in some of the big-
gest energy projects around the world.
harm either. Indian power util-
ity West Bengal State Electricity
age units and transmission cables.
Many of these are “assets that have
to the vast web of physical objects
with built-in internet and elec-
disasters businesses will start to compete with
each other, creating a whole industry
businesses can be better protected. and seen savings upwards of 50 suffered power supply problems due to According to government statis- DIT and SDI have trading experts Distribution Company, which has 17.8 not been maintained, patched tronic connectivity, which can send and jobs. It will help build trust in the
per cent. poor maintenance of equipment tics, only 11 per cent of companies located around the world who are million energy customers, found the and hardened” to protect against and receive data. internet of things, too.”
For organisations that want to take across all sectors export and the specifically there to help UK com- malicious software had spread across digital threats. The energy industry is a major ele- Cybersecurity must evolve and

39%
greater control of their energy usage energy industry appears to be no dif- panies make connections, establish its computers, leaving employees Cyberattacks on energy assets can ment of the IoT ecosystem. Globally, So how do we prevent attacks on adapt as quickly as the malicious
by being able to produce their own, ferent. Indeed, EIC Survive & Thrive local partnerships and grow busi- unable to access company data unless also be used as an act of warfare. utilities are expected to spend $73 bil- such energy infrastructure, both software it is supposed to prevent.

Organisations combined heat and power (CHP)


offers an effective two for one.
2017 analysis found that only 8 per
cent of companies surveyed focused
ness globally. Business owners and
sales leaders normally are not afraid
a ransom was paid.
Leo Simonovich, global head
Power is needed by everyone, and
so attacks and subsequent energy
lion on the IoT in 2018, according to
the International Data Corporation,
large and small? Governments and
industry need to work together to cre-
But when it comes to securing
the data and online operations of
need to become Gas remains far cheaper than elec- experienced unscheduled downtime as
the result of an energy-related failure
on new export markets as their pri- to take free help, so why not here as of cybersecurity at Europe’s big- outages can bring entire cities to with spending focused on smart grids ate some basic international cyber- government, businesses and citi-
tricity, so with gas-powered CHP gen-
less energy reliant
mary growth strategy. Given the well? Funding is also often available gest electronics business Siemens, their knees. In Ukraine, for exam- for electricity, gas and water, which security standards, says Eva Schulz- zens, it seems there is still plenty
erators on-site, organisations have

52%
phenomenal results that exporting to subsidise attendance at overseas says the effect of WannaCry on the ple, a December 2016 cyberattack use digital data to react to fluctuations Kamm, Siemens’ head of global of work to do in 2018. “If there are
and more energy a cost-efficient alternative energy
source that protects them from local
can achieve, and with Brexit loom-
ing, this is surprising and worrying.
exhibitions and delegations.
There’s a whole world of opportu-
global energy industry has been
profound. “It brought cybersecu-
on the power grid saw parts of the
capital Kiev experience a blackout.
in usage and demand. Within homes,
smart devices and apps, which allow
government affairs. Some countries,
such as Canada, are already drafting
still vulnerabilities in cybersecu-
rity where a 12 year old could fea-
resilient grid failure, as well protecting against There are brilliant exceptions of nities out there. Make sure your com- rity to the boardroom level,” he Mr Simonovich says the scale and a user to control their home’s energy fresh legislation and, as of May 2018, sibly disrupt a power plant, there’s
future rises in energy prices, in par- course. One example of a company pany is first in line come March 2019. says. “Now it’s the top security complexity of cybersecurity threats consumption via the internet, are also the UK government will fine organ- something wrong,” Ms Schulz-
agree that the cost of building an energy
ticular non-commodity costs which choosing export as its growth strategy issue for most energy companies, make it hard for energy companies expected to multiply. isations up to £17 million if they Kamm concludes.
resilience strategy is far less than the
currently make up over half of their bill. cost of an energy-related failure in the downturn is the winner of the
Ageing and poorly maintained CHP units are also able to cap- 2017 EIC Export Award, PJ Valves.
equipment are among the common- ture the additional heat they gen- The Resilience Report Headquartered in Hertford, PJ
est causes of energy-related fail- erate so, instead of wasting it, this Valves manufactures valves primar-
ures, but maintaining every piece of can be used as a cost-efficient heat ily for the oil and gas sector. In 2011
equipment and machinery so that it supply – less external reliance, more Please visit it took the decision to expand into

320W
remains in peak working order is an internal resilience. www.centricabusinesssolutions. new markets, setting up offices in
absurdly expensive way for any large Centrica Business Solutions has com/resilience Houston, Texas and then Singapore.
organisation to prevent breakdowns. surveyed energy decision-makers to download The Resilience Report Today export sales account for more

Half-Cell Module
Fortunately, there are more elegant across multiple industries to assess and learn more about how energy than 70 per cent of its revenues,
and cost-effective solutions that the challenges posed by a lack of resilience can help you and your compared to 20 per cent in 2011. To
are now available to help businesses energy continuity. The results from organisation to outsmart the future put a figure on it, that’s about $30
become more energy resilient. this survey, along with Centrica’s million over three years.
Panoramic Power, for example, recommendations on how to reduce It’s clear that finding new markets
uses self-powering sensors that exposure to energy-related failures for your products can pay off. So the Stuart Broadley Half is more when it comes to solar cells
attach to energy-using equipment and unstable energy markets, can be obvious question is why aren’t more Chief executive
and wirelessly transmit real-time found in The Resilience Report. businesses doing it? Energy Industries Council
12 FUTURE OF ENERGY RACONTEUR.NET 13

Commercial feature OPINION COLUMN DIGITISATION AND SECURITY

How to outsmart ‘There’s a whole world Combating hackers who threaten power
of export opportunities
the future out there, so make sure
In an age of digital
connectivity,
energy networks
Understand energy opportunities today your company is first are increasingly
to create an energy-resilient tomorrow
in line come Brexit’ vulnerable to crippling
cyberattacks by

T
criminals, rogue

T
he way energy is generated
and consumed around the
world has changed, and will
his March sees the Energy
Industries Council (EIC) turn
A key reason is that developing new
energy sector export markets takes, hackers or hostile states
continue to change for the 75, making it one of the oldest on average, three years to yield prof-
rest of our lives. While there are many trade associations in the world. its; too long for many companies to
worst-case scenarios in business March 2018 also marks a year since the wait when cash strapped. Companies
crisis management, an energy-related UK formally triggered Article 50. have typically chosen faster routes
failure ranks among the most frequent With the UK officially leaving the to cash generation, focusing on core
and most damaging, yet it remains one European Union on March 29, 2019 the customer retention through prod-
of the least well prepared for. countdown to Brexit is starting to feel uct and service innovation; a good OLIVIA GAGAN

F
The energy landscape is being very real. The next 12 months will be strategy, but often providing lower
reshaped by the shift away from of vital importance for UK businesses growth rates than exports. or most of us, cybersecurity
traditional, centralised power gen- to take the right actions to ensure they Frustratingly, there are many govern- might call to mind one-off irri-
eration towards a decentralised are as prepared as possible. ment agencies that are available to help tating computer bugs, strug-
model that brings renewable energy The last few years have been among companies to accelerate their export gling to remember online
sources such as solar, wind and tidal some of the toughest in the energy campaigns and build trading links passwords or a teen hacker operat-
into the energy mix. Organisations industry and, even with improving oil around the world, but our studies show ing out of a suburban bedroom. For

Jesse Collins/Unsplash
that rely on constant, uninterrupted prices, the uncertainty around Brexit that only about 20 per cent of businesses governments and corporations, how-
energy from a single source provider means it may get even harder in the are aware of, or utilise, this support. ever, understanding how to prevent
are in danger of being left behind by short term. So, what can companies do We work closely with the Department and counter attacks on computer sys-
the broadening energy landscape to grow during these challenging times? for International Trade (DIT), UK tems and data is now key to national,
and vulnerable to energy-related Well, during my time as EIC chief Export Finance (UKEF) and Scottish and international, security.
pitfalls that lie ahead. executive, I’ve had the opportunity Development International (SDI) to Attacks are becoming more fre-
And therein lies the problem: reli- to speak to and learn from hundreds support their export strategies, prod- quent and more costly on both an
ance. Organisations need to become of UK suppliers of all sizes, and cov- ucts and services, including organis- economic and human scale. The together with the economy and to get to grips with the issue. “Many do not have effective cybersecurity
less energy reliant and more energy ering all energy sectors, from tier-1 ing round tables with ministers. May 2017 WannaCry attack infected national disasters.” of them want to address it; they just measures in place.
Now cybersecurity

81%
resilient by investing in their own EPC (engineering, procurement and UKEF has the potential to create computer systems in 150 countries, Mr Simonovich adds that in 2018 don’t know where to start,” he says. Ms Schulz-Kamm wants govern-
energy-producing capabilities as data to PowerRadar, a cloud-based construction) oil and gas contrac- step-change export growth. We sup- exposing the online security weak- energy looks set to be the most “We also have a global shortage of ments to go further, and is lobby-
well as making the energy they use analytics platform, to track energy tors through to small family-run port UKEF export showcases, procure- nesses of major institutions around attacked infrastructure sector. But skills to address the new internet of is the top security ing for the European Commission to
go even further. consumption across the organisa- technology firms in renewables. ment portals for energy projects being the globe. In the UK, the health what makes the industry a particu- things (IoT) environment.” issue for most energy work with the United States and other
What makes an energy-related failure tion and to identify potential equip- Many have put incredible strategies financed by UKEF. In return for fund- service was hit, with an estimated lar focus for hackers? He posits that The IoT is of great significance to superpowers to create global cyber-
so hard to protect against, and there- ment failures before they happen.
of UK businesses experienced an energy-
related failure in the past 12 months in place which have enabled them to ing, these projects must include a min- 19,494 appointments cancelled and in both developed and developing the energy sector, and a key reason companies, together security standards. “If we set out
fore so damaging to business, is that Organisations that have already flourish even during the downturn. imum of 20 per cent UK content; it’s a ambulances diverted, according to countries, it is an industry with why energy companies and citizens with the economy basic international rules, companies

67%
it’s almost impossible to know when introduced Panoramic Power to However, one strategy is notable by its fantastic initiative, shortcutting inter- NHS England. ageing, yet still essential, power alike must take cybersecurity seri- will begin to innovate in cybersecu-
one is going to happen. But when we their systems have benefited from relative lack of uptake, of particular sig- national growth for experienced and The energy industry did not escape plants, pipelines, substations, stor- ously. Simply put, the IoT refers and national rity to meet them,” she says. “These
start to look at their various causes, we
begin to see there are in fact ways that
reduced maintenance costs, pre-
vented unscheduled downtime
nificance given the new horizons we’ll
be facing post-Brexit, that of export.
first-time exporters in some of the big-
gest energy projects around the world.
harm either. Indian power util-
ity West Bengal State Electricity
age units and transmission cables.
Many of these are “assets that have
to the vast web of physical objects
with built-in internet and elec-
disasters businesses will start to compete with
each other, creating a whole industry
businesses can be better protected. and seen savings upwards of 50 suffered power supply problems due to According to government statis- DIT and SDI have trading experts Distribution Company, which has 17.8 not been maintained, patched tronic connectivity, which can send and jobs. It will help build trust in the
per cent. poor maintenance of equipment tics, only 11 per cent of companies located around the world who are million energy customers, found the and hardened” to protect against and receive data. internet of things, too.”
For organisations that want to take across all sectors export and the specifically there to help UK com- malicious software had spread across digital threats. The energy industry is a major ele- Cybersecurity must evolve and

39%
greater control of their energy usage energy industry appears to be no dif- panies make connections, establish its computers, leaving employees Cyberattacks on energy assets can ment of the IoT ecosystem. Globally, So how do we prevent attacks on adapt as quickly as the malicious
by being able to produce their own, ferent. Indeed, EIC Survive & Thrive local partnerships and grow busi- unable to access company data unless also be used as an act of warfare. utilities are expected to spend $73 bil- such energy infrastructure, both software it is supposed to prevent.

Organisations combined heat and power (CHP)


offers an effective two for one.
2017 analysis found that only 8 per
cent of companies surveyed focused
ness globally. Business owners and
sales leaders normally are not afraid
a ransom was paid.
Leo Simonovich, global head
Power is needed by everyone, and
so attacks and subsequent energy
lion on the IoT in 2018, according to
the International Data Corporation,
large and small? Governments and
industry need to work together to cre-
But when it comes to securing
the data and online operations of
need to become Gas remains far cheaper than elec- experienced unscheduled downtime as
the result of an energy-related failure
on new export markets as their pri- to take free help, so why not here as of cybersecurity at Europe’s big- outages can bring entire cities to with spending focused on smart grids ate some basic international cyber- government, businesses and citi-
tricity, so with gas-powered CHP gen-
less energy reliant
mary growth strategy. Given the well? Funding is also often available gest electronics business Siemens, their knees. In Ukraine, for exam- for electricity, gas and water, which security standards, says Eva Schulz- zens, it seems there is still plenty
erators on-site, organisations have

52%
phenomenal results that exporting to subsidise attendance at overseas says the effect of WannaCry on the ple, a December 2016 cyberattack use digital data to react to fluctuations Kamm, Siemens’ head of global of work to do in 2018. “If there are
and more energy a cost-efficient alternative energy
source that protects them from local
can achieve, and with Brexit loom-
ing, this is surprising and worrying.
exhibitions and delegations.
There’s a whole world of opportu-
global energy industry has been
profound. “It brought cybersecu-
on the power grid saw parts of the
capital Kiev experience a blackout.
in usage and demand. Within homes,
smart devices and apps, which allow
government affairs. Some countries,
such as Canada, are already drafting
still vulnerabilities in cybersecu-
rity where a 12 year old could fea-
resilient grid failure, as well protecting against There are brilliant exceptions of nities out there. Make sure your com- rity to the boardroom level,” he Mr Simonovich says the scale and a user to control their home’s energy fresh legislation and, as of May 2018, sibly disrupt a power plant, there’s
future rises in energy prices, in par- course. One example of a company pany is first in line come March 2019. says. “Now it’s the top security complexity of cybersecurity threats consumption via the internet, are also the UK government will fine organ- something wrong,” Ms Schulz-
agree that the cost of building an energy
ticular non-commodity costs which choosing export as its growth strategy issue for most energy companies, make it hard for energy companies expected to multiply. isations up to £17 million if they Kamm concludes.
resilience strategy is far less than the
currently make up over half of their bill. cost of an energy-related failure in the downturn is the winner of the
Ageing and poorly maintained CHP units are also able to cap- 2017 EIC Export Award, PJ Valves.
equipment are among the common- ture the additional heat they gen- The Resilience Report Headquartered in Hertford, PJ
est causes of energy-related fail- erate so, instead of wasting it, this Valves manufactures valves primar-
ures, but maintaining every piece of can be used as a cost-efficient heat ily for the oil and gas sector. In 2011
equipment and machinery so that it supply – less external reliance, more Please visit it took the decision to expand into

320W
remains in peak working order is an internal resilience. www.centricabusinesssolutions. new markets, setting up offices in
absurdly expensive way for any large Centrica Business Solutions has com/resilience Houston, Texas and then Singapore.
organisation to prevent breakdowns. surveyed energy decision-makers to download The Resilience Report Today export sales account for more

Half-Cell Module
Fortunately, there are more elegant across multiple industries to assess and learn more about how energy than 70 per cent of its revenues,
and cost-effective solutions that the challenges posed by a lack of resilience can help you and your compared to 20 per cent in 2011. To
are now available to help businesses energy continuity. The results from organisation to outsmart the future put a figure on it, that’s about $30
become more energy resilient. this survey, along with Centrica’s million over three years.
Panoramic Power, for example, recommendations on how to reduce It’s clear that finding new markets
uses self-powering sensors that exposure to energy-related failures for your products can pay off. So the Stuart Broadley Half is more when it comes to solar cells
attach to energy-using equipment and unstable energy markets, can be obvious question is why aren’t more Chief executive
and wirelessly transmit real-time found in The Resilience Report. businesses doing it? Energy Industries Council
14 FUTURE OF ENERGY

DECENTRALISED ENERGY

Switching on the billion


Power supply
through clean micro
and minigrids
is empowering
disadvantaged
people in remote
areas of the world

MAGDA IBRAHIM

A
round 1.1 billion people glob-
ally have no access to elec-
tricity, with 95 per cent in
rural locations in sub-Saha-
ran Africa and developing countries
in Asia. However, the United Nations
has set an ambitious sustainable
development goal to ensure univer-
sal access to affordable, reliable and
modern energy services by 2030. Development Solutions co-found- gap. While hydropower has typically
And there’s a decentralised solu- ers Clementine Chambon and Amit been the energy source of choice,
tion that could play a significant role Saraogi, who launched their first notably for the national grid, solar
in promoting greater democracy of minigrid in the northern state of microgrids are an exciting prospect,
power supply and bringing people Uttar Pradesh last summer. says Gham Power general manager
out of poverty. Mini grids, or smaller Powering up to 100 households Anjal Niraula.
capacity microgrids, are among a and providing irrigation to farmers Energy cuts of up to 18 hours a day
burgeoning supply of off-grid elec- in Sarvantara village, Ms Chambon meant urban businesses incurred
trification solutions, alongside stan- says the socio-economic impact is high costs of using back-up die-
dalone home systems. evident, with solar-powered light- sel generators, he says, creating a
Global microgrid capacity is ing displacing kerosene lamps and microgrid opportunity. “We realised
expected to grow from 1.4 gigawatts businesses able to earn around 50 we could do the same in rural areas
(GW) in 2015 to 7.6GW in 2024, accord- per cent more from increased effi- where extension of the transmission
ing to Navigant Research, while decen- ciency. “There is a realisation that line is not feasible or very expen-
tralised renewables are the source of 6 decentralised energy is part of the sive,” says Mr Niraula.
per cent of new electricity access, the solution, but the challenge is how Gham Power is focusing on cre-
International Energy Agency reports. to implement that at ground level,” ating multiple clusters of three or
“Microgrids democratise electric- she adds. four microgrids; its Khotang cluster,
ity delivery,” says Harish Hande, north east of Kathmandu, reaches
chief executive at the India-based 102 households and 87 businesses. It
not-for-profit SELCO Foundation, has proved most successful for pro-
which has been replicating success- ductive uses, with local entrepre-
ful models of decentralised energy
since launching in 2010 and reached
No one yet has neurs increasing revenue, leading to
wider economic benefits.
more than half a million end-users to stumbled across the “Microgrids are misunderstood
date. “A shift from waiting for energy because there can be a focus on
to flow, to active generation and con-
jackpot to roll it out comparing cost on a kilowatt/hour
sumption of energy is important. A basis and asking why the poorest
microgrid will not remove poverty, are being supplied with expensive
but is a powerful tool.” energy,” says Mr Niraula. “But they
Collaboration of financial insti- The pair plan to develop 250 min- are displacing dirty energy and
tutions, innovative technology and igrids over the next five years, increasing revenue for local people,
communities is critical for scalabil- although Mr Saraogi concedes that and no one has yet quantified that.”
ity, he says, ultimately impacting on “navigating the policy environment The economic need for reliable
matthew.hirst@util- markers such as health, education can be a challenge”. energy was brought into sharp focus
igroup.com and gender equality. “There is a per- For Dr Philip Sandwell, researcher in Nigeria in 2016, when thousands
ception the poor will not pay, so are at the Grantham Institute – Climate of shops in Kano State’s Sabon Gari
high risk, but when we go to a new Change and the Environment at market, powered by diesel genera-
location, we take bankers from an Imperial College London, while gov- tors after disconnection from the
existing successful area to do train- ernment policy can be a catalyst national grid, were damaged by fire.
ing,” Mr Hande explains. “Bankers in stimulating the sector, business In the last month, Nigeria’s Rural
listen to other bankers.” buy-in is essential to innovation and Electrification Agency (REA)
The Indian government has rec- scalability. “In general, the industry

14.7%
ognised the microgrid market can is driven by people who want to do
spur socio-economic development good, but there is the business side of
in rural areas where the national grid ensuring it is sustainable,” he points
has not extended. Its draft national out. “In the past, we have been stuck
policy promoting decentralised in an aid-based model, but now it is
energy aims to establish at least about getting a sustainable return.”
of people function without
10,000 renewable-based micro and In Nepal, challenges of geography
electricity, equal to 1.06
minigrid projects across the country. and isolated communities, com-
billion worldwide
Those ambitions are echoed pounded by an energy crisis caused
at entrepreneur level by Oorja by floods and drought, have left a United Nations
14 FUTURE OF ENERGY RACONTEUR.NET 15

DECENTRALISED ENERGY

Switching on the billion left without electricity


Power supply

MeshPower

Oorja Development Solutions


through clean micro
and minigrids
is empowering
disadvantaged 01
MeshPower’s solar-
people in remote powered minigrids
provide electricity

areas of the world to communities


without access,
enabling children
in the village of
Rondpoint in the
Eastern Province
of Rwanda to study
at night
MAGDA IBRAHIM

A
02
round 1.1 billion people glob- Oorja Development
Solutions launched
ally have no access to elec-
its first minigrid in
tricity, with 95 per cent in the north Indian
rural locations in sub-Saha- state of Uttar
ran Africa and developing countries Pradesh last summer,
powering up to 100
in Asia. However, the United Nations households and
has set an ambitious sustainable 01 02 providing irrigation
development goal to ensure univer- to farmers
sal access to affordable, reliable and
modern energy services by 2030. Development Solutions co-found- gap. While hydropower has typically launched a project to switch four
And there’s a decentralised solu- ers Clementine Chambon and Amit been the energy source of choice, major markets and economic cen-
tion that could play a significant role Saraogi, who launched their first notably for the national grid, solar tres on to solar-powered mini- Case study customer to enter using
in promoting greater democracy of minigrid in the northern state of microgrids are an exciting prospect, grids. The first phase of 500 shops Solar home systems a remote.
power supply and bringing people Uttar Pradesh last summer. says Gham Power general manager in Sabon Gari market was unveiled Once a customer has paid
out of poverty. Mini grids, or smaller Powering up to 100 households Anjal Niraula. on February 7 and REA managing A standalone solar home system off the full loan over 24 to 30
capacity microgrids, are among a and providing irrigation to farmers Energy cuts of up to 18 hours a day director Damilola Ogunbiyi says (SHS) can be the first rung on months, the system unlocks
burgeoning supply of off-grid elec- in Sarvantara village, Ms Chambon meant urban businesses incurred once completed it will be the “larg- the ladder of energy access for permanently.
trification solutions, alongside stan- says the socio-economic impact is high costs of using back-up die- est virtual power plant in Africa”. many people in remote areas of “The majority of customers
dalone home systems. evident, with solar-powered light- sel generators, he says, creating a “Our aim is to have 30 per cent of developing countries. are self-employed with irregular
Global microgrid capacity is ing displacing kerosene lamps and microgrid opportunity. “We realised power supply from renewables by Fenix International is among income and could not afford
expected to grow from 1.4 gigawatts businesses able to earn around 50 we could do the same in rural areas 2030, of which minigrids will play a renewable energy companies this kit without financing,”
(GW) in 2015 to 7.6GW in 2024, accord- per cent more from increased effi- where extension of the transmission significant role,” she adds. in this market and its ReadyPay explains Lyndsay Handler, chief
ing to Navigant Research, while decen- ciency. “There is a realisation that line is not feasible or very expen- Mobile payments and smart Power product provides executive of Fenix International.
tralised renewables are the source of 6 decentralised energy is part of the sive,” says Mr Niraula. meters are among technologies lighting, phone-charging, and Founded in 2009, and
per cent of new electricity access, the solution, but the challenge is how Gham Power is focusing on cre- improving scalability as microgrid power for TVs and radios on a headquartered in Uganda,
International Energy Agency reports. to implement that at ground level,” ating multiple clusters of three or developers look to Africa. lease-to-own basis financed Fenix has already sold 180,000
“Microgrids democratise electric- she adds. four microgrids; its Khotang cluster, In Rwanda, MeshPower director through micro-instalments over of its ReadyPay Power units
ity delivery,” says Harish Hande, north east of Kathmandu, reaches Lukas Lukoschek employs 25 local mobile money. and plans to reach 1.5 million
chief executive at the India-based 102 households and 87 businesses. It women entrepreneurs as mobile An entry level SHS costs $160 people by 2020.
not-for-profit SELCO Foundation, has proved most successful for pro- money vendors working across 70 (£114) and includes a 10-watt Fenix uses the financing element
which has been replicating success- ductive uses, with local entrepre- villages, selling top-up cards to add solar panel, 22-watt-hour to build a credit score for each
ful models of decentralised energy
since launching in 2010 and reached
No one yet has neurs increasing revenue, leading to
wider economic benefits.
pay-as-you-go energy. “Our mantra
is that it must be a cookie-cutter sys-
battery, two LED lights and a
phone-charging cable.
customer that can be used to
finance other products and
more than half a million end-users to stumbled across the “Microgrids are misunderstood tem for us to scale it up,” he says. Customers pay a $14 (£10) services, such as additional solar
date. “A shift from waiting for energy because there can be a focus on Meanwhile, after a minigrid pilot deposit and take home their panels, lights or even cooking
to flow, to active generation and con-
jackpot to roll it out comparing cost on a kilowatt/hour in Tanzania in 2016, multinational self-install system for seven stoves as well as school fees.
sumption of energy is important. A basis and asking why the poorest utility ENGIE replicated the model days of free power before the “Our mission is not only
microgrid will not remove poverty, are being supplied with expensive in three more locations and has unit locks. to empower our customers
but is a powerful tool.” energy,” says Mr Niraula. “But they another four in construction. It now When the customer makes a with life-changing energy
Collaboration of financial insti- The pair plan to develop 250 min- are displacing dirty energy and has ambitions to develop thousands payment through their mobile, technology, but also to open
tutions, innovative technology and igrids over the next five years, increasing revenue for local people, more minigrids and branch into up Fenix’s database generates an up inclusive financial services,”
communities is critical for scalabil- although Mr Saraogi concedes that and no one has yet quantified that.” to five new countries this year. unlock code sent by SMS for the says Ms Handler.
ity, he says, ultimately impacting on “navigating the policy environment The economic need for reliable While the opportunities are clear,
matthew.hirst@utilir- markers such as health, education can be a challenge”. energy was brought into sharp focus the pathway to full global scalability
oup.com and gender equality. “There is a per- For Dr Philip Sandwell, researcher in Nigeria in 2016, when thousands is less well lit, warns Chris Tattersall,
ception the poor will not pay, so are at the Grantham Institute – Climate of shops in Kano State’s Sabon Gari who leads the energy and resources
high risk, but when we go to a new Change and the Environment at market, powered by diesel genera- sector at Deloitte in Switzerland.
location, we take bankers from an Imperial College London, while gov- tors after disconnection from the “In terms of scalability and suc-
existing successful area to do train- ernment policy can be a catalyst national grid, were damaged by fire. cess, there are four things that need
ing,” Mr Hande explains. “Bankers in stimulating the sector, business In the last month, Nigeria’s Rural to be worked on: continued cost
listen to other bankers.” buy-in is essential to innovation and Electrification Agency (REA) reduction of photovoltaic produc-
The Indian government has rec- scalability. “In general, the industry tion; cheaper storage; a cost-effec-

14.7%
ognised the microgrid market can is driven by people who want to do tive, low-voltage smart grid with
spur socio-economic development good, but there is the business side of demand response and real-time
in rural areas where the national grid ensuring it is sustainable,” he points management of electricity flows;
has not extended. Its draft national out. “In the past, we have been stuck and [who is] the orchestrator,” says
policy promoting decentralised in an aid-based model, but now it is Mr Tattersall. “Everyone in the
energy aims to establish at least about getting a sustainable return.” industry is thinking about what
of people function without
10,000 renewable-based micro and In Nepal, challenges of geography business models will make decen-
electricity, equal to 1.06
minigrid projects across the country. and isolated communities, com- tralised energy successful in the
billion worldwide
Those ambitions are echoed pounded by an energy crisis caused future. No one yet has stumbled
at entrepreneur level by Oorja by floods and drought, have left a United Nations across the jackpot to roll it out.”
Buildings are
responsible for
40 per cent of EU
energy consumption
and 36 per cent of
CO2 emissions

Energy efficiency could


cut both impacts by at
least 5 per cent.
On average, older properties consume five times
more energy. This ageing and evolving building stock
brings with it a multiplicity of design, specification and
installation challenges.

Addressing climate-resilience concerns by adopting


sustainable solutions and adapting our built environment
is actually not that difficult, in principle.

It is an opportunity waiting to be seized.

Find out more on page 4

Follow us @meuk_les Mitsubishi Electric


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