© OECD/IEA 2018
Digitalization & Energy
Carrie Pottinger, Energy Environment Division
Vienna, 20 March 2018
IEA
© OECD/IEA 2018
Digitalization: A New Era in Energy
• The energy system is on the cusp of a new digital era
• This first-of-its-kind Digitalization and Energy report will help shine a light on
digitalization's enormous potential and most pressing challenges
• But impacts are difficult to predict; uncertainty in technology, policy and
behaviour
• Much more work needs to be done…
• Next steps for IEA, especially to focus on high impact, high uncertainty areas:
- Automation, connectivity, and electrification of transport
- Electricity and smart energy systems
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Internet data traffic is growing exponentially, tripling over the past five years
Sources: Cisco (2017). The Zettabyte Era: Trends and Analysis June 2017; Cisco (2015). The History and Future of Internet Traffic.
Digitalization trends: truly astounding
0
50
100
150
200
250
2014 2020
TW
h
Data centre electricity use
Hyperscale data centres
Cloud data centres (non-hyperscale)
Traditional data centres
Sustained efficiency gains could keep energy demand largely in check over the next few years,
despite exponential growth in demand for data centre and network services
IEA analysis
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Supply: oil and gas, coal, and power
Energy companies have been adopting digital technologies for years,
to increase productivity, reduce costs, improve safety and environmental performance
Oil and gas
• Advanced processing seismic
data, use of sensors, enhanced
reservoir modelling
• Improved productivity, safety and
environmental performance
• Improved recovery 5%
• Reduced production costs 10-20%
Coal mining
• Geological modelling, process
optimisation, automation,
predictive maintenance
• Improved processes, safety,
maintenance and environmental
performance
• Improved efficiency CFPP 2-3%
• Reduced CO2 emissions 5%
Electricity generation, T&D
• Digital data and analytics
• Reduced O&M costs, extended
lifetime, improved efficiencies and
enhanced stability
• Savings up to USD 80 billion/year
(5% of total annual costs)
© Schlumberger
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Impacts on demand sectors: transport, buildings and industry
Digitalization has the potential to reshape, modernise, transform demand-side sectors;
policies are needed to maximise benefits and reap energy saving opportunities
Transport
• Automation, sharing, route
optimisation, platooning, data
sharing
• Passenger cars: Reduced energy
use, cost/journey BUT expected
increase in trips
• Trucking/logistics: Energy reduced
by 20-25%
Buildings
• Smart controls and sensors
(lighting, heating/cooling)
• Improved comfort, building
energy management
• Reduced energy use 10% by 2040
• Rebound effects are uncertain
Industry
• Advanced process controls, data
analytics, combined smart
sensors, 3D printing, machine
learning
• Increased productivity, reduced
costs and improved safety
• Lower costs at plant level but
broader impacts remain uncertain
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Pre-digital energy systems are defined by unidirectional flows and distinct roles,
The digital transformation of the energy system
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Pre-digital energy systems are defined by unidirectional flows and distinct roles,
digital technologies enable a multi-directional and highly integrated energy system
The digital transformation of the energy system
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Demand response programs in end-use sectors could provide 185 GW of flexibility,
avoiding investment in new electricity infrastructure of USD 270 billion
Smart demand response
1 billion households and
11 billion smart appliances
could actively participate in
interconnected electricity
systems
Residential sector
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EVs smart charging would provide further flexibility to the grid
saving between USD 100-280 billion investment in new electricity infrastructure
Smart charging of electric vehicles
EVs standard vs smart charging Capacity requirement
150 million EVs
140 GW
75 GW
500 million EVs
300 GW
190 GW
Standard charging
Smart charging
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Digitalization can help integrate variable renewables by enabling grids to better match
energy demand to times when the sun is shining and the wind is blowing.
Integration of variable renewables
Curtailment of solar PV and wind
7%
2040
Digital flexibility
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Digitalization can facilitate the deployment of residential solar PV and storage,
making it easier to store and sell surplus electricity to the grid or locally
Distributed energy resources
Blockchain could help to facilitate
peer-to-peer electricity trade
within local energy communities
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Building digital resilience
• To date, cyber disruptions to energy have been small
• But cyber-attacks are become easier and cheaper – malware, ransomware, phishing /
whaling, botnets
• Digitalization also increases the “cyber attack surface” of energy systems
• Full prevention is impossible, but impact can be limited:
- Raised awareness, cyber hygiene, standard setting and staff training
- Coordinated and proactive preparation by companies and governments
- Design digital resilience in technologies and systems
• International efforts can help raise awareness and share best practices
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Managing privacy concerns
Source: Newborough and Augood (1999), “Demand-side management opportunities for the UK domestic sector” (reproduced courtesy of the Institution of Engineering and Technology). 13
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1. Build digital expertise within their staff.
2. Ensure appropriate access to timely, robust,
and verifiable data.
3. Build flexibility into policies to accommodate
new technologies and developments.
4. Experiment, including through “learning by
doing” pilot projects.
5. Participate in broader inter-agency
discussions on digitalization.
6. Focus on the broader, overall system benefits.
7. Monitor the energy impacts of digitalization
on overall energy demand.
8. Incorporate digital resilience by design into
research, development and product
manufacturing.
9. Provide a level playing field to allow a variety
of companies to compete and serve
consumers better.
10. Learn from others, including both positive
case studies as well as more cautionary tales.
No-regrets policy recommendations
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Digital technologies are everywhere….
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Growth of IoT and connected devices
The growth in network-enabled devices presents opportunities for smart demand response
but also increases needs for standby power
0
1 000
2 000
3 000
4 000
5 000
6 000
2010 2015 2020 2025 2030 2035 2040
TWh
Network-enabled
Not connected
Household electricity consumption of appliances and other small plug loads
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Buildings
Widespread deployment of smart building controls could reduce energy use by 10% to 2040
0
10
20
30
40
50
60
70
By sector By end use
PWh
Non-residential
Residential
Others
Appliances
Lighting
Water heating
Space cooling
Space heating
IEA analysis
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© OECD/IEA 2018
Transport
Intelligent transport systems are improving safety and efficiency of all modes,
with the most transformative impacts expected in road transport
Road freight
• Digital solutions for trucks and logistics could reduce
energy use for road freight by 20-25%.
• Digital solutions include platooning, route optimisation,
and data sharing across the supply chain
Road passenger
• Automation, connectivity, sharing, and electrification
(ACES) to dramatically reshape road transport
• Impacts on energy demand difficult to predict
• Automation and connectivity could halve or double
energy demand, depending on how technology,
behavior, and policy evolve
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© OECD/IEA 2018
Industry
Energy use can be incrementally reduced at the plant level
but widespread use of 3D printing, AI and robotics could herald transformative changes
0
5 000
10 000
15 000
20 000
25 000
Conventional
components
AM components
Tons
Metal demand
in 2050
Aluminium alloys Nickel alloys Titanium alloys Fuel savings
0
250
500
750
1 000
1 250
1 500
1 750
Slow
adoption
Mid-range
adoption
Rapid
adoption
Million GJ
Cumulative aircraft fuel savings
to 2050
Source: Huang et al. (2016)
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