Last month, I was in Houston, TX at IHS’s annual event CERAWeek. As usual, energy leaders from across the world gathered to talk about the challenges and opportunities ahead.
The next 35 years will see the global population grow to over 9 billion people. We already have over 1 billion people without access to power, and another 2 billion without adequate access. We are even more dependent on power for our daily lives; for the development of economies, for the growth of industry and the development of society. At the same time, in a post-COP 21 world, there’s a powerful movement to a lower-carbon future.
The challenge, then, is to deliver an affordable, sustainable and reliable framework for the future. It was clear to all at CERAWeek that carrying on as we have done is not going to get us there; capital will prove challenging and we can’t afford inefficiencies within generation, transmission and distribution. In addition to new power additions with latest technologies, we need to upgrade what we have and ensure everything we build fits a new, digital paradigm.
A recent report released during the 2016 Annual World Economic Forum estimates that digital technology has the potential to unlock $1.3 trillion of value across the energy industry, improving asset life, streamlining grid operations, enhancing customer services and unlocking new services and business models for the industry.
And this isn’t just about net-new built power; driving efficiencies across the existing power generation estate will have huge benefits. As early as four years ago GE estimated that a 1 percent efficiency improvement would yield over $60 billion in gains in the industry over 15 years, plus associated multibillion dollar benefits in adjacent industries. Today, we see even greater opportunity. By digitizing different power generation technologies, up to $230 million could be saved per new combined-cycle gas power plant, $100 million per wind farm and $50 million per digitally retrofitted gas plant. Globally, this equates to $75 billion of impact.
The digital industrial transformation is the marriage between GE’s 120 years of product and domain expertise with the power of software to solve some of the biggest challenges facing the energy industry. Imagine using data to drive towards zero unplanned downtime or getting 1 percent more power out of the installed base with limited incremental fuel or emissions.
Energy companies around the world are embracing the power of digital solutions. For example, Qatar LNG producer RasGas now uses GE’s Predix Cloud analytics platform to improve the performance of its assets and facilities. Exelon in the U.S. will be using digital planning models to streamline the integration of different power generation sources -- thermal and renewable -- into the grid. Sapphire Group in Pakistan is also using the Industrial Internet to manage its assets and enable power production to deliver returns.
One thing is clear: The digital revolution in power is happening now; and is increasing the efficiency, affordability, reliability and sustainability of the sector. That’s why GE is leading the digital industrial transformation -- we believe it’s core to the future of electricity. It is exciting ... shaping all we do and definitely keeps me learning.
By Steve Bolze
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The writer is president & CEO at GE Power. The views reflected in the article are his own. -- Ed.