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© OECD/IEA 2017
Digitalisation and Energy: a spotlight
on industry
IEA Workshop on Energy Management Systems and Digital Technologies
Araceli Fernandez, 12 December 2017
IEA
© OECD/IEA 2017
Digital technologies are everywhere….
© OECD/IEA 2017
Which line shows the cost decline of sensors?
0
20
40
60
80
100
2008 2010 2012 2014 2016
2008 = 100
© OECD/IEA 2017
Drivers of digitalization: data, analytics, and connectivity
Since 2008, data collection, storage, and transmission costs have declined by over 90%
Sources: Based on BNEF (2017), Utilities, Smart Thermostats and the Connected Home Opportunity; Holdowsky et al. (2015), Inside the Internet of Things; IEA (2017), Renewables; Tracking Clean Energy
Progress; World Energy Investment; Navigant Research (2017), Market data: Demand Response. Global Capacity, Sites, Spending and Revenue Forecasts.
0
20
40
60
80
100
2008 2010 2012 2014 2016
2008 = 100
EV batteries
Utility-scale PV
Data storage
Internet bandwidth
Sensors
© OECD/IEA 2017
Digital analytics enables the fourth industrial revolution
1784 1870 1969 TODAY
© OECD/IEA 2017
Digitalization in industry can take diverse forms
Digital technologies can enable sustainability improvements within industrial plants and beyond the
plant fence
© OECD/IEA 2017
Industry has a long history of using digital technologies
Improving productivity and ensuring safety were the main initial drivers of digitalization in industry,
which facilitated process optimisation and energy savings from coupling EMS with digital technologies.
© OECD/IEA 2017
Energy savings (left axis) Cumulative investment cost (right axis)
Further energy savings remain from improving process controls in industrial
processes
Improvements to industrial process controls produce substantial energy and associated cost savings
Energy efficiency measures relating to improved process control in small to medium US manufacturers
Source: IAC database
0
100
200
300
400
0
100
200
300
400
1987 1991 1995 1999 2003 2007 2011 2015
US
D (
2010
) m
illio
n
Cum
ulat
ive
savi
ngs
US
D (
2010
) m
illio
ns
© OECD/IEA 2017
Illustrative case study: aircraft component light-weighting
The use of 3D printed components in commercial aircraft could lead to significant material
demand and fuel savings
0
5 000
10 000
15 000
20 000
25 000
Conventional
components
AM components
Tons
Metal demand
in 2050
Aluminium alloys Nickel alloys Titanium alloys Fuel savings
0
250
500
750
1 000
1 250
1 500
1 750
Slow
adoption
Mid-range
adoption
Rapid
adoption
Million GJ
Cumulative aircraft fuel savings
to 2050
Source: Huang et al. (2016)
© OECD/IEA 2017
Digital plant twins
Virtual feasibility and durability testing of real process plants can accelerate the innovation cycle
by saving time and resources
© OECD/IEA 2017
Connecting supply value chains
Linear supply value chains are evolving into complex, dynamic and connected webs facilitating circular
economy concepts.
© OECD/IEA 2017
Pre-digital energy systems are defined by unidirectional flows and distinct roles,
The digital transformation of the energy system
© OECD/IEA 2017
Pre-digital energy systems are defined by unidirectional flows and distinct roles,
digital technologies enable a multi-directional and highly integrated energy system
The digital transformation of the energy system
© OECD/IEA 2017
Providing system flexibility from the demand side
Digitally-enabled demand response shifts electricity consumption to those hours with a surplus of supply. Demand response programs – in buildings, industry and transport - could provide 185 GW of flexibility,
and avoid USD 270 billion of investment in new electricity infrastructure.
© OECD/IEA 2017
Building digital resilience
• To date, cyber disruptions to energy have been small
• But cyber-attacks are become easier and cheaper – malware, ransomware,
phishing / whaling, botnets
• Digitalization also increases the “cyber attack surface” of energy systems
• Full prevention is impossible, but impact can be limited:
- Raised awareness, cyber hygiene, standard setting and staff training
- Coordinated and proactive preparation by companies and governments
- Design digital resilience in technologies and systems
• International efforts can help raise awareness and share best practices
© OECD/IEA 2017
1. Build digital expertise within their staff.
2. Ensure appropriate access to timely, robust,
and verifiable data.
3. Build flexibility into policies to accommodate
new technologies and developments.
4. Experiment, including through “learning by
doing” pilot projects.
5. Participate in broader inter-agency
discussions on digitalization.
6. Focus on the broader, overall system benefits.
7. Monitor the energy impacts of digitalization
on overall energy demand.
8. Incorporate digital resilience by design into
research, development and product
manufacturing.
9. Provide a level playing field to allow a variety
of companies to compete and serve
consumers better.
10. Learn from others, including both positive
case studies as well as more cautionary tales.
1. Build digital expertise within their staff.
2. Ensure appropriate access to timely, robust,
and verifiable data.
3. Build flexibility into policies to accommodate
new technologies and developments.
4. Experiment, including through “learning by
doing” pilot projects.
5. Participate in broader inter-agency
discussions on digitalization.
6. Focus on the broader, overall system benefits.
7. Monitor the energy impacts of digitalization
on overall energy demand.
8. Incorporate digital resilience by design into
research, development and product
manufacturing.
9. Provide a level playing field to allow a variety
of companies to compete and serve
consumers better.
10. Learn from others, including both positive
case studies as well as more cautionary tales.
1. Build digital expertise within their staff.
2. Ensure appropriate access to timely, robust,
and verifiable data.
3. Build flexibility into policies to
accommodate new technologies and
developments.
4. Experiment, including through “learning
by doing” pilot projects.
5. Participate in broader inter-agency
discussions on digitalization.
6. Focus on the broader, overall system benefits.
7. Monitor the energy impacts of digitalization
on overall energy demand.
8. Incorporate digital resilience by design into
research, development and product
manufacturing.
9. Provide a level playing field to allow a variety
of companies to compete and serve
consumers better.
10. Learn from others, including both positive
case studies as well as more cautionary tales.
1. Build digital expertise within their staff.
2. Ensure appropriate access to timely, robust,
and verifiable data.
3. Build flexibility into policies to accommodate
new technologies and developments.
4. Experiment, including through “learning by
doing” pilot projects.
5. Participate in broader inter-agency
discussions on digitalization.
6. Focus on the broader, overall system benefits.
7. Monitor the energy impacts of
digitalization on overall energy demand.
8. Incorporate digital resilience by design into
research, development and product
manufacturing.
9. Provide a level playing field to allow a variety
of companies to compete and serve
consumers better.
10. Learn from others, including both positive
case studies as well as more cautionary tales.
1. Build digital expertise within their staff.
2. Ensure appropriate access to timely, robust,
and verifiable data.
3. Build flexibility into policies to accommodate
new technologies and developments.
4. Experiment, including through “learning by
doing” pilot projects.
5. Participate in broader inter-agency
discussions on digitalization.
6. Focus on the broader, overall system benefits.
7. Monitor the energy impacts of digitalization
on overall energy demand.
8. Incorporate digital resilience by design
into research, development and product
manufacturing.
9. Provide a level playing field to allow a variety
of companies to compete and serve
consumers better.
10. Learn from others, including both positive
case studies as well as more cautionary tales.
1. Build digital expertise within their staff.
2. Ensure appropriate access to timely, robust,
and verifiable data.
3. Build flexibility into policies to accommodate
new technologies and developments.
4. Experiment, including through “learning by
doing” pilot projects.
5. Participate in broader inter-agency
discussions on digitalization.
6. Focus on the broader, overall system benefits.
7. Monitor the energy impacts of
digitalization on overall energy demand.
8. Incorporate digital resilience by design into
research, development and product
manufacturing.
9. Provide a level playing field to allow a variety
of companies to compete and serve
consumers better.
10. Learn from others, including both positive
case studies as well as more cautionary tales.
No-regrets policy recommendations
