The journey to the empowered consumer begins with the digitalization of central generation and the grid, says Ganesh Bell

Imagine your electric life in 2025. Your home has solar panels, of course. Your neighbors’ homes and kids’ school do too. In fact, all the parents who helped fund the school solar facility use its electricity in their homes at weekends.

Surplus energy from your roof, and a share of what the school generates flow into your electricity ‘bank account’. You can easily check your balance on your MyPower App. You usually do that ahead of a road trip to grandma’s, because that’s when you can sell the electricity you’re not using back to your microgrid-neighbors or to the utility. Your neighbors are especially keen to buy during the summer months, when demand exceeds the utility’s renewable energy supply, and it has to bring more expensive resources online, causing prices to rise.

GE was quick to embrace
GE was quick to embrace the benefits of digitalization

Since you have a ‘credit’ card for your electricity account, you can recharge your electric vehicle at a freeway charging station on the way to grandma’s. The charging is free of course. You just pay a small fee to transfer your electricity across state lines and between utilities, but it’s still worth it. After all, you did well selling your surplus solar back into the grid when you were in Hawaii over the holidays.

When you get to grandma’s house, it’s mealtime, and the kids fire up their devices. Your App gives you an alert. Grandma is about to start getting billed at peak rates. (Your accounts are linked). You ping your microgrid neighbors back home to see who has any low-cost electricity to sell. You also use the MyPower app to lower the temperature setting in the house to 65. After all, it is now full of people generating their own energy!

Does the scenario sound far-fetched? The truth is, it’s already starting to happen.

In its first half-year 2017 investor conference call, Électricité de France (EDF), one of the world’s most valuable utilities, highlighted that its EDF & Moi energy monitoring App has already been downloaded four million times. Nine months earlier, EDF previewed a new subsidiary, Sowee, which is dedicated to digitalizing energy use in homes.

In April, another of the world’s largest investor-owned utilities E.ON, debuted E.ON SolarCloud, a product that offers solar power producers the ability to store unlimited amounts of energy they produce in a virtual electricity account, and draw on it anytime they like.

In the Netherlands, PowerPeers is running a solar sharing pilot just like the school example I shared above. And microgrids are popping up from New Jersey to the Cotes d’Azur in France.

Sure, many of these programs are pilots or in their early stages, but the digitalization of the electricity industry is clearly underway.

Customers often ask me: what will it take for digitalization to become a mainstream reality?

I tell them I’ve long held a belief that every industry will be reimagined with software, and I foresee an end-to-end digitalized electricity value network. It will be a network in which every node doesn’t just generate or consume electricity, it also generates a data bit for every electron.

And the data generated will fuel our industry’s ability to drive-up efficiency, lower emissions, and bring more flexibility and resilience to generation and to the grid. It will also transform the way we operate and maintain our assets, and streamline labour-intensive processes.

Ganesh Bell: “I forsee an end-to-end digitized electricity value network”

Digitalization will give the industry the insights it needs to intelligently manage demand (and supply) from a proliferation of electrified buildings and vehicles. A connected Electricity Value Network will ultimately enable the creation of an Internet of Energy, and with it new business models for providers and more choice for consumers.

The journey to the empowered consumer begins with the digitalization of central generation and the grid. Without digitalized generation, no power producer will have the insights it needs to forecast accurately and trade intelligently in a digital marketplace. Without a digital grid, we can’t possibly seamlessly integrate distributed energy resources, nor put the power of choice in the hands of our customers.

But don’t presume this to be a long-term trend. The first pieces of the digital puzzle are already coming together at the world’s leading power producers and utilities.

In the two years since GE launched its Digital Power Plant solutions, more than 60 power producers and utilities representing 20 percent of global thermal generation have started their digital journeys with our software.

For example, SSE, one of the UK’s broadest based energy companies, implemented Asset Performance Management (APM) software (one of the key applications in the software suite) to continuously monitor asset health at 11 thermal generation facilities. APM’s predictive analytics allowed SSE to understand pending issues before they become production problems, allowing proactive action to avoid unplanned outages. SSE has experienced a significant reduction in plant failures, resulting in increased plant availability and production, and savings of approximately £3 million per year.

Efficiency gains are another benefit that customers are seeing from digital solutions.

Last year, EDF’s combined cycle power plant which uses GE’s largest and most efficient 9HA gas turbine reached world record heights when combined with Digital Power Plant software at a facility near the village of Bouchain in northern France. The plant converts more than 62 per cent of fuel energy into electricity.

These types of benefits are made possible in part by thousands of sensors on everything from the HA turbine to piping in boilers, which relay terabytes of information. These sensors take measurements of pressure, temperature, vibration, and a raft of environmental variables to gauge plant health in real time. By comparing operating data with Digital Twin models (which show an asset’s optimal performance) the software can suggest the optimal way to run a plant at a given time.

But data science alone can’t deliver these types of benefits.

It is a combination of industry expertise and data science that truly delivers the greatest value. For example, GE engineers push our turbines to their design limits and beyond at our test facility in Greenville, South Carolina – the largest of its kind in the world. There, they gather massive amounts of data on turbine performance under extreme conditions, learning physical limitations as they go. These tests in turn allow GE engineers to write software to help customers run power plants optimally.

An Internet of Energy requires more than just baseload generating efficiency. It requires true flexibility and agility across the fuel mix. And digital solutions can provide that too.

For example, by using GE’s Advanced Controls software, NRG has been able to operate its 810 MW Hunterstown plant safely above baseload conditions. Based on modeling and historic PJM energy pricing, this system upgrade is capable of providing NRG a 2-3 percent improvement in MW output through peak firing, potentially delivering more than $5 million of additional profitability with zero impact to its critical outage schedule.

These types of benefit also extend to renewable energy.

Exelon has started to deploy GE’s software applications across its generation fleet, which delivers 32,700 megawatts of nuclear, wind, solar, hydroelectric, and natural gas power. The deployment has increased performance and reliability, including a 1-2 percent boost in annual wind energy production.

Beyond central generation

Central generation will clearly be a critical component of the electricity value network for decades to come, yet the future of our industry will also be characterized by renewable energy resources that are geographically dispersed and whose ownership is also distributed.

The momentum is irrefutable: in 2016, renewables accounted for 85 per cent of new power installs in Europe. FERC reported that renewables accounted for 50.5 per cent of new US electrical generation put into service in 2016. Forty-eight per cent of new electricity capacity came from renewables in China last year, and 66 per cent in India.

But consider the ownership of these assets: a December 2016 study by the Energy Information Administration highlighted that about 44 per cent of all solar power that’s installed on residential rooftops in the US has a third-party owner (TPO). TPOs are much less common, however, in the commercial and industrial sectors, with just 11 per cent being owned that way. And DER deployment in the C&I sector is expanding rapidly. Consider data centre service provider Amazon Web Services, which was on track to generate 40 per cent of its own electricity by the end of 2016. Similarly, the world’s largest retailer Wal-Mart produced 140 MW of its own solar power in 2015.

It seems probable that ownership of DERs will be increasingly fragmented, especially in the residential sector. GTM Research predicts individual ownership will overtake third-party ownership as more consumers choose to buy versus lease panels. A study by LO3 suggests 61 per cent of consumers who do own their own solar are interested in having access to an energy sharing market place.

Whatever the ownership model, the growth trend is clear. DERs are forecast to grow in the US from ~55 GW in 2016 to 135 GW by 2024, and will grow from Europe’s base of 32GW five times faster than centralized generation.

That’s a whole new energy landscape for which a new generation of grid management software is required.

Such software, for which GE has begun to file patents, will build on our considerable legacy of ADMS, DERM and Energy Management System software to usher in an era in which the grid is optimized for distributed energy generation and storage, and designed to self-optimize based on inputs such as weather data, utilization forecasts, price. It’s an exciting future, which we are hard at work to make a reality.

Our industry is being reimagined with software, and it’s going to happen much faster than any of us expect.

It really won’t be long before you’re making money from your solar panels as you drive to grandma’s house.

Ganesh Bell is Vice President at GE Digital.