Power of digitalization: How better use of data is helping drive the energy transition

The modern world generates huge quantities of data and, if subjected to the right analysis, this can deliver crucial insights into business processes, technological development and societal needs. Meeting commitments on carbon neutrality while addressing the rising global demand for energy requires new technologies, new business models and improved collaboration. Digital technology can play a key role in helping to accelerate the energy transition.

An analysis by Accenture, in collaboration with the World Economic Forum, states that “digital technologies, if scaled across industries, could deliver up to 20% of the 2050 reduction needed to hit the International Energy Agency net-zero trajectories in the energy, materials and mobility industries”.

Digitalization is helping to drive the energy transition in three ways. First, by helping to make existing operations more effective and efficient, and improving mechanisms to monitor and track emissions. Second, by helping to accelerate the design and operate processes that lead to new tools and less carbon-intensive methods. Third, by enabling new business models with economic incentives to help accelerate the transition with more effective collaboration and better management of the diverse energy mix that is emerging as the world moves away from fossil fuels.

At Shell, digital technologies are being applied across a range of areas, from the development of biofuels and systems for the hydrogen economy, to electric mobility and management of renewable power generating systems.

Aggregated data sets can be used to apply AI to existing operations to help reduce emissions. For example, Shell used AI to modify operations at an existing LNG plant and proved it could reduce annual emissions by about 130,000 tons for a single train of process units, when operating at full capacity. That is equivalent to taking 57,000 European vehicles off the road. AI is also helping to reduce emissions associated with shipping. By using historic data from our fleet, we were able to develop optimisation software that helps drive efficiency of LNG vessels, which in turn drive emissions down by up to 7%.

But the world will not transition to a net-zero emissions future through incremental improvements alone; we must also consider the fundamentals of design. This means redesigning equipment and processes from an energy and emissions perspective, and that’s why we are working with industry partners to develop next-generation facilities that will help reduce emissions at a systemic level.

For example, digital tools are guiding research into the electrification of ethane cracker plants, which perform the first step in the process of transforming ethane into plastics. We have just launched a pilot facility at our research centre in Amsterdam to test the new system. If successful, this electrification design could reduce the operational carbon dioxide emissions for each cracker unit by as much as 350,000 tons per year.

Investments in technology are helping to accelerate the development of low-carbon fuels and other products. For example, we use AI to optimise the charging of electric vehicles. Our AI-powered smart charging algorithm helps to maintain a stable and balanced power grid by spreading charging demand, also helping to enable customers to charge at a lower cost. This aggregation of power demand makes it possible for the system to maximise the use of renewable energies when they are available.

The emerging hydrogen economy is expected to make a substantial contribution to decarbonisation and here, again, digitalization is a key enabler. Data-driven simulation combined with physics-based models helps us to optimise traditional experimentation. We are using modelling capabilities to design new containers to help improve the safe storage and transport of hydrogen. The aim is to increase the safety of operations and enable more widespread adoption of hydrogen as an energy vector.

Traditional power systems generate electricity centrally and distribute this to numerous business and domestic consumers. The increased availability of renewables power sources is leading to a more complex, distributed energy system where consumers can also be small-scale generators. This poses fresh challenges relating to management of local microgrids, predicting demand, and ensuring adequate energy storage and grid capacity. We are now working very closely with key collaborators and consumers to understand and model how these new systems will meet customer needs and how we should operate them for maximum efficiency and reliability.

Another requirement of this new energy system is to increase the traceability of energy products with certifiable information about their carbon footprints. For example, we recently launched a blockchain platform called Avelia which provides a book-and-claim system for Sustainable Aviation Fuel (SAF). Avelia connects airlines and businesses from all over the world. We aim to create a viable and sustainable way for corporations to contribute to reducing the cost of SAF, resulting in increased demand signals to help structurally scale SAF production.

The energy transition is being driven by data. A recent report estimates that “bringing digital technologies to scale could reduce emissions by up to 20% by 2050 in the three highest-emitting sectors: energy, materials and mobility”. Digital technologies such as machine learning, artificial intelligence and advanced computational science are already helping to deliver emission reduction improvements. At Shell we have learned three key lessons:

1. New digital technology is a key enabler for the energy transition, but it must be combined with senior leadership commitment in order to help accelerate change and deliver business value and bring employee along.

2. Collaboration is central to a successful digital culture, in which key collaborators from different sectors contribute varied technical capabilities, knowledge and resources.

3. Future business models will require open standards that can be readily shared across large commercial ecosystems.

Digital technology is a crucial part of our drive for decarbonisation and is creating opportunities across all business areas. The technology is important, but a large part of the challenge is about cultural transformation. There are two things that we must do simultaneously to accelerate the transition. The first is to make changes faster than we have ever done before, while maintaining safe and secure operations. The second is to work in effective, open collaborations to build and participate in a change movement that goes beyond the boundaries of individual organisations, a movement that is focused on helping to truly transform the global energy system.