Major Trends in Energy 17 July 2018.pptx

Trends in Energy

1. Major Trends in Energy 1 DNV GL Energy

2. Global reach – local competence 2 150+ years 100+ countries 100,000+ customers 12,500 employees

3. Industry consolidation 3

4. Independent, autonomous and industry-focused organization 4 Det Norske Veritas Foundation Technology and Research DNV GL Group Headquarter: Oslo, Norway Global Shared Services MARITIME DIGITAL SOLUTIONS BUSINESS ASSURANCE ENERGY OIL & GAS Headquartered in Hamburg, Germany Headquartered in Høvik, Norway Headquartered in London, UK Headquartered in Arnhem, Netherlands Headquartered in Høvik, Norway

5. An energy technology power house 5 Largest independent technical advisor on renewable energy and 2,300 energy experts >25 standards and guidelines published as a leading certification body No 1 in high power and high voltage testing with 10 laboratories incl. our leading lab in Arnhem 90 years experience in the power industry, including 30 years in energy efficiency and wind energy

6. Disruption in every Industry: is it real? How will you capitalize on digital disruption? How will these changes affect your business in the future? Will you act or be left behind? 6

7. Disruption: Nokia was not alone. 7 We didn’t do anything wrong but we somehow lost!

8. 8 Tech Leaders Who Missed Their Next Wave Burroughs – Sperry Univac – Honeywell – Control Data MSA – McCormack & Dodge – Cullinet – Cincom – ADR DEC – Data General – Wang – Prime – Tandem Daisy – Calma – Valid – Apollo – Silicon Graphics – Sun Atari – Osborne – Commodore – Casio – Palm – Sega WordPerfect – Lotus – Ashton Tate – Borland Informix – Ingres – Sybase – BEA – Siebel – PeopleSoft Nortel – Lucent – 3Com – Banyan – Novell Quest – America West – Pacific Bell – Nynex – Bell South Netscape – MySpace – Inktomi – Ask Jeeves – Yahoo! Kodak – Blackberry – Motorola – Nokia – Sony All 56 crushed it the first time Why was it so hard the second time? Video: Power Matching City- Smart Energy Systems

9. Disruptive Technologies get adopted over decades Systems of Record Systems of Engagement Systems of Intelligence Systems of Autonomy Mobile apps, focus on end user, customer is king (2000 – 2020) ERP, focus on supply chain, product is king (1990 – 2010) Algorithms, focus on signals, data is king (2010 – 2030) Vehicles, focus on objects, AI is king (2020 – 2040)

10. New York City's Fifth Avenue, 1900; Where is the Car 10

11. New York City's Fifth Avenue, 1913; where is the Horse? Transformation in 13 yrs 11

12. Technologies – expected installations vs maturity 12

13. 13 Three major trends in Energy Decarbonization Decentralization Digitalization

14. 14 Trend 1 Decarbonization

15. Growth of renewables share in world energy mix 15

16. Supergrid 16 The energy landscape is changing. Demand for electricity is growing rapidly around the world – particularly in the Middle East and Asia which are fast becoming powerhouses of the energy sector. In response, many countries are investing heavily in their transmission and distribution (T&D) infrastructure to increase capacity and/or establish long distance connections to ensure a reliable supply. Several countries have already begun developing long-distance EHV networks – or supergrids . Meanwhile Southeast Asia is expected to invest over $1 trillion in its power sector by 2035.

17. 17 Trend 2 Decentralization

18. Microgrid: what’s in store in 2020? 18 Cost savings and operational value potential for commercial entities (in % of status quo electricity cost); source: EY

19. Solar+Wind+Energy Storage Hybrid Energy Trilemma 19 SUSTAINABLE RELIABLE AFFORDABLE Optimisation due to combination of 3 systems Compliments in terms of resource utilisation

20. Biggest disruption in offing in Energy & Transportation: Ref. Tony Seba The industrial age of energy and transportation will be over by 2030. Exponentially improving technologies such as solar, electric vehicles, and autonomous (self-driving) cars will disrupt and sweep away the energy and transportation industries as we know it. Clean Disruption projections (based on technology cost curves, business model innovation as well as product innovation) show that by 2030: – All new mass-market vehicles will be electric. – All of these vehicles will be autonomous (self-driving) or semi-autonomous. – The car market will shrink by 80%. – Gasoline will be obsolete. Nuclear is already obsolete. Natural Gas and Coal will be obsolete. – Up to 80% of highways will not be needed. – Up to 80% of parking spaces will not be needed. – The concept of individual car ownership will be obsolete. – All new energy will be largely provided by solar or wind. 20

21. 21 Trend 3 Digitalization How to survive digital disruption? By embracing change!

22. Basic Definitions Digitization: The conversion of text, pictures, or sound into a digital form that can be processed by a computer. Digitalization: Integration of digital technologies into everyday life by the digitization of everything that can be digitized. Machine learning: Machine learning is an application of artificial intelligence (AI) that provides systems the ability to automatically learn and improve from experience without being explicitly programmed.  Big Data Analytics: Process of collecting, organizing and analyzing   large  sets of  data Artificial Intelligence: The theory and development of computer systems able to perform tasks normally requiring human intelligence, such as visual perception, speech recognition, decision-making, and translation between languages. 22

23. 23 Market potential for Digital / Data analytics services Digitalizing the power sector in 2025 will generate $64 billion in revenue for the energy value chain. It will deliver utilities a potential of 23% on EBIT (profit margin)!

24. Adoption of digital technologies in the Energy industry is growing. 40-50% of utilities are currently using or testing data analytics tools and use cases However, only 20% has data analytics embedded in their operational processes 90% of utilities are expected to be using data driven business insights by 2020. 70% of utilities are more positive toward safeness and security of storing data in the cloud Utilities estimate a saving of 16% or more in operating expenses (OPEX) through digitalization Digitalisation can reduce up to 15 % of power losses in Transmission and Distribution Remote monitoring and allowing equipment to be operated more efficiently and closer to its optimal conditions. Reduction of congestion and optimization of power flows optimized. Reduction of theft of energy through introduction of smart meters Demand response/peak shaving 24 Digital Transformation in Energy: some figures

25. In the next decade, the Smartgrid will transform into a ‘ Softgrid ’ Where Smartgrid is mostly about adding digital hardware (controllers, meters, sensors) in the grid, Softgrid add layers of software and applications. It brings scalable software platforms and cloud services to the grid and adds emerging technologies like data analytics, AI, mobile and blockchain. The softgrid will drive digital transformation to the power industry, enabling added value, differentiated services and growth. Aspects of the Softgrid : Digital transformation Data driven operation Situational awareness and decision support Predictive asset maintenance Energy data analytics Transactive energy systems (blockchain based) 25

26. Data driven predictive maintenance strategies in Asset Management 26 5 10 15 Condition Time Normal 5 year maintenance interval 20 % reduction in cost is possible Predictive analytics in asset management may tell when a next problem is likely to occur given the operating mode. Plan maintenance according to prediction

27. Material & Process Innovation Superconductor 3D printing Innovation in de-commissioning, re-cycling and disposal Transmission lines: HVDC lines, IoT Power Transmission Systems Solar Panels Offshore wind and Floating solar 27

28. HVDC Transmission Systems  Economically-viable solution for bulk and long-distance power transmission. With increasing integration of renewable energy sources, and growing need to enhance the security of supply, HVDC grid technology is expected to evolve in the region  Increasing investments in offshore wind industry, solar photovoltaic, grid expansion, and energy storage projects, as well as the implementation of smart energy infrastructure will be necessary for the country to balance the fluctuating supply of renewable sources, thereby, increasing the scope for HVDC transmission systems. 28

29. Innovation in Solar Solar Skin Design Solar powered roads Wearable solar Solar batteries: innovation in solar storage Solar tracking mounts 29

30. Advances in solar panel efficiency 30

31. Offshore wind and floating solar Offshore Wind global offshore wind energy market was valued at USD 20.3 billion in 2016 and is expected to reach USD 57.2 billion in 2022, growing at a CAGR of 16.2% between 2017 and 2022.    Carnegie Institution for Science in Stanford, California suggests that one big wind farm floating in the North Atlantic could capture enough energy to power the entire world. Video: DNV GL - Offshore Wind Floating solar: R educe evaporation in dry climates by as much as 90% Enhanced efficiency (almost by 10% increase) Scarcity of land Global Floating Solar Panels Market is estimated to reach $1,186 million by 2024; growing at a CAGR of 65% from 2016 to 2024.  31

32. How to be ready for the CHANGE 10m, 100m and 10,000m view At individual level: Malleable Inertia At Team/Department Level: Several small & cheap experiments At Organisation level: Culture of change Best time to be prepared for change is the ‘best time’ 32

33. 33 DNV GL can help in unlock the power of Digital Transformation in Energy https://www.dnvgl.com/energy/themes/digitalization Alok Kumar & Ketan Chheda [email protected] , [email protected]