Transition from centralised to decentralised generation

Prof Dr Tadhg O’Donovan, Head of the School of Engineering and Physical Sciences, Heriot-Watt University Dubai.

Technological innovation is vital for ramping up the process of a successful global energy transition, that is the shift from conventional generation, fossil-based, where incumbent power companies distribute their energy from large power plants to the end-user, to decentralised generation where energy consumers manage their own energy portfolio on-site via distributed energy resources. The potential for new business models, energy storage and trading, coupled with a shift to electric vehicles can have a significant impact on the energy system.

Supporting technologies such as predictive artificial intelligence, machine learning, IoT, and blockchain can play an instrumental role in analysing demand and adjusting how much power is drawn from where across the distributed grid. Such types of applications are yet to be fully deployed in the power industry.

To effectively orchestrate the different elements of new power ecosystems, it is essential for digitalisation to shift from the recommended phase to the mandatory phase, where digital technologies become mature, fully integrated and business-critical. Examples include virtual power plants, home energy management, cloud computing solutions, and digital twins which create a simulated replica of a power plant or grid.

As energy undergoes a huge transformation, in tandem with technologies such as artificial intelligence and IoT, it will re-design the way we live over the next few decades. At one end, this transformation is being driven by a rapidly growing population, prompting the urgency for sustainability, at the other end, the ongoing development of technologies required for sourcing and storing energy from renewables is also gathering steam.

As the world needs to scale up renewable energy at least six times faster in order to meet the Paris Agreement goals, several national governments have already begun to incentivise its adoption. However, current plans and policies are not nearly ambitious enough to meet the 1.5°C goal by 2050. Fulfilling the innovations needed for energy transition will require a grand coalition between nations, regulators, policymakers and the private sector.

There is no doubt that the energy sector has been deeply impacted by the massive decline in consumption due to the pandemic’s negative impact on economic activity across the globe. And at the same time, the increasing demand for cleaner and greener sources of energy, as opposed to conventional sources, means that the energy sector now needs to balance demand and supply in a more optimised manner to grow at the rate needed to mitigate climate change.

This also means that existing energy sources are in need of modifications that can help eliminate or lessen their environmental impact for which more investment will be required. However, the International Energy Agency expects global energy investment could fall by $400B; this is a worrying sign as it can slow down, for instance, the proliferation of key clean energy technologies that is ultimately imperative as a step towards addressing climate change.

Prof Dr Tadhg O’Donovan, Head of the School of Engineering and Physical Sciences, Heriot-Watt University Dubai.
Prof Dr Tadhg O’Donovan, Head of the School of Engineering and Physical Sciences, Heriot-Watt University Dubai.

Key takeaways

  • Supporting technologies can play an instrumental role in analysing demand and adjusting how much power is drawn.
  • It is essential for digitalisation to shift from the recommended phase to the mandatory phase, where digital technologies become mature.
  • Examples include virtual power plants, home energy management, cloud computing solutions, digital twins.
  • As energy undergoes a huge transformation, in tandem with technologies, it will re-design the way we live over the next few decades.
  • At one end, transformation is being driven by a rapidly growing population, prompting the urgency for sustainability.
  • At the other end, ongoing development of technologies required for sourcing and storing energy from renewables is also gathering steam.
  • There is no doubt that energy has been impacted by massive decline in consumption due to pandemic’s negative impact on economic activity.