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Telenor’s Digital Outlook 2030

TNCC came across an interesting topic from one of our premium members, Telenor. The energy transition is underway. By 2030, power will be sourced from entirely new places and in radically different ways in much of the world. Telenor’s Digital Outlook 2030 looks at the role of renewables and how technology will help ensure a stable supply of power in the next decade.

Telenor Research: Transitioning our energy system is the key and the challenge – By Bjørn Taale Sandberg, SVP and Head of Telenor Research.

Stopping global warming will take an all-out effort in three areas: optimising ‘everything’ to reduce energy consumption, cleaning up by removing carbon from the atmosphere, and transitioning the energy system. The first all-out effort, optimisation, is about recycling our clothes and furniture on digital marketplaces, platooning trucks using 5G low-latency communications along motorways, and going for veggie instead of beef when ordering your burgers, to name just three ways to change.

Next, removing carbon from the atmosphere and sequestering it needs to happen, but that takes energy, and that energy needs to be carbon neutral. So, we are left with transitioning the energy system as the big one, the challenge we urgently need to address. In Norway, we are blessed with ample hydro power, and the government is investing in offshore wind power development. At the same time, we are building power transmission cables that will make us an integral part of the European energy market. This can mean less coal burned in Europe if Norway runs a surplus, but not otherwise, so offshore wind makes sense.

An oft quoted challenge with renewables is the variability or ‘unpredictability’ of production. The wind needs to blow, or the sun must shine. That means that the energy system needs the ability to generate a ‘base load’ independently of the time of day or weather. In Norway, this will be our hydro plants – and our links to Europe. The more integrated and the smarter the system is, the better we will be able to optimise when to tap the battery – our reservoirs – and when to preserve water levels. With the necessary cables in place and a functioning energy market, we should be set. At least, here in Norway.

When it comes to energy, Norway is the outlier. We are not representative, the exception rather than the rule so to speak. Most countries lack a ‘clean battery’ that can balance the intermittency of renewables. A key question for the world to address is how to solve this to truly make a transition. The tools we have today may not be enough. We could deploy nuclear power using existing uranium fission reactor designs, but this is still politically problematic. We could theoretically build massive solar and wind plants in countries where these are abundant; we could build reservoirs and other batteries to keep energy for a cloudy day and distribute across time zones using fat cables. But that is a massive engineering challenge and a costly solution, not least because much of the generated energy would be lost in translation and distribution.

Research and development (R&D) are needed to get us out of the woods. One tantalising solution is fusion power. The ITER project in Southern France is planning for the first fusion in 2025. When in full operation, it will generate 500 megawatts of power from 50 MW of input. It burns tritium and deuterium (heavy water) and produces no radioactive waste products. If successful, this could be the long-term answer, but it will not be in time for carbon neutrality in 2050. Until then, we will need technologies to optimise everything and use every smart trick in the book to create and distribute carbon neutral energy. I believe by 2030 we will be well on our way, testing out various energy solutions around the world and figuring out how technology can make them work in tandems. The future of energy is a mixed and varied picture, and it is difficult to envision a single solution that prevails over all the others. But the momentum is there, and I honestly believe that our appetites for veggie burgers and the like are finally growing.

Accelerating into the ‘Age of Renewables’ – By Mari Grooss Viddal, Head of Global Drivers Strategy Unit, Statkraft.

Over the past ten years, global energy markets have gone through a massive shift from fossil fuels to renewable energy. We believe this transition will further accelerate over the next decade, making 2030 a year in which renewable energy plays a much larger role than it does today.

One of the most important drivers of this transition is a huge development and cost decline within renewable technologies. We expect a substantial growth in solar photovoltaic (PV) capacity, with cost reductions driven by the gradual development of solar technology. Wind power will also take on a much larger role than it currently holds. The development is driven by cost reductions, primarily due to strong competition and standardisation of the most important components. We also expect a number of improvements in design, operation, and maintenance, and we see digitalisation, the use of artificial intelligence and algorithms play a central role in optimising production and consumption. In Statkraft’s optimistic but realistic Low Emissions Scenario, we estimate that wind and solar power will grow four and six times from today, respectively, and cover almost 30 per cent of the world’s electricity in 2030.

Over the next decade and onwards, electrification is the solution that will dominate the energy system, and renewable power will play an increasingly large role in decarbonising the industry, buildings, and transport sectors. Demand for electricity will increase by almost 30 per cent towards 2030, and this growth will be covered by renewables. With more variable energy sources in the system (power will be produced when the sun shines or the wind blows), flexibility challenges will arise on the production side. However, we expect the power demand to become smarter and more flexible – for instance, with electric vehicles that can charge whenever production is high and prices are low, and with well-connected and mixed power markets able to handle these high shares of variable production.

In 2030, we believe green hydrogen and green ammonia will have taken on an important role in the industry and transport sectors, in cases where direct use of electricity is challenging. By then, cost reductions in renewable electricity and electrolysers will have enabled green hydrogen to compete with fossil hydrogen in several applications. Energy consumption and generation represent 75 per cent of the world’s greenhouse gas emissions, and so, a transition to renewables will play a crucial role for countries as they work towards the goals of the Paris Agreement.

Why hydrogen attractiveness is dependent on both technology development and predictable policy – By Ragnhild Stokholm, Sustainability Manager, Aker Clean Hydrogen.

Right now, we are in the early phase of the clean hydrogen development. Not more than 5 out of 70 million tons of hydrogen produced yearly is clean. In 2030, we expect that this has changed completely. At this stage, we expect global production of clean hydrogen to reach approximately 60 million tons, and clean hydrogen is playing a crucial role in reducing CO2-emissions in several parts of our society, replacing natural gas, coal and more carbon intensive alternatives. At that point in time, clean hydrogen is increasingly used in many industries, for power production and district heating. In addition, we expect to see clean Hydrogen applied as green fuel in ferries, shipping as well as heavy transportation.

To do this – to bring hydrogen to the mainstream – we need to improve both production- storage and distribution cost, making it an attractive alternative to fossil fuels. With the rapidly increasing pace we see in hydrogen, a holistic approach is crucial to succeed. We need to cut cost and standardise through the whole value chain by digitalisation for both green and blue hydrogen. Operational cost will be cut with the use of machine learning. Close cooperation and technology development around the whole value chain is crucial in improving the distribution to end user. For green hydrogen, the biggest driver for falling cost and lower risk exposure is a quicker decline in renewables costs than previously expected. For blue hydrogen, we need to have efficient carbon capture management and market.

Unfortunately, this is not enough. Going forward, hydrogen companies and buyers/offtakers face a high-risk exposure when doing investments because of a difficult chicken and egg dilemma related to supply and demand. It is hard to invest and fund the supply and infrastructure, when there is not enough demand, but there will not be demand before end users feel sufficiently secured that there will be supply and availability. It is of course critical that CO2-prices continue upwards, in order to intensify the changes in the market behaviour.

Long term predictability around the policy framework is, in this context critical, as well as an internationally alignment in the frame conditions. Having a predictable policy and investor climate that lowers this risk is crucial for the industry to bloom. We must ensure payback for those who are willing to take the leap.

Energy will power a healthy planet in 2030 – By Petter Støa, Vice President Research, SINTEF Energy.

Energy in 2030 will still be in a transition towards 2050 when net zero emissions of climate gasses ensure a temperature rise below 1.5 degrees. A green transition is truly an energy transition and requires a complete rebuilding of the whole energy system, involving production, transmission, distribution, and use of energy.

According to the EU, we are facing a twin challenge: climate change and digitalisation. The first a challenge to be solved, the second a powerful enabler but also a global competition. Due to its large size, cost, and importance as an infrastructure, the transition takes time and must be well on its way by 2030, with many of the future features in place at that time. Many scenarios have been made to get a hold of what needs to be done and how to do it. Our sketch of what comes is as follows:

Hydrogen infrastructures at both local and transnational levels will form the main backbone of the energy supply system together with the power grid to support a distribution and coordination of emission free energy carriers and provide secure deliveries. The backbone will support flexibility for users to optimally use local energy resources with a more central large scale as a back-up. Digital technologies are a necessity to make this happen. The energy system is the world’s largest online process, matching use with production at every instant in time. Digital sensing, control, and communications will support the possibility for consumers to buy, sell, or store locally produced energy with neighbours, power companies, or industries.

Wind and solar will be the prime sources of power. Electrification is the prime effort, with hydrogen filling in where this is hard to do. Coal and oil will be out, but gas will still be used in areas where electrification is hard. Hydrogen from renewable energy resources will dominate in 2050, but hydrogen from gas with carbon capture and storage will also be used in the transition phase while renewable capacities expand. Secure nuclear power is still a future option but will not be available by 2030.

In households and industry, the use of energy will be highly automated, adjusting to user needs and handling resources optimally based on the customer’s preferred sustainability settings. Mobility will be mainly electric, with wireless charging and the vehicle’s storage device integrated into the energy system. Digital technologies will be everywhere. Not just in the system itself, but since energy is closely tied to user activity, all data related to user behaviour is of interest both in the design of products and services provided by energy providers. To make this a reality, cyber security and digital trust between individuals, companies, and authorities are necessary.

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