The energy transition involves a deliberate shift from traditional, fossil fuel-based energy systems to more sustainable, low-carbon alternatives. This transition is essential for addressing climate change, reducing greenhouse gas emissions and promoting resilient energy practices. The enactment of the Infrastructure Investment and Jobs Act (IIJA) has heightened discussions around this topic, highlighting its economic, political and philosophical implications.
Utilities are pivotal in this transition, adopting carbon-neutral strategies and implementing processes to enhance reliability, resilience and safety. This includes focusing on renewable energy, energy efficiency, electrification, decarbonization, energy storage and smart grids. At the center of it all, analytics and data science play a crucial role by optimizing energy systems, improving operational efficiencies and facilitating the integration of renewable sources.
Major components of the energy transition
- Renewable energy: This includes solar, wind, hydro, geothermal and biomass energy sources. These are favored for their low environmental impact and ability to reduce reliance on fossil fuels.
- Energy efficiency: Improving the efficiency of energy use in homes, buildings, transportation and industries to reduce overall energy consumption.
- Decarbonization: This involves reducing carbon emissions from all sectors of the economy, including energy production, transportation, industry and agriculture.
- Electrification: Shifting from fossil fuel-based systems to electric systems, particularly when the electricity comes from renewable sources. This includes electrifying transportation (e.g., electric vehicles) and heating.
- Energy Storage and Grid Modernization: Developing advanced energy storage solutions (like batteries) and modernizing the energy grid to accommodate variable renewable energy sources and enhance reliability.
A successful energy transition will require a multi-faceted approach by utilities and all other players in and around the energy industry, working together to implement new solutions. The old model of the utility providing one way generation, transmission and distribution will no longer work.
New solutions—including new renewable energy provided by utilities, consumers and large third-party generators—are needed to grow energy storage solutions such as batteries and decarbonizing energy production.
Consumers have also shown a growing interest in optimizing the way they use energy, looking for ways to implement energy efficiency solutions to reduce their energy consumption by electrifying operations such as fleets, electric cars and heating. Many large industries are optimizing the way that they use energy such as agriculture, manufacturing, data and software.
These new solutions will require a modernized grid to accommodate the two-way flow of electricity and accommodating variable renewable energy sources, while maintaining or enhancing reliability. Let’s dive deeper into each of these components of the energy transition.
Renewable energy sources like wind, solar, hydroelectric power and other sources that produce little to no greenhouse gas emissions are essential to helping utilities reduce their carbon footprint and achieve federal, state and local climate mandates. But renewables can cause challenges. Intermittency can lead to reliability issues, making it difficult for utilities to balance supply and demand. What’s more, integrating these new resources can be costly and difficult, requiring grid upgrades and new processes.
Analytics will be crucial in helping operators, engineers and maintenance recreate a picture of the physical flow of power through the grid to help determine when and how renewables will impact the reliability of the grid for both the positive and the negative.
Energy storage, such as batteries, can help the integration of renewable energy sources by bridging the gap of production of intermittent renewable energy to consumption patterns. But the upfront cost for these technologies can be high and require changes to processes, workforce and technology to fully capitalize on the benefits. Again, analytics will be one of the keys to unlocking the impact of battery storage on the resiliency and reliability of grid operations. This is especially important as more than one-third of all proposed utility/commercial grade solar projects are designed as hybrid solar plus battery storage, according to a Lawrence Berkely National Laboratory study.
Decarbonizing the energy produced by reducing carbon emissions of non-renewable sources and optimizing the transportation of this energy is another crucial component of the energy transition. But there are several technological, supply chain and potential reliability questions that can cause challenges. Added to this is the political pressure to speed up decarbonization, which makes analytics an even more important play.
It’s necessary to approach decarbonization from a data standpoint and be armed with facts vs. policy in a rush to judgement on carbon. There needs to be some caution as to how fast we move with this aspect because we’ve seen the challenges in Europe with moving quickly to replace coal and gas-fired generation. In the past, politicization has led to giving nuclear generation a bad name when well-planned and controlled nuclear energy is safe, cleaner than fossil fuels, can be deployed on a large scale and can replace combustion of fossil fuels for electricity generation.
Energy efficiency for commercial buildings and electrification of transportation, heating and cooking can put the power of the energy transition in the hands of the ultimate consumer. Providing education and incentives will be crucial for consumers to adopt these new technologies and balancing new and changing loads due to these new technologies could pose challenges for utilities.
Utilizing analytics can help the utilities understand the propensity for adoption of energy efficiency programs, solar and electric vehicles. Since the infrastructure to handle electrification of vehicles largely needs to be built out, it’s important to know where the grid can handle that increased demand and provide a roadmap and plan to build it safely, reliably and cost effectively.
Finally, these components of the energy transition will require a modern grid, that can enable two-way power flow, integration of new technologies and adapting to changing load curves. Utilities must embark on additional grid modernization efforts, including newer advanced metering infrastructure and new solutions to interpret the valuable data, enhanced grid infrastructure and better management of grid resources, advanced solutions such as microgrids and sophisticated energy management systems.
Incorporating these key components of the energy transition is crucial for the future of sustainable energy, reaching climate goals and global warming. Addressing the challenges presented by each solution will require coordinated efforts from utilities, policymakers and technology providers. Analytics will be key to successful implementation of new solutions in the energy transition.
Continue to follow along with the article series by authors Glen Sartain and Amanda Mastrosimone as they delve deeper into analytics role in the energy transition.