Interview with Ditlev Engel, CEO of DNV GL Energy: “The Biggest Challenge is Integration” – Energy Collective

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The biggest challenge of the energy transition is the integration of renewable technologies into a digitalized interconnected energy system, according to Ditlev Engel, CEO of DNV GL Energy, one of the largest energy consultancies in the world. Technology is moving very fast, Engel says in an interview with Energy Post. Renewable energy growth has surpassed everyones expectations. Regulation and market design need to reflect this development.

Energy Post caught up with Ditlev Engel recently when he spoke at a solar conference in Brussels. “But I could just as well have spoken at a wind conference or grid conference”, he says. “The topic is the same everywhere. We need to increase the utilization of renewable energy. For this we need to transform the energy system. That in turn requires new regulation.”

“Can we build an industrial society on solar and wind power? Well, we are heading there”

As CEO of DNV GL’s energy business, Engel is in a good position to have an overview of the energy transition from a technology-neutral standpoint. DNV GL Energy – part of Norwegian-based DNV GL, one of the largest risk management providers in the world, with operations in more than 100 countries – employs 2,500 energy experts, who work in all parts of the energy value chain. “We have done 5500 solar projects”, says Engel, to explain why he is at a solar conference, “but we don’t pick winners. We are also involved in storage, wind, transmission, etcetera. We always take the independent view.”

Collaboration on all sides

In fact, according to Engel – who  worked for Danish wind turbine manufacturer Vestas before he joined DNV GL in 2016 – there is no silver bullet when it comes to the energy transition. “We need a combination of solutions. We need all forms of renewable energy, plus storage, efficiency, grid integration, smart grids. And we need collaboration on all sides. If countries pursue their own solutions, it will lead to suboptimal results.”

The two big trends that form the heart of the energy transition are, in Engel’s view, decarbonization and electrification. “Technology development is supporting both those trends. The acceleration of renewable energy has gone much faster than anyone would have believed possible ten years ago. We have seen a reduction of prices that has surprised everyone. Renewable energy scales very fast.”

“You need to integrate technological developments into your forecasting. You can’t rely on what happened in the past”

In some circles there still is some skepticism about the potential of renewables, but Engel brushes that aside. “Can we build an industrial society on solar and wind power? Well, we are heading there. I carry a Danish passport. We have the highest percentage of renewable energy in the world.”

The Danish success was partly made possible by the availability of large hydropower resources in Norway and Sweden, Engel acknowledges. That shows the importance of integrated markets and interconnections. “You can see how it all hangs together. Investment into grid connections and smart grids is just as important as investment in solar and wind itself.”

Breakthroughs

Rapid technological development is taking place across the energy spectrum, notes Engel. “In storage, for example, we see a steep decline in battery prices and an increase in home storage solutions. In Sweden they are now planning to build a gigafactory for battery production. Or look at what the oil companies are doing. Shell is investing in offshore wind. Total has bought a Belgian green power and services supplier.”

DNV GL itself is also active. In Arnhem, the Netherlands, it has its KEMA Laboratories, the world’s largest test centers for High-Power and High Voltage equipment. Recently it has expanded the labs with additional capacity for the emerging market of supergrids capable of bulk energy transport at 800kV. Tests for new components and standards are critical for reliable grids and to ensure successful integration of renewables into the energy system, says Engel. (See the article “DNV GL on risks of renewables” published in December 2016 in Energy Post.)

Asked about whether he sees technological breakthroughs on the horizon, Engel says: “The key issue in technological development is to remember that we live in a digitalized world. You cannot use analogue solutions in a digital world. We need to do things in different ways.”

DNV GLs Top 10 Energy Technology Trends

DNV GL’s annual Technology Outlook identifies the Top 10 technology trends that will together create a new power reality:

  1. The electrification of energy demand will increase overall energy efficiency and reliability. While the electrification of trains began a century ago, cars and trucks are now increasingly battery-powered. Electric heating is also driving efficiency increases.
  2. New materials in energy such as graphene in solar, hybrid solar cells and wide range bandgap semiconductors in power converters will increase the reliability, performance and efficiency of the next generation solar panels and electric grids.
  3. Digitalisation will lead to more, faster and better data, increased computing power and better connectivity of all elements in the power system. This will optimise the design, planning and operations of assets in wind, solar, transmission, distribution and the use of electricity in society.  Costs for maintenance of wind turbines and wind farms will be lower and demand response invitations, where customers can voluntarily reduce demand in peak moments, will be better-tuned to individual and changing consumer wishes.
  4. Wind: larger and smarter. Turbine sizes will continue to increase and include light, flexible blades and aerodynamic control devices. Second, aerodynamic control devices, innovations in transmission systems, new sensors and smart control systems, will ensure new turbines better utilise the available wind and react to the needs of the electricity grid.
  5. More than 30 developments in solar will drive down costs of solar PV up to 40% in the next ten years. The PV learning curve indicates that the module price decreases by over 20% for every doubling of capacity. By 2025 solar PV will be the cheapest form of electricity in many regions of the world.
  6. Electricity storage will be optimised for three electricity discharge durations: wholesale, system support and “behind the meter.” Technologies will include: chemical batteries for storing solar energy for consumers, technologies with high power ratings for system support at systems scale and smart software in batteries to enable optimal use of batteries.
  7. Bi-directional communications in demand response management will address changing customer circumstances and thus help overcome the major disadvantages of the two most common forms of demand response today. In one form, utilities directly control the program. In the other form, demand is adjusted automatically based on consumers reacting to price incentives.
  8. Smart energy producing buildings. A vision of a smart energy-producing house is one in which solar is the main source of energy. Adding devices that have some flexibility in their energy behavior, like battery electricity storage, heat pumps, air conditioning, and charging of electrical vehicles enables further optimization of energy use with smart self-learning thermostats.
  9. Self-thinking power grids. Grids will begin to manage themselves, and will include features allowing self-configuration to manage resilience and reduction losses, self-adjustment to address voltage variations and self-optimisation to mitigate disturbances.
  10. Hybrid grids. In order to accommodate the increasing share of renewable energy, electricity will need to be transmitted over ever-longer distances. High Voltage Direct Current is the solution of lowest cost in this regard. Hybrid grids, which the existing AC grid will evolve toward, is defined as the addition of ever-more HVDC connections within and between AC power systems. In this way, grids are evolving into combinations of AC and highly controllable DC systems.

Digitalization is indispensable to the decarbonization and electrification of the energy system. “At DNV GL, we see ourselves perhaps most of all as data custodians. The energy system of the future – with distributed generation, storage, smart grids, demand response, the Internet of Things – will be built around data.”

So what kind of surprises may we still be in for? “I don’t think there will be surprises in the sense that things will happen that we have not thought about yet. We do think about what can happen. The point is that you need to integrate technological developments into your forecasting. You can’t rely on what happened in the past.”

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