Trends in renewables management

In Part 2 of our Energy Transition Talks podcast series, CGI experts Rita Burnay and Peter Warren explore trend in renewables management, including the growing importance of data, green hydrogen and cloud to support the evolving energy economy. This article provides a summary of the discussion.

From a niche market, the renewables sector is evolving into a global industry with a pivotal role in the energy transition and the quest for a more responsible and sustainable future. Today, the major renewable energy sources are hydro, wind and solar. Wind and solar currently account for 700,000 gigawatts of installed capacity; yet, they represent only 50% of the hydro energy produced. "There is a lot of space to grow. As portfolios become larger and wider, and the footprint of renewables gets bigger, it's a totally different world from the niche market a few years ago," says Rita Burnay.

Importance of interconnectivity

Accelerating digitization and enhanced interconnectivity are key driving forces of the evolving energy value chain. The focus is on owners, owner-operators, and grid operators in renewables management. "For these three market players, there is lot more of a need to build effective management systems that require digitizing operations and more interconnectivity between all systems," says Rita. 

The benefits of interconnected systems are manifold. Grid operators gain complete visibility of the portfolio and production, while operators and owner-operators can forecast production and conversely align production based on forecasts. In addition, better connectivity supports workforce management for asset maintenance and insight-led market decisions, including what and how to produce, how much to store and sell, etc. 

Hydrogen and renewable energy convergence 

Energy storage is one of the new challenges facing the renewables industry, exacerbated by the high price of new storage technologies. "The industry needs to work on lowering the price to make it more balanced in terms of the cost-benefit," says Rita. Hydrogen is central to these discussions. In particular, finding ways to combine green hydrogen production and storage with existing wind power plants or solar power plants is growing in importance.

In Portugal, says Rita, oil and gas companies are most active in the hydrogen space. "These companies are exploring how to restructure their existing pipelines or pipeline network to adopt hydrogen rather than natural gas or other sources." Another trend is that many existing clients are diversifying to include storage and also to integrate solar, wind, biomass and biogas in the same platform.

Based on her work with clients, Rita shares her top two recommendations for companies entering or diversifying into the renewables market.

1. Do not reinvent the wheel. There's a certain tendency (mostly among larger companies) to in-source everything. Instead, look at industry and technology experts as accelerators to support and safely advance your energy transition journey. 
2. Establish a solid foundation for innovation. Start with data, beginning with data governance and data quality, and then progress to features and functionalities. Basing innovation on a solid data foundation will help you avoid the pitfall of having numerous minimum viable products (MVPs) and proofs of concept (POCs) that don't generate value for the business.

The cloud imperative

As renewable energy ecosystems widen and become more digitized, leveraging cloud-enabled solutions not only can bring cost savings, but they also offer flexibility and scalability to support the speed of transformation. Moreover, the cloud makes machine learning and artificial intelligence capabilities more accessible so organizations can benefit from data intelligence to predict asset failures or performance flaws and gain deeper insights through root cause analysis. 

Listen to another podcast in this series: Grid modernization impacts on energy distribution
 

Read the transcript by chapter:

Chapter 1: Introductions

Peter Warren:
Hey! Good afternoon Rita. How are you?

Rita Burnay:
I’m fine and what about you, Peter?

Warren:
Why don’t you describe and introduce yourself to the team, and then I’ll do the same, and then we'll get into a little bit of conversation about all things renewable.

Burnay:
OK, so I’m Rita Burnay, working for CGI in the utility space and for more than 15 years in the renewable space.

Warren:
OK perfect, and I’m Peter Warren. I’m with CGI based out of Canada. I’m the global industry lead for energy and utilities.

Chapter 2: The evolving renewables market

Warren:
So, Rita, you mentioned that you've been doing this for a long time, and you've been focused on renewable energy. When you start looking at the industry and stuff, how do you see this fitting in today versus years ago? Has anything majorly shifted in how people were using it before and using it now?

Burnay:
Well, a lot of differences. I think that the renewables market is very much shifting from a niche market into a more industrial one, stepping steadily into digitalization. And that’s also having a huge impact in terms of this energy transition and the role to play in a more responsible and sustainable future. So that's quite exciting times, to be honest. I feel really thrilled with the times we are living [in]. I'm very happy to be working in renewables because I believe that we are a bit changing the game.

Just sharing some information. Currently, the installed capacity from wind and solar has reached 700,000 gigawatts. So, when comparing to hydro—so hydro, wind and solar are basically the main renewable energy sources currently. There are many more, but those are the major ones. In terms of energy produced, both wind and solar summed up are still representing only 50% of the hydro energy produced. So, there is still a lot of space to grow in that. As portfolios become larger and wider and the footprint of renewables gets bigger, of course, it's a totally different world from the niche market from a few years ago.

Chapter 3: Changes to the supply chain

Warren:
Yeah, I think that's a key component that you mentioned there because this has really gone from something that a few people did, and quite often startups, to being mainstream. Obviously, you work with large mainstream companies, too; but even their work was sort of more experimental, I think, to really being a key part of the front end of the whole supply chain. Do you see that the supply chain is going to change in the future? You point to the fact that it's got to grow, but how do you see that sort of evolving? How do you see that fitting in the future?

Burnay:
I think that digitalization is surely a key aspect—also, the better interconnection between systems. There are a lot of players in the ecosystem, so if we look more on the renewables management and supply chain, for me, we could focus on the main players such as owners, owner-operators, and grid operators. For these three market players, there is a lot more need to build up effective management systems where you have to digitalize the operation, and also more interconnectivity between all systems so that the grid operator has full visibility on the portfolio and the production. What is being delivered in the network, but also from the operators and owner-operator side of this point of view, a more interconnected system with forecasting production, or the production of the forecast, the workforce management for managing the maintenance and also the market, so that you can make more supportive decisions on what to produce, how to produce, if we should store energy, if we should sell it, what to do [etc.]

Chapter 4: Storage

Warren:
Yeah, I totally agree with you on that end-to-end view. I mean, demand management was maybe more fragmented in the past because supply was a little bit easier to turn on and off with more carbon-based sources—coal being one that I know was a big favorite over here for a long time for doing that because it could make instant heat and they were happy with it. So, as we move into these things, you mentioned storage. Are you starting to work with storage? Do you see people doing things with storage? Any comments on either battery or chemical storage or, you know, even pumping water uphill, anything like that?

Burnay:
Well, pumped water is almost legacy.

Warren:
Yeah, it is now.

Burnay:
Indeed, there are these trends that we see in the industry. So, definitely storage is part of the new challenges. The price for this technology is also a challenge. We still need, or the industry as such still needs to work on lowering the price to make it more balanced in terms of the cost-benefit. And, of course, hydrogen, which is also on top of the table with all these larger discussions. So, to see hydrogen both as storage, but also the hydrogen production, the green hydrogen—that's how we call the hydrogen produced with renewable energy sources. This is definitely a trend, and how to combine hydrogen storage or hydrogen production with existing wind power plants or solar power plants. OK, so that's definitely a large playground, so to say.

Chapter 5: Hydrogen

Warren:
I know you live in Portugal and your country has also announced that they have a hydrogen strategy, so clearly, with the renewables and production and hydrogen, the government sees a link. How are your customers facing that challenge? How are they stepping up to that?

Burnay:
So, there's a very interesting movement because where we see more activity around hydrogen is more on the oil and gas side. Oil and gas companies are shifting to renewables and some of these companies have just started increasing [their] wind portfolio, either buying from other companies or whatever merger and acquisition strategy they follow. But very interesting is the discussions around hydrogen from these companies that are actually studying how to restructure their existing pipelines, or their pipeline network, to be able to adopt hydrogen rather than just, you know, natural gas or other sources they used. This is more the trend that we see right now in our clients. Then the diversification of our existing clients in renewables are more on the diversification of storage or including solar and wind and biomass and biogas in the same platform, so there's a kind of two converging moves.

Chapter 6: Common pitfalls to avoid

Warren:
Yeah, I totally agree with you on that. I was actually just working on something this morning, and it's clear to me that you've got one group coming towards the center and the other group may be more center, but moving along. So what are the sort of pitfalls as people move into this whole new market? In some cases, they're entering totally new territory. They've never done this before, or they've only dabbled in it. What sort of things do you see people could learn from—maybe traditional renewable energy companies—as they enter into this? What kind of mistakes have people made in the past that you think they could avoid as they move into this?

Burnay:
That's something I’ve been thinking [about] a lot, to be honest, and while talking to clients I think one of the pitfalls is: do not reinvent a wheel. There are industry experts and technology experts that can support and drive safely throughout this journey. So, there's a certain tendency mostly for big companies to have it all in-sourced. But I think there are really accelerators that could be beneficial.

Another pitfall would be: establish solid grounds. We've been adopting a lot in our conversations internally within CGI this slogan, “Start small, think big.” And I really enjoy this slogan. I've been using it more and more often. I think start with data and grow from data, data governance, data quality to features and functionalities. I’ve seen many times incredible and really great requirements, for example, on predictive, and when people are asking for really edge technology. And then when you ask, “OK, but is there a solid ground, is there a solid structure regarding that acquisition and data monitoring?”, there is not so, of course. 

People are trying to implement—you know they are investing in innovation, and that's wonderful. But the truth is that you end up with a lot of losing points if you don't have a solid structure that you are actually building upon. So, you end up with a lot of initiatives, a lot of MVPs [minimum viable products] and a lot of POCs [proofs of concept]; but, at the end, [they] do not really drive value to the business.

Warren:
Yeah, I totally agree. I see a lot of people “accessorizing,” as one of our people says. They're putting a lot of things around it to say, “Look at all the things we're doing,” but these haven't been started with operational excellence, and [answering] “How am I going to run this?”, in mind upfront which, as you said, starts with the data. So, what happens later is they've got all these things, and they find out that they're not all that compatible or it's all over the place.

Chapter 7: Cloud enablement

Warren:
I think utilities have more data than they know what to do with. It's really sort of cleansing that. So, I think "data first" is very clever. Is that one of the things that drove you guys? I don't want this to be a sales pitch, but I know that you've done a lot of stuff in product development. Is that one of the things that's driven you to cloud and how you do things now differently in your solution? Is that sort of, you had that bad experience in the past, so you've changed things? Like how did you get to where you are with what you guys are doing?

Burnay:
Well, I think that we basically listened to the market, so we did not really have bad experiences, I think. 

Warren:
OK

Burnay:
You know when I started working in consultancy, I was not working in utilities by then, and everybody was talking about the “just-in-time.” Ideally, you should have to implement a just-in-time process for any good. And when I started working in utilities, I said, hey, this is just-in-time by definition. So, this is to tell what this is somehow in renewables.

When we started, we were working with a lot of on-premises solutions, but we were already building up the digitalization of operations OK so because we were basically building up the ecosystem with different renewable sources—different renewables, different wind manufacturers at the time or hydro turbine manufacturers and linking all these together to digitalize already the operation. When we started seeing all this movement to the cloud, there were a couple of advantages that immediately caught our attention. One is the pay-per-use principle. So, this is monetizing your benefits and monetizing your solution. This helps in the way of building a lot of flexibility in your initial setups and your solution so you wouldn't do that huge investment and license mode to build up a full infrastructure. You could move as you go forward.

The other topic that really caught our attention was, of course, all the machine learning and artificial intelligence capabilities. So that's when we basically started also discussing how to predict failures or how to get some insights on root cause analysis or how to predict performance flaws, for example. OK, so those were the immediate benefits that really made us start on the cloud. Then again, you know when you made the move to the cloud, then, of course, you are able to observe a lot of other advantages such as the scalability, which is totally different. In terms of our solution, we also used that movement to provide a lot more flexibility to the final user so that you can actually build up some features and functionalities on your own.

Warren:
OK, so they could make their own reports or do their own queries as they see fit.

Burnay:
Exactly. Define your KPIs, etc.

Chapter 8: Key takeaways

Warren:
Yeah, there's no substitute for hands-on because you see what's moving forward. So, just sort of heading this towards a wrap-up here. How do you see this taking forward in the future? You've got machine learning; you've got new technologies. You've mentioned looking at the supply chain from end to end. You mentioned the importance of data. How do you see this sort of happening if you had a crystal ball as people move into 2030 and 2050 to meet all their demands? How do you sort of see this fitting in?

Burnay:
So, I think that the industry is more and more requiring a holistic vision. This interconnection that I mentioned previously, you want to see how much production you want to forecast, or you want to be able to forecast how much production you'll be getting, the market prices you want to, of course, produce and also take decisions: should I sell, should I store, etc. This is clearly where the industry is heading.

Of course, all the hydrogen discussion, that's a very large one and there's certainly what I believe the future will bring and basically leveraging all this cloud and machine learning as technology building up more and more intelligence in all layers—data layer, functional layer, etc. That's also basically from our solution point of view where we want to evolve to build flexibility—building more intelligence in the several layers, working on the interconnections with all these different players within the ecosystem, and well, also the monetization of hydrogen, both on the battery side but also on the production side.

Warren:
And as a commodity itself as people trade it or ship it and move it about. We see that definitely in other regions, and we'll explore that in some other of these podcasts as we're doing more work in those spots.

So, I've got to say thank you for this great call. I really enjoyed this. I know we talk all the time, but actually, this was a nice forum to have your free thoughts flow, and I really appreciate it. Thank you very much.

Burnay:
Yep, thank you.