Energy Capital

Digitalization, building a business model for the future

New technologies like augmented reality and machine-learning will pave the way for cleaner and more resilient business models.

By Energy Capital

Digitalization technologies have become a central issue for the energy industry, as the energy transition demands decision-making and automate processes to speed up production without giving up safety and quality. This is particularly important in manufacture. During 2021 and after the market disruption due to improved energy efficiency, optimized energy management, and sustainable business models.

Indeed, digitalization technologies allow the automation of processes, data analytics, and the delivery of specific production goals. As a result, these technologies enable the transition to a cleaner business model and are key drivers for value and growth.

In previous issues, we have discussed the importance of the adoption of digitalization technologies. In particular, we have discussed how they help measure and reduce carbon emissions, mainly by improving efficiency, DIGITAL TECHNOLOGIES coordinating the supply and demand of energy ARE UNLOCKING POTENTIAL from decentralized IN THE OIL AND GAS, POWER sources, and improving AND MANUFACTURING operational processes. BUSINESSES.

On this issue, we will focus on how these technologies are growing and strengthening a new business model, enabling a smoother energy transition while harnessing market opportunities.

Notably, digital technologies deliver trusted data from the assets; enable IT and OT connectivity to ensure flexible workflows; they also assist the Covid-19 pandemic, the manufacturing industry faced rapid and profound changes in production lines. For example, the automotive industry faced the switch from combustion to electric vehicles, which means disruptions in the production line. Such disruptions are practically impossible to manage without automated processes. Opportunities in manufacturing, oil and gas and power In this regard, Blake Moret, CEO of Rockwell Automation, during the 30th Automation Fair, talked about how the companies able to manage fast-paced changes by adding flexibility, resilience, and sustainability to their production lines will be better positioned for the future. These capabilities would be enabled by intelligent devices that gather data and leverage its flows to anticipate disruptions. As a result, automation has become essential for industrial activities. "You cannot make six billion vaccines manually and meet the demands of the market," Moret said. On the other hand, these capacities are also paramount for the energy sector, specifically for the oil and gas business, as unconventional hydrocarbons become more relevant for the industry. Consequently, safety, leak detection, emissions monitoring, carbon capture, utilization, and other values are critical to maintaining operations and essential pillars of the energy transition. Especially as it is now undisputed that hydrocarbons will still play a vital role in the energy mix of the future.

20

YEARS OR MORE TO SEE FULL POTENTIAL OF QUANTUM COMPUTING.

Dan Jeavons, Vice President for Digital Innovation and Computational Science at Shell, has said about the matter. "Digital technologies can make it possible to design and operate entirely new energy systems at the device, plant and regional scales." "Digital technologies can provide the tools and mechanisms for optimizing the energy efficiency of operations and enabling the sharing economy; they can enable more accurate greenhouse gas emissions tracking and transparent reporting across supply chains and can also enable more effective monitoring of carbon offsets."

Sensors, AI, AG and Digital Twin as value and growth enablers In this regard, three technologies have become paramount in this digitalization era: sensors, augmented reality, and artificial intelligence. Firstly, sensor technologies enable the generation and analysis of vast data processed in real-time using cloud capabilities. This data can be accessed through a device to better understand the assets' performance.

Moreover, augmented and virtual reality development allows the visual representation of such data, puts it in context and creates a digital twin of the physical asset. This digital twin simulates new production scenarios, optimizes processes, and predicts anomalies. Then, through artificial intelligence, an operator can interrogate this data, compare disparate sources of information and implement changes in a fastpaced manner.

These capabilities are critical for energy industries, oil and gas, as we have discussed, and power utilities, midstream, and downstream companies. Dan Jeavons shares a success story of Shell on the company's liquified natural gas (LNG) facilities. "We have shown that optimization technologies can

130

KILOTONS PER YEAR OF CO2 AVOIDANCE USING DIGITALIZATION TECHNOLOGIES AT SHELL’S LNG PLANT

reduce the CO2 emissions of one of our LNG facilities by as much as 130 kilotons per year – the equivalent of taking 28,000 US cars off the road1 for a year."

In the downstream sector, these technologies also enable research on how to pair data-driven simulation combined with physics-based models to optimize the efficiency of low-carbon

Credit: IBM

fuels. "We used this approach to demonstrate that sustainable aviation fuel concepts would work at scale. In 2020 we produced 500 liters of synthetic kerosene from carbon dioxide, water, and renewable energy to replace conventional hydrocarbon feedstock," added Jeavons.

Furthermore, digital and AI technologies will also be paramount for the future of mobility. Firstly, these technologies will help develop smart metering, devices that record information on electric energy consumption to be shared with suppliers, inform about demand, and as a basis for billing and electricity transactions.

This would provide a solid platform for developing smart energy storage and autonomous charging and discharging of batteries linked to renewable sources. The development of a smart charging algorithm will help maintain a stable and balanced power grid by spreading charging demand and enabling customers to charge at a lower cost when energy demand is lower.

All of these would be impossible without adopting AI and digital technologies. In fact, companies like Shell

DIGITAL TECHNOLOGIES CAN MAKE IT POSSIBLE TO DESIGN AND OPERATE ENTIRELY NEW ENERGY SYSTEMS.

DAN JEAVONS, VICE PRESIDENT FOR DIGITAL INNOVATION AND COMPUTATIONAL SCIENCE AT SHELL. and Enel are already deploying these solutions for customers in North America. However, to achieve wide adoption of these capabilities, a change of mindset and culture is needed. Jeavons considers that "too often in the energy industry, proprietary systems are the norm and data sharing is rare; this reduces the opportunities for smaller startups to participate in the ecosystem and also limits the ability of partners to collaborate easily across organizational boundaries," he concludes.

Quantum computing, a new frontier for super-optimized energy systems On the other hand, there is another technology being developed that will truly disrupt the energy future: quantum computing. Classical computing systems rely on semiconductor technologies like silicon chips that use "bits" as a basic unit of information. In contrast, processors in quantum computers use quantum systems—atoms, ions, photons, or electrons—and their properties to represent bits.

The particulars of quantum computing are vast and go way beyond the limits of this paper; however, quantum computers are expected to aid in chemistry and materials development far beyond the capacity of present-day supercomputers. They are expected to boost simulation capabilities to create batteries with greater storage capacity; and high-temperature superconductors, which could be used for new catalysts that could convert and optimize alternative fuel sources.

Moreover, quantum computing will also help in climate modeling to find potential locations of wind flow that would help in designing new wind-energy sources, for instance. Nevertheless, a greater and more immediate impact of this technology might be seen in today's smart grids. Currently, power utilities are struggling with optimizing

hybrid systems, those that combine multiple renewable energy sources.

Consequently, quantum computers promise to track demand, predict peaks in consumption, coordinate energy storage, and boost efficiency, all in real-time. This would dramatically pave the way for cheaper, more reliable power.

Projects regarding quantum tech Currently, there are several projects regarding quantum computing, one of them under the leadership of the US Department of Energy: the National Quantum Initiative, that is launching a series of multidisciplinary research programs on the matter. These programs include efforts to develop quantum computers as testbeds, to design new algorithms for quantum computing, and to use quantum computing to model fundamental physics, chemistry, and materials phenomena.

Another one is the Microsoft Quantum program, which aims to scale up the development of quantum hardware and software. One of the tools launched by Microsoft is the Azure Quantum, an open ecosystem platform that allows users to borrow quantum principles and run them on classical resources for the design and launching of quantum algorithms.

Moreover, Honeywell is another company entering the quantum realm. Honeywell Quantum Solutions offers access to its trapped-ion quantum systems, which leverage mid-circuit measurement and qubit reuse, allowing developers to write algorithms in impactful ways.

Overall, this technology promises to disrupt the energy industry panorama from top to bottom and completely revolutionize cryptography, machine learning, chemistry, communication, and other fields. It will have a significant impact on discovering new clean energy sources, the creation of cleaner fuels, lowering emissions, and creating super-optimized power systems.

Finally, all of these advantages will be tangible in the foreseeable future, but more research is needed. For now, the expectation is for quantum technology to allow a faster, easier, and cleaner delivery of electricity. However, the true potential of this technology might not be accessible for the next 20 years. For now, the existing digital technologies that we have discussed must grow their adoption to unlock their full potential and pave the way for the energy transition.