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The Changing Energy Landscape

Sunil David examines the dynamic shifts occurring within the energy landscape, emphasizing the profound implications of advancements in renewable energy technologies. As innovations in solar, wind, energy storage, hydrogen, and smart grid technologies reshape the energy sector, the demand for traditional oil and gas is poised for significant change.

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Sunil David examines the changes that are unfolding on the energy landscape and their significance.

Photo by Carl Raw on Unsplash
Photo by Carl Raw on Unsplash

Advancements in renewable energy technologies are poised to significantly impact the demand for oil and gas in the coming decades. Against this backdrop, it would be of interest to have a closer look at the emerging landscape of renewable energy technologies.

Solar power

Efficiency Improvements: Solar photovoltaic (PV) technology has seen substantial improvements in efficiency, with commercial solar panels reaching efficiencies of over 22%. New materials like perovskites are being integrated into solar cells, potentially boosting efficiencies even further.

Cost Reductions: The cost of solar panels has continued to decline due to advancements in manufacturing techniques and economies of scale. Solar power is becoming one of the most cost-effective sources of electricity in many regions.

Wind power

Technological advancements in offshore wind turbines, such as floating platforms, are enabling the deployment of wind farms in deeper waters where wind speeds are higher and more consistent.

A number of advancements in turbine design are also increasing the efficiency of wind turbines. These include:

1. Larger and More Efficient Turbines – The trend towards larger wind turbines with higher capacities has been a game-changer for the wind energy sector. Modern turbines now feature blades exceeding 100 meters in length, enabling them to capture more wind and generate more power. These larger turbines are particularly beneficial in Latin America and parts of India , where vast open spaces and strong wind resources are prevalent.

2. Advanced Blade Materials – Innovations in blade materials, such as the use of carbon fiber composites, have made turbines lighter and more durable. These materials enhance the efficiency of turbines by allowing them to operate at higher capacities with less wear and tear. This is crucial for the longevity and reliability of wind farms in diverse environmental conditions. 

3. Aerodynamic Improvements – Aerodynamic advancements in blade design have significantly increased the energy capture efficiency of wind turbines. Features such as serrated trailing edges and vortex generators reduce aerodynamic losses and noise, making turbines more efficient and environmentally friendly. These improvements are particularly advantageous in regions with varying wind patterns, such as the coastal and mountainous areas of Latin America.

Energy storage

Lithium-ion (Li-ion) batteries have long been the industry standard for portable electronics, EVs and larger Battery Energy Storage Systems (BESS). It is no surprise as to why the industry has long preferred Li-ion for batteries since it is affordable, performs with high efficiency and has a deep discharge cycle life as well as power density, all of which combined make it ideal for commercial BESS. However, ongoing research continues to push the boundaries of Li-ion performance and sustainability. Advancements in high-capacity nickel-rich cathode materials for Li-ion batteries are boosting the capacity and longevity of battery storage systems.

Improvements in this area are of major importance to the industry – scientific advances can often bring the costs of BESS down, boosting penetration of the technology in the market, and any improvements in longevity have major sustainability benefits as new materials will be required less frequently.

Large-scale energy storage solutions, such as pumped hydro, compressed air, and grid-scale battery installations, are becoming more prevalent. These systems store excess renewable energy for use when generation is low.

Hydrogen

Image by Freepik
Image by Freepik

Green Hydrogen: Electrolysis technology, which produces hydrogen from water using renewable electricity, is advancing. Green hydrogen can be used in various sectors, including transportation, industry, and as a storage medium for renewable energy.

Fuel Cells: Improvements in fuel cell technology are making hydrogen a more viable option for heavy-duty transportation and industrial applications. Researchers from the University of Waterloo published a paper that suggests a future decrease in the cost of fuel cell vehicles (FCVs), which could potentially shift transportation systems towards using more of them. This recent technological breakthrough discovered a new fuel cell that has a lifespan ten times than that of current cells. Currently, FCVs are heavily subsidised by governments like Japan and China but, on average, cost around twice the amount of their gasoline or diesel counterparts.

Researchers from Princeton University have discovered affordable catalysts for hydrogen fuel cells. Traditional catalysts are normally precious metals, such as platinum, but the research paper suggests that materials a fraction of platinum’s price could also function. The researchers have found new materials that are ‘60 percent as effective as platinum-related materials but at about one-fifth the cost’. These reduced costs directly translate into reduced prices for customers. According to Reuters, fuel cell manufacturers such as Toyota primarily cut costs by limiting the platinum in fuel cells. By limiting each car to 30 grams of platinum each, Toyota saves US$300 per fuel stack. As the leading researcher claims, although platinum is the best catalyst, it’s ‘too rare and too expensive to use’ on a large scale. Future applications of these cheaper catalysts will grant FCVs more flexibility in adjusting to the market needs.

Smart grids and digitalisation

AI is fundamental to the integration of renewable energy, the stabilisation of energy networks, and the lowering of financial risks associated with instability in the overall infrastructure. For instance, the self-learning, adaptability, computing and calculation capabilities of AI have significant potential to address the intermittent nature of renewable energy. An imbalance in peaks of production and consumption are often represented through ‘the duck curve’ and can make these sources of energy difficult to control. The use of AI in smart grids will help address this challenge by rebalancing inequity between production and consumption loads.

Smart grid technologies help to make utilities sector activities more transparent and competitive and also prevent revenue leakages. Some of the applications of AI and ML in smart grids are as follows:

Image source: Saudi Aramco
Image source: Saudi Aramco

Agility and resilience: When renewable energy is generated by new partners like cooperatives and prosumers (producer and consumers), it is often intermittent and variable. IoT sensors and automation can be used to identify parts of the grid that are vulnerable and respond with automated rerouting thereby  storing surplus energy during peak generation times and rerouting it during gaps in the flow.

More precise forecasting: The utilities sector faces widespread price variability due to regular changes in energy consumption. Predictive analytics models can be used to more reliably predict power loads and renewable energy generation. By combining data from advanced metering infrastructure (AMI) with AI, predictions are more accurate than traditional approaches.

More sophisticated outage alerts: The network of sensors, smart meters, and actuators in a smart grid can give a ‘last gasp’ short signal transmission, including time and date, to indicate a loss in power due to partial or complete outages. In addition, the predictive capabilities of AI and the real-time data of smart meters can notify operators of outages right before they happen. These systems can even differentiate between individual, street, and regional outages.

Optimised power yield: The use of AI-powered sensor networks in generation stages can also be used to optimise power output. In the same manner, solar energy also benefits from AI tools to increase productivity by predicting radiation from the sun.

Improved automated switching: The ability of AI tools to predict grid imbalances and to differentiate between a brief power interruption and a full-on outage will soon allow switching protocols to be completely automated. This will allow energy and utility companies to reroute energy or isolate affected areas before severe damages occur or the outage expands to other locations. These tools are a line of defence that ensures the safety of the essential equipment used to isolate and repair faults.

More flexible demand-side management (DSM): Peaks in energy demand which is common nowadays especially during the scorching summers, put utility companies under great strain. Using AI and smart meters in homes and offices can help with scheduling, planning, executing, and monitoring changes in energy demand to ensure that the utility providers can meet them. Doing this can have a major impact on power usage, as shown by the US Federal Energy Regulatory Commission, which found that peak loads can be reduced by up to 150 GW through demand management. Similarly, the Electric Power Research Institute (EPRI) has estimated these smart tools could lead to a 175 GW reduction in summer energy peaks by 2030.

Sunil David
Sunil David

Impact on oil and gas demand

The increasing share of renewables in electricity generation is directly reducing the demand for oil and gas in power plants. As renewables become more competitive and grid integration improves, the need for fossil fuel-based power generation declines.

Electric Vehicles (EVs): The growth of the EV market, driven by improvements in battery technology and charging infrastructure, is reducing the demand for gasoline and diesel. Major automakers are accelerating the transition to electric fleets, which will significantly cut oil consumption in the transportation sector.

Hydrogen Vehicles: Hydrogen fuel cell vehicles, particularly for heavy-duty applications, are also emerging as an alternative to diesel.

Electrification of Heat: Advances in heat pump technology and the increasing availability of renewable electricity are promoting the electrification of residential and industrial heating, reducing the reliance on natural gas and heating oil.

Petrochemicals: While the petrochemical industry remains dependent on oil and gas as feedstocks, advances in bio-based and recycled materials are starting to offer alternatives. This sector may see slower transitions compared to energy and transportation.

Stricter climate policies and carbon pricing mechanisms are incentivising the shift away from fossil fuels. Governments and corporations are committing to net-zero emissions targets, accelerating investments in renewable energy.

Conclusion

The decarbonisation of energy is inevitable as the world gears up to meet the net zero target by 2050. Even though India has an extended deadline of 2070, the preparation must begin now. One positive development is the solar energy front where the country is scaling up rapidly. As renewable technologies become more cost-competitive, investment in new oil and gas projects may decline. Financial markets are increasingly factoring in climate risks, influencing capital allocation away from fossil fuels.

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