Looking ahead in the Energy Sector
Looking Ahead in the Energy Sector
It’s fairly accepted that the use of fossil fuels is damaging our environment. Moving away from those energy sources and transitioning to renewable, sustainable energy sources is humankind’s best chance at slowing or even reversing the damage already caused.
This past year also saw an energy crisis unfold in much of Europe. Russia’s invasion of Ukraine and their subsequent slowdown in oil delivery through the Nord Stream pipeline had European governments concerned. The shutdown intensified when the pipeline ruptured in September. November saw only 1.86 Bcm of oil delivered to Europe in 2022, far below the 10.09 Bcm delivered during the same period in 2021.
We still don’t know the extent of the European Union’s energy crisis. Reserves are depleting, prices are increasing, and according to the World Economic Forum, this is causing “significant harm to consumers.”
European leaders are talking about energy independence from Russia. On March 8, 2022, they released a plan that would make Europe independent of Russian fossil fuels by 2030. Called the REPowerEU concept, the plan seeks to diversify gas supplies, increase renewable gases, and boost energy savings.
The upshot of this crisis is world leaders are increasing their investment and reliance on sustainable energy sources. In 2021, we saw 173.5 GW in new solar capacity. That was expected to increase by another 260 GW in 2022.
Current State of Renewable Energy and Impact of Data
The renewable energy industry is growing by approximately 20% every year. This rapid acceleration combines wind energy, solar power, hydropower, and bioenergy sources. Interestingly, data is playing a major role in developing new energy sources.
Data is allowing solar and wind farms to increase efficiency. The insights offered by data sources allow these industrial complexes to make adjustments to their daily operations. Data is also helping these energy plants to get more out of every solar panel and wind turbine.
One key area where data helps is forecasting the weather. Artificial intelligence (AI) combined with weather satellites and predictive analytics help predict the amount of energy that will be generated. This estimation is essential in integrating solar energy into the power grid.
Big data is also being used to plan better wind and solar farm installations. It helps optimize the number of panels or turbines needed to generate the maximum output for a given facility. This helps reduce the cost of building these facilities by eliminating waste and unnecessary development expenses.
Optimizing Renewable Energy Resources in 2023
There are a few tools we are going to see more of in 2023 that will optimize performance and increase output. First, the AI technology connected to renewable energy sources is improving and becoming more accessible to the average energy farm.
Plant owners and managers are gaining increased access to reliable, relevant, and current information to make data-driven decisions. For example, an effective AI platform connected to a solar farm can help identify underperforming solar panels by analyzing the volume of energy being generated. From there, it can analyze whether the investment to fix the problem is cost-effective, and finally, it can explain how to fix the problem.
These sophisticated diagnostics are typically transparent. They are used to increase the daily energy harvest, reduce the cost of maintenance, and increase energy farm profit margins.
This year will also focus more on cleaning solar panels to generate more energy. Our research has shown that cleaning solar panels helps generate up to a 30% increase in energy yield. We expect to see robots being deployed for these cleaning missions, which will help increase capacity.
Renewable energy storage is another challenge that we believe will be addressed in the coming year. At this point, electricity companies limit the amount of energy that it receives. Any energy created above that capacity is lost.
This may result in a few different scenarios. The most obvious one would be some storage solution, either controlled by the electric company or the energy farm. As more energy is needed, the stored energy could be transferred to the electric company for reselling.
However, a more interesting solution might come via the Internet of Things (IoT) combined with the Internet of Energy. This could create a decentralized energy market, where industrial buildings or neighborhoods buy their energy directly from energy farms and store it until it’s needed. The technology layer controlling the energy can make real-time, data-driven decisions to drive energy efficiency and improve the customer experience.
Prioritizing Sustainable Energy Sources
According to the World Economic Forum, nearly 20% of the world’s carbon emissions come from manufacturing facilities. Even more astounding, they consume 54% of the world’s energy sources. This double blow to the earth’s environment needs to be significantly reduced.
As we move through 2023 and into 2024, developing sustainable, replenishable energy sources is one way that manufacturing plants can reduce their environmental impact. Manufacturing companies need to look into ways to invest in sustainable energy. For example, many plants have large roofs on their plants and large parking areas for their employees. Both these areas can be enhanced to support large sections of solar panels.
These facilities can produce electricity on their own, eliminating their need to use the world’s limited resources. The AI technology and automated cleaning tools discussed earlier can help these plants optimize their energy yield by up to 30%. While every plant has different energy needs, many manufacturing facilities would be capable of becoming energy self-sufficient.
The return on investment for these facilities will be paid back in three ways. First, by developing their own power sources, businesses will save significantly on their operating expenses. Second, as they move toward becoming a green manufacturing plant, they will have opportunities to work with new markets that prioritize green manufacturing. Finally, they can use their new green status as a marketing engine to reach new customers and grow sales.
How Governments Can Enhance their Energy Independence
While it takes large tracts of open space to create wind energy or powerful water currents to develop hydroelectricity, every home, building, and available space can be used to capture solar power.
Regional and national governments and municipalities should put solar energy generation high on their list of priorities for 2023 and beyond. They can offer tax credits, subsidies, and other incentives, as well as change zooming laws where required, to encourage the construction of solar panels on every residential home and apartment building.
Governments should also encourage commercial establishments, from office buildings to shopping centers, to invest in their own solar energy micro facilities.
These government-led efforts won’t change things immediately, but they can go a long way toward creating energy-independent homes, businesses, cities, regions, and countries. Massive coverage of rooftops will take some investment, but it will democratize energy, improve the environment, and reduce the hold international oil suppliers have on other countries.
Of course, this type of change requires a change in public policy. Research has shown that fiscal incentives help stimulate radical innovation in renewable energy. Germany created one of the first renewable energy tariff programs in Europe. The program helps the industry turn into a cost-effective program. When the state decided to drop its feed-in tariff levels, the market was large enough and stable enough that it wasn’t noticeably affected.
Building on Change for Renewable Energy
Globally, there were over 300 gigawatts of renewable energy created in 2022. This is a positive step forward, but unfortunately, it is just a small step.
In 2021, the world’s total energy supply was 14,500 gigawatts, which means that renewable energy makes up about 2% of the world’s energy supply. We need to see significant R&D and investment from the world’s governments if we will make a lasting dent in our reliance on fossil fuels.
There are several countries leading the way forward with renewable energy. Renewable energy provided Germany with 49% of its energy use in the first half of 2022. Costa Rica, Scotland, Norway, Uruguay, and Iceland’s energy use is nearly 100% renewable. These success stories are built on commitments from governments to get started and eventually are taken over by the private sector.
This past year showed positive signs toward the expansion of renewable energy. We need to continue to build on those successes as we move ahead into the future.
Featured Image Credit: Provided by the Author; CEO of BladeRanger; Thank you!
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