You Need to Understand These Four Trends Because They Are Transforming the Energy Industry
October 13, 2017
GE Reports Canada
The pace of change in Canada’s energy sector has been so dramatic in recent years that experts no longer view it as an industry in the traditional sense. Today, the emphasis is on the Energy Ecosystem, where technologies, power sources, and industries are growing increasingly interconnected. The outcome? Reliable energy at the lowest possible cost.
With the help of Scott Peever, Sales Manager at GE Distributed Power, we’ve pulled together a primer on the four biggest trends that are making an impact on the Energy Ecosystem right now.
Distributed generation isn’t new: the first combined heat and power solution dates back to 1882. But the trend of producing power close to where it’s consumed has lately been gaining serious momentum. Peever says there are three key reasons why customers now want to be active participants on the grid:
Electricity costs in Canada are going up. In Ontario, prices rose 71 per cent from 2008 to 2016, while increases in other provinces averaged 34 per cent.1 “In many places utility companies are charging more and more, and that makes it more attractive for companies to produce power on their own. In Ontario, companies that produce power onsite with GE’s Jenbacher or Waukesha gas engines often achieve costs savings greater than half of their electricity bill.
Advances in technology are making it easier to produce energy exactly where it’s needed. Many components of renewable energy are become cheaper, like solar power and energy storage. As prices go down, it becomes practical for companies to produce power at their own facilities.
It builds resilience. Grid gone down? If you’re producing power locally, it might not matter. “After a disaster, the only sites that stay running are the ones that have on-site power,” says Peever.
In Canada, the push for lower or even zero-emission power generation has two inescapable drivers:
1. Government regulations that put a price on pollution
2. Increasing customer demand
The Canadian government has announced plans to ensure that all provinces put a price on carbon starting in 2018. “Everyone’s looking for ways to help the environment and still maintain competitiveness,” says Peever. How to balance the two? By deploying renewables such as wind and solar, retiring coal, or by using natural gas more efficiently through combined heat and power.
Business leaders are also backing the transition to a low-carbon energy system, with companies like Royal Dutch Shell and GE pushing to increase the pace of improvement in energy efficiency and emissions-cutting technology. And as the cost of renewable energy continues to drop, low carbon alternatives to traditional energy are growing increasingly competitive. The Energy Transitions Commission, a group of business leaders, representatives of international institutions and environmental groups, estimates that within twenty years many countries could source nearly all of their electricity from renewables.
The Age of Gas
Natural gas has a lot going for it. For starters, it’s lower in emissions than other fossil fuels. And there’s a lot of it to go around: Canada is the world’s fifth-largest natural-gas producer. Natural gas fits perfectly into the Energy Ecosystem because it can provide “back up” capacity as more renewables come on line and as coal is phased out, which is set to happen in Canada by 2030. In fact, Ontario already achieved this in 2014, completing phasing out all its coal power plants over a ten-year process. Remember smog days? Ontario had 53 in 2005, and only one in the last three years.
Natural gas is much cleaner than coal, producing 50% fewer emissions, and it’s helping provinces transition to lower-carbon alternatives. For example, Alberta could realize its goal of phasing out coal-fired electricity up to 10 years ahead of schedule by shifting its power plants to natural gas.
Natural gas bridges the gap for intermittent power sources by producing energy as needed. As an on-demand energy source, natural gas can be brought online quickly; the latest flexible combine-cycle natural gas power plants can start in less than 30 minutes and increase power output by 100 megawatts per minute. As part of the renewable energy mix, natural gas plays a crucial role in realizing a low-carbon future.
Natural gas also comes from renewable sources like landfills, municipal green bin collection, livestock manure, sewage treatment plants and forestry waste. The province of Ontario is investing $100 million in renewable natural gas, and there are several places in Canada where GE’s omnivorous Jenbacher engine provides heat and energy from renewable natural gas. For example, the new Biomont facility in Montreal uses a Jenbacher that consumes landfill gas, generates electricity for Hydro Quebec, and produces heat for the Cirque du Solei headquarters.
The thread that ties the entire Energy Ecosystem together is digital technology. By leveraging the latest software, data analytics, and connected machines, companies are gaining the power to lower costs, boost efficiency, reduce emissions, and improve business outcomes. Canada is leading here, too. “Every one of our engines is installed with the ability to feed information into a cloud-based Predix tool, so if there’s an issue, we can see what’s going on and troubleshoot,” says Peever. Customers now have the power to inspect every single one of their assets on a smartphone.
Companies are now able to apply those insights with the help of physics-based models called Digital Twins, which are virtual counterparts to real-world assets. Digital Twins are created for each individual asset, and then all those Digital Twins can be synthesized across the entire network of assets, enabling companies to optimize their machines, processes, and business capabilities.