The future indicates the need for conversations now among stakeholders.
As Asia Pacific (APAC) countries prepare for a massive increase in electrification (Figure 1) with wind and solar at its heart, digital transformation is set to be the great enabler of decarbonization and decentralization for the emerging power system. Digital technologies, data analytics and, increasingly, artificial intelligence and machine learning will impact on all power supply and use stakeholders by making the electricity system more connected, intelligent, efficient, reliable and sustainable.
Figure 1: DNV’s Energy Transition Outlook 2020 projects a large increase in total power line capacity in Asia-Pacific between now and 2050, with rises for all voltage (V) levels: low (LV); medium (MV); high (HV); extra-high (eHV); and, ultra-high (UHV).
These tools of the digital transformation will be used to manage the growing complexity presenting a huge challenge for grids in APAC’s accelerating energy transition.
Grid operators managing this complexity to ensure secure supplies of affordable clean energy to everyone need to efficiently integrate vast volumes of variable generation from wind and solar. New technologies – floating offshore wind, hydrogen, HVDC, and hybrid grids – will add to the complexity. Grid flexibility will come from battery storage – including from electric vehicles – demand side response, flexible generation, and from greater grid interconnection.
We will, for example, see the rise of the supergrid in Greater China, the Indian Subcontinent, and Europe as grids expand to cover larger market areas. The Laos-Thailand-Malaysia-Singapore Power Integration Project is another step towards this future. Electricity market restructuring is meanwhile unfolding in Malaysia, Philippines and Vietnam as vertically integrated market structures transition towards competition and customer choice.
While significant investment in grid infrastructure will be needed for this future, digital grid operations hold the key to success in energy markets moving ever closer to being real-time, and to the extensive utilization of flexibility options. Digital technology is required throughout the energy system from generation through transmission and distribution, in commercial and industrial end-uses, and for individual consumers.
In the field, for example, digital operations and maintenance can involve field personnel collecting data using tablet devices, thus creating opportunities for automated operations based on models predicting component reliability by using real-time data. In short, digitalization can boost asset utilization, energy efficiency, and grid integration of renewables.
Cyber security is an integral part of grid modernization as electricity systems are critical infrastructure. Several cyber attacks on energy infrastructure have been reported since 2000. The risk is that they will become more common once we are all interconnected. Transmission and distribution system operators alike will need to consider the implications. Enacting cybersecurity laws for critical infrastructure in the energy industry could potentially slow digital initiatives. Discussion is also needed about society’s trust in and reliance on software algorithms important in automating complex energy systems.
Cyber security is just one major investment grid operators need to account for. Infrastructure development should be accelerated as we forecast that USD 1.3 trillion is needed by 2030 to ready the grid to accommodate various technologies. Existing grids were neither designed nor built for integrating variable renewables that introduce uncertainties and unknown risks, including potential vulnerabilities to cyber attack.
Regional utilities have begun adopting advanced data management systems to handle the big data that will pass through the system. A notable example is Malaysia’s LSS competitive bidding programme, where studies have been conducted on connecting Large Scale Solar (LSS) plants to the grid system in compliance with the country’s Grid Code and Standards.
DNV can assist such developments by sharing its independent view and experience of best practice in modern grid developments globally. We are seeing digitalization and automation start to enable new business models, for example. Several Local Energy Market trials – the TraDER project in Orkney, Scotland, being one – are testing automation of flexible demand, generation, heating and storage for domestic and business power users. The aim is to create a more efficient and intelligent system where electricity demand and consumption are better matched to reduce the need to curtail renewable generation.
Achieving digital transformation will require appropriate data platforms to prove a much higher level of transparency of supply security and capacity calculations for integrated regional electricity systems. Electricity distributors and aggregators will meanwhile need to increase the potential benefits from their large investments in advanced metering infrastructure; for example, in China, Japan, Korea and India.
The future we have painted above indicates the need for conversations now among stakeholders in national and regional electricity systems to facilitate a timely, secure, and efficient digital transformation to support APAC’s energy transition.
For example, asset owners, operators, regulators and investors could collaborate on how data sharing can enable enhanced cooperation between stakeholders and lead to a more connected energy system. Policymakers and regulators need also to support further technology developments and devise enabling regulation. Grid development needs in APAC require major political decisions on policy support and/or financial incentives. This will in turn challenge consumers to decide to what extent and how they will embrace the big picture of electrification bringing the benefits of cleaner, more reliable energy to more people.
DNV’s Energy Transition Outlook 2020: Power Supply and Use report provides a more detailed breakdown of the implications of digital transformation for specific stakeholders in the electricity system value chain.
Download Energy Transition Outlook 2020: Power Supply and Use