Three ways that “efficiency” defines the future of energy

At last month’s Global Conference on Energy Efficiency, hosted by the IEA in Dublin, we focused on the topic of energy efficiency. IEA Executive Director Dr. Fatih Birol and other leaders in international politics and industry shared their thoughts and recommendations on a broad set of topics ranging from policy recommendations to practical solutions for improving the world’s energy systems. I have noticed that in the discussions around decarbonization, the energy community is largely focused on renewables, and rightly so. But at this conference, we began to widen the focus onto what else needs to be done to meet the various climate targets set by governments and find an efficient operating mode for the shifted energy reality.

Wasting fossil energy is inexcusable considering the pressure to reduce harmful emissions

After gathering momentum for nearly two decades, the pace in renewables capacity growth stalled in 2018, remaining at around 180 gigawatts, the same as in 2017. Prices for solar and wind energy are continuing to decline, and offshore turbines have reached the ten-megawatt level. But for the transition pace to further accelerate and the renewables ratio to further expand the energy system must start to fundamentally face its struggles with the integration. Absorbing renewables at the cost of wasting energy and fuel – like when coal plants or other inefficient means are forced to contribute balancing capacity – is inexcusable considering the growing pressure to reduce harmful emissions and slow global warming.

We must keep our focus on the goal: Make energy greener! That means decarbonization of the entire energy system from production to consumption. At the conference, Dr. Birol stated that, “No meaningful energy transition can take place without energy efficiency,” and I wholeheartedly agree with him. Energy efficiency indeed offers vast potential for decarbonization across the entire energy value chain. And these types of solutions are great for industry because the technologies are available today and they can help companies reduce OpEx while also reducing emissions.

As a member of the new IEA Commission for Urgent Action on Energy Efficiency, I will be working with government ministers, top business executives and thought leaders from around the world to explore how we can accelerate policies and action on energy efficiency. I will be highlighting the following three topics, among others:

Shifting from coal to natural gas is one of the most effective solutions to make energy greener

First, we must upgrade conventional power systems. We still have plenty to do to improve efficiency in fossil systems. One of the most effective solutions is to shift from coal and liquid hydrocarbon fuels to natural gas. This maintains and even improves reliability and flexibility while substantially reducing emissions. Combined cycle power plants can reach efficiencies of 63% and above compared to coal power plants which show an average efficiency of 37-40% in the currently installed fleet.

On the grid side, HVDC lines are ready to not only link supply and demand centers, but even weather zones. These long-distance, low-loss transmission lines benefit all types of power generation infrastructure, offering the ability to optimize generation and reduce the overall number of new plants that need to be constructed. The Nemo Link, connecting UK and Belgium grids across the North Sea, is one excellent example for this.

Second: We must master the growing complexities of the energy system to exploit more potential. Yes, the greater variety of distributed, fluctuating and proactive elements are a challenge to the energy system. But drawing upon increased transparency and new technology offers the prospects to balance and integrate the divergent renewable energy capacities and advance the energy transition. The electrification of the diverse energy-consuming sectors like housing, transport and industry is one core lever as it improves their efficiency and unlocks potential for using load capacities flexibly.

Hydrogen is enhancing the application of green energy throughout the entire system

But we need to increase sector coupling, or as we call it: Power-to-X (the interconnecting of the power sector with other sectors), even further. Converting surplus renewable power into hydrogen and synthetic fuels will be a key solution for achieving virtually zero-carbon electricity. The market is immature, yet it offers the means to utilize the growing amounts of fluctuating renewable energy at a large scale, making it storable, transportable and useable for all kinds of energy consuming sectors. Thus, hydrogen is enhancing the application of green energy throughout the entire system.

Siemens is preparing its gas turbine fleet for this future: our new gas turbines will operate with 20% renewable gases from 2020 on and 100% from 2030 on. They will have the potential to generate power and heat at zero carbo emissions by utilizing existing infrastructure and assets. 

And third: Digital solutions allow us to increase the efficiency of existing energy systems through the ability to gain data and insights from machines. Data plus AI-enabled controls are already enhancing operational efficiency in power generation: We can achieve 15% to 20% more NOX reduction, for example, through gas turbine control parameters being optimized by AI as compared to how they were set by experienced manual operators.

Digitalization will make energy systems more autonomous – and keep them competitive

Paired with machine and device connectivity, digitalization makes it possible to manage the complexity of the overall system while increasing efficiency and pre-empting failures. Digital solutions will ultimately enable autonomous power plant operation as they are already doing with remote control of oil and gas production operations, for example at the Ivar Aasen oil rig in Norway. Remote monitoring and controls are largely feasible today, and the next step will be to increase the comprehensive transparency and efficiency of plant operations with enhanced sensor, monitoring, analytics and self-learning systems.

In summary, we need to refocus our attention to the goal of decarbonization and making energy greener. The integration of renewables, of course, is and remains at the core of this task. But achieving a sustainable, reliable energy system – a true energy transition – just as much depends on exploiting all possible efficiency potential in the existing system, applying proven and new technologies to form a new base for generating, transmitting, converting, storing and applying energy.