In today’s digital age, we are afforded the ability to have news and information around the clock. Important subjects such as COVID-19, extreme weather conditions and energy-related stories like fluctuations in demand, investments in renewables, reductions in carbon footprints and gaps between power generation and demand give us insight into how the world is managing through new, and at times, difficult circumstances. Let’s shine a light on how these topics impact power generation and how digital transformation can be the key to optimizing your operations.
Without a doubt, 2020 was a year for the history books. The COVID-19 pandemic had an unprecedented impact on our everyday lives as countries locked down, travel halted and schools and businesses closed. The world took note of interesting environmental changes with reduced pollution and decreased seismic vibrations as the population shuttered indoors for safety. As for the energy sector, contingency plans that would typically provide operational effectiveness following events like natural disasters, cyber incidents and power outages were no match for a pandemic with quarantines and extended lockdowns, providing new disruptions to plan for as part of the future reliability playbooks.
The global energy markets declined with primary energy and carbon emissions falling at their fastest rates since World War II. The International Energy Agency (IEA) reported that electricity demand fell up to 20% each month that a nation’s lockdown persisted. Demand in China, the first nation to implement a lockdown, fell by 6.5% in the first quarter of 2020. France, India, Italy, Spain, the United Kingdom and the northwestern region of the United States all saw consumption fall by at least 15% during lockdowns. In Italy, at the height of its outbreak, electricity demand was down by as much as 75% at times. Although, US domestic demand soared up to 40% as people worked from home, the increase came nowhere near offsetting the effects of closed businesses, especially in the service sector. The stricter the lockdown, the greater the impact.
The quarantines and extended lockdowns highlighted the need for greater levels of digitalization within the power industry. The sector, that already runs lean on human resources, was suddenly forced to perform with even less. Plant management, maintenance and reliability engineering and capital engineering roles were suddenly asked to limit their time spent in the plant. These roles need to have access to P&IDs, IO card layouts, technical specifications and process information that generally isn’t available outside of the plant. Companies that made the investment in digital transformation were better positioned to be resilient against this disruption.
One potential silver lining from the lockdowns for electricity generation came in the form of the rise of low-carbon energy, according to the IEA. Having surpassed coal last year, renewable sources accounted for 45% of power generation in 2020 over 2019. Many companies like Chevron, Exelon, Calpine, Shell and even Hexagon are increasingly diversifying their portfolio mix with investments into wind, solar, nuclear, hydrogen and other clean forms of energy to deliver a more sustainable future state. Moreover, the rise in intermittent renewables such as wind and solar will make it more important for other forms of generation to be reliable and resilient as global energy demand accelerates and the global economy emerges from the pandemic.
As we turned the corner into 2021, we not only faced threats of COVID-19 variants, but extreme weather events made headlines as well. For example, the typically mild winter in Texas took a sharp nose dive into record-setting arctic temperatures for several days, pummeling the state’s power grid with a catastrophic winter storm, leaving millions without electricity or potable water.
A Vox article on the Texas travesty summarized the “perfect storm” scenario stating, “the coldest temperatures in 30 years triggered a sudden spike in wintertime energy demand, while the chilly weather led to coal piles freezing, a nuclear reactor tripping offline, and wind turbines icing up. Most importantly, the state’s largest source of electricity, natural gas, suffered shortfalls as wellheads froze, icy condensation blocked pipelines, and compressor stations shut down. Much of the remaining gas was prioritized for heating rather than electricity. In total, about 34,000 megawatts of power generation were offline -— more than 40 percent of peak winter demand.”
From ice and snow reaching south Texas to high-pressure heat domes across the northern hemisphere, fast forward to the summer of 2021 with the Washington Post reporting on intense weather on the opposite side of the spectrum with record temperatures impacting approximately 87-90% of the earth’s population or roughly 7 billion people.
In fact, the National Oceanic and Atmospheric Administration (NOAA) National Centers for Environmental Information (NCEI) released the global climate summary for August 2021, concluding that the average surface temperature for the planet was the sixth-warmest on record. Statistically, there is a greater than 99% chance that 2021 will rank highly among the ten warmest years in the 142-year record. In return, those higher temperatures increased the demand for electricity, taxing an already strained infrastructure.
More Power, Captain!
According to NBC News correspondent Josh Lederman in July 2021, Oregon, California, New Mexico and others grappled with significant heatwaves and diminished water resources over the summer, pushing the limits on electricity and water supply systems. He also noted that the same factors driving up demand for power also limit the ability to generate it, that raises significant questions about the nation’s readiness for a future in which extreme weather events could become even more common.
“This topic is on top of every utility’s agenda right now,” said Omar Al-Juburi, a digital power grid consultant at Ernst & Young. “We’re going to get to a point where the current infrastructure and the current way of operating is going to continue to be strained by these extreme heat waves (NBC News, 2021).”
Circumstances are similar across the globe. According to The Washington Post, air conditioner stock is estimated to double over the next twenty years, per the IEA. By 2050, around 2/3 of the world’s households could have an air conditioner. And with fans and air conditioners already consuming 10% of electricity globally, the IEA predicts that the associated energy needs could, in fact, triple over the next 30 years, becoming one of the top drivers of global electricity demand as the population is projected to reach 8.5 billion in 2030, 9.7 billion in 2050 and 11.2 billion by 2100, according to the United Nations.
Who Turned Out the Lights?
In 2020, 1.33 billion hours of power outages affected the United States, a 73% increase than in 2019. Although weather-related events and infrastructure failures are major factors that can wreak havoc on our energy system such as the situation in Texas this year, there are other issues that create power reliability problems for consumers as well. For example, human error was the underlying reason for a power outage that lasted for more than an hour affecting New York City subways and stranding hundreds of passengers last month. In that case, investigators determined that the loss of power triggered at the New York City Transit Rail Control Center “was the byproduct of a manually-activated power-off switch on one of the building’s power distribution units.” What made the situation worse were “internal organization and process flaws” coupled with the rail control center’s lack of a power distribution monitoring system, investigators concluded. The report also said, “Such a system would provide visibility of the status of key electrical components in the power distribution system.”
Another contributory cause of paltry power performance, like rolling blackouts and brownouts, is the gap between supply and demand due to the intermittent nature of renewables. In markets like Texas, traditional power facilities are “chasing the wind” to fill the voids between the intermittent supply and near continuous demand. Unplanned outages, where non-intermittent sources are unable to bridge the gap, lead to rolling blackouts and lost revenue.
And let’s not forget another problem in the reliability mix under the guise of cyberattacks and the role they can play in bringing a country’s power and energy resources to its knees. Some of the most recent events hitting headlines in 2021 that you may recall include the SolarWinds incident or the Colonial Pipeline attack, both devastating in their own regard. According to Deloitte, “Energy is one of the top three sectors targeted for attack in the United States. In 2016 alone, the sector reported 59 incidents, 20 percent of the 290 total incidents reported in that year.”
Optimizing Operations with Digital Transformation
Digital transformation is a top strategic priority for businesses in the energy and power sector looking to better manage new project ventures, remain competitive, lower operational risk, reduce downtime, increase worker productivity and facilitate compliance with important regulatory requirements.
Yet, in today’s digital age where technology is embraced at an exponential rate, personnel at many power generation facilities are still using hard-copy documents, siloed spreadsheets, scattered databases and other inadequate data collection and management tools for crucial day-to-day procedures such as shift handover, plant performance reviews and reliability engineering. This can lead to miscommunication, mistakes, unplanned outages, inefficiencies and major safety risks — all of which can be avoided.
If you are an owner operator responsible for managing one or more of the tens of thousands of power plants on the planet, thinking about how resilient your plant operations are in order to generate power reliably, safely, economically and as ecologically-friendly as possible, can keep you up at night. Strategic plans that include optimizing through digital transformation can work to help satisfy not only a rise in energy demand, but an increase in reliable, resilient and robust operations to ensure safe, economical and compliant power generation.
As we all learn to navigate these winds of change, I invite you to check out Hexagon’s latest content on the power of digital transformation in operations and maintenance. Whether you need to digitalize safety-critical human operations processes and procedures, optimize alarm management, protect your investment with state-of-the-art cybersecurity or build a comprehensive digital twin, we are here to support your digital transformation journey and to help you prepare for tomorrow, today. And, if you would like to better understand where your organization’s digital maturity stands, our Operations Management Gap Analysis Survey is a valuable tool to help you get started.