Ten years ago, the landscape was very different. Driverless cars were just something you saw in sci-fi films. We didn’t have film streaming services (can you even imagine a life without them now?), and smart phones just made their debut in the market.
Great strides have been made in the last decade not only in the way we interact with technology, but also in how we consume energy. In 2007, global renewable electricity generation capacity was at an estimated 240 gigawatts, which at the time was a significant amount. Fast-forward to a decade later, and the reality is strikingly different.
Today, countries across the globe are relying less and less on fossil fuels and are continuing to focus on powering the world through clean energy. The latest report from the International Energy Agency claims that a record 153 gigawatts of green electricity was installed last year alone, which was more than the total power capacity of Canada.
It’s now time to build on this momentum and commit to a bright future for the next generation. In this blog, we will look at some of the biggest trends that are shaping the renewable energy landscape over the coming years.
Fast Innovation Cycle
Today, innovation is moving at break-neck speed. It took fossil fuels decades to take over the world, yet it took only 20 years for renewables when they overtook coal as the world’s largest energy source last year. In order to become a viable and competitive energy source, renewables have, in turn, catalyzed vast technological advances, which have had a profound impact on the business models and mindset that companies must adopt to stay ahead in an increasingly competitive market environment.
In the solar industry, new innovations are focused to increase equipment efficiency to extract more power out of the sun. One of these latest innovations comes from the new material Silicon Carbide (SiC). For example, a Silicon Carbide inverter allows an additional 1 percent in power conversion efficiency compared to today’s standards. This may not seem like a big amount at first glance, but if a 100-megawatt (MW) solar plant was just 1 percent more efficient, it could result in more than $2.5 million worth of additional energy being produced over the plant’s lifetime.
Similar transformations are happening in the wind industry, where equipment availability is of paramount importance. The premium high availability requires high reliability of each single piece of equipment as well as the entire system. At GE, we provide generators, converters, pitch motors and even the turbine itself. We know each piece of equipment inside and out, and therefore are able to provide an integrated solution with each equipment configured for optimized energy output.
Growth in Scale
Scale is also gaining momentum as the popularity of renewables continues to soar. Today, national governments as well as regional authorities are eyeing to support and leverage large-scale renewable farms to provide more affordable clean energy, as these super-sizing farms can unlock economies of scale and bring in significant infrastructure cost reductions.
As plants grow in size, new opportunities rise to improve efficiency at the farm level through system optimization. Energy organizations should also look at solutions that allow a truly integrated approach.
Meanwhile, we have also seen the procurement processes move to an auction model—the government issues a call for tenders to procure a certain capacity or generation of renewables-based electricity. This new approach is providing privilege to large renewable farms that can then enjoy economy of scale out of larger installations. Driven by a more well-planned and transparent process as well as more cost-effective renewable electricity production, the model is expanding worldwide. Emerging countries, such as Brazil, are among the first to launch this auction system.
Countries that have implemented renewable energy auctions by early 2015 (in blue):
Where the Future Lies
However, as the demand for power continues to increase globally, relying on a sole source of renewable energy does (unnecessarily) limit options. That’s why the current focus should be on using technology to combine multiple energy sources and tackling the overarching challenge of unpredictable energy output. Hybrid power generation really is the key to unlocking the power required for future generations, but this is not the only option. Through utilizing digital technologies, operators can also manage multiple farms from a central location, helping to monitor performance concurrently and make data-driven decisions to optimize energy output while maximizing revenues based on changing grid pricing conditions.
The use of the “digital twin”—a powerful digital replica of physical assets—can allow operators to move to a predictive model of maintenance. This allows for the reduction of unplanned downtime and excessive maintenance costs. By comparing the digital twin to the asset at real time, it can warn of off-standard behavior up to weeks in advance and prevent potential failures before they strike. This data-driven approach can thus increase efficiency and productivity, as well as reduce risks of plant shutdown.
In fact, the digital promise stretches farther and wider. From Henry Ford’s moving assembly line to Taiichi Ohno’s Toyota production system, now known as lean production, manufacturers globally have constantly strived to make their operations better. Today, the key to this is digital technology. GE has built “Brilliant Factories” where factory equipment and software can talk to each other over the internet in real time, share information and help operators make more informed decisions that will help ensure product quality and avoid unplanned plant shutdowns.
Renewables are expected to cover more than 60 percent of the increase in world electricity generation over the medium term, rapidly closing the gap with coal. While 2016 was an excellent year, there is still room for more work. Incremental gains can be achieved through asset optimization, but as the future of renewables is inevitably marching towards a more sustainable hybrid and digital future, companies should make themselves ready to embrace the leap to ensure its continued vitality and long-term viability.