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By Christina Shim, Head of Sustainability Software, IBM Late last year at the UN climate […]]
Guest Post – From Solar to Software: The Second Half of the Energy Transition – ESG Today
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Energy Transition/ ESG Tools, Services/ Guest Posts
Guest Post – From Solar to Software: The Second Half of the Energy Transition
ESG Today Guest Post
April 17, 2024
By Christina Shim, Head of Sustainability Software, IBM
Late last year at the UN climate change conference in Dubai, one of the facts most repeated around dining tables, on stages, and over cocktails was that solar is now the cheapest form of electricity in the majority of countries. Of course, there were many attendees quick to object; solar is not the cheapest option in all countries, or for all projects. Nevertheless, it is undeniable that technology is enjoying a striking trend in access and affordability.
It was not long ago that solar—first explained in 1905 by a 26-year-old Albert Einstein—was primarily used to power key appliances in remote villages, satellites in outer space, and not much else. Then, from 2000 to 2022 the price of panels fell by 96 percent. In 2023 alone, prices fell again by about half. Most projections show that trend continuing. Now, more than a century since Einstein laid out the principles, a range of societal, technological, and regulatory tailwinds are boosting optimism that an increasingly clean electric future is near.
This is important for all of us, including businesses. It is not a matter of environmentalism or values, but of immediate risks and costs. In the U.S., extreme weather disasters cost over $150 billion last year. Across the country, the immediate consequences of climate change wreaked havoc on ski resorts, farms, fisheries, and more, plus the local economies they operate in. In fact, Stanford researchers found that wildfire smoke alone reduce U.S. earnings by over $100 billion per year.
Yet like often happens, one solution will invite other new challenges. The IEA reported that over 26 million electric cars were on the road in 2022, up 60 percent from 2021 and more than 5 times the stock in 2018. If and when those vehicles are treated as energy banks, the grid will need to consider each as a decentralized power source, and make extraordinarily complicated decisions about when it is or is not worth drawing on them. Also, in 2023, for the second year running in the U.S., heat pumps outsold gas furnaces. This reflects great progress in energy efficiency, but it also means that each winter more and more Americans will rely on a perfectly functioning grid for their basic warmth.
Software, automation, and energy ingenuity
As electrification continues, electricity demand grows, and clean but intermittent fuel sources like solar and wind become more prevalent, something will have to help manage the new level of complexity. That something is software. And it is critical that it ramps up apace with our clean energy usage, and helps utilities, businesses, and society get the most out of the transition.
For utilities, new software will help automate grid operations, enable informed “load balancing” decisions, and minimize downtime with predictive maintenance. Much of this is already happening, but will become even more valuable as grid complexity increases. And it will need to happen, because at certain levels of complexity there is no manual alternative.
Data from the grid can also be combined with satellite and weather data, which allows improved forecasts for wind and solar energy and also improved understanding of how electricity demand may change among customers based on temperature, wind, day of the week, and more. These data-driven insights can help stabilize grids and provide forewarning on when back-up power will be needed. Satellite data can also help utilities manage threats to pipelines, power lines, and other energy infrastructure, whether that comes from encroaching vegetation, potential floods, or incoming storms.
Software will also continue to underpin the so-called fifth fuel—energy efficiency, or “energy ingenuity”—for all different types of organizations. Some of the same tools that help utilities manage their grids can help other organizations manage various assets. For example, just by consolidating data from 10 systems, one company was able gain enough insight to slash energy intensity by 52 percent across its portfolio. Another example is Australia’s rail system, which use a predictive maintenance model that has used software to focus on reducing energy consumption while also increasing train reliability by 51 percent. These sorts of software can enable smart scheduling and data-driven maintenance that reduces travel time by technicians to only when it is needed. That spares the technician wasted time, spares the world pointless energy use and emissions, and increases uptime of whatever he or she is working on.
Eventually, versions of these software tools will likely help people in their own homes. If you picture an electric vehicle, an in-home battery, a small solar array, a dryer, a heat pump, and more, it is easy to see how software could navigate some of the complex questions that arise. When is the best time to run the dryer? What should the thermostat be adjusted to based on both weather and energy costs? Is it cheaper and wiser to draw from the grid or the EV right now? If the question merits human input, there would be an app for that.
An invisible but critical partner
Most weeks, there are a number of inspiring examples of progress in technology, sustainability, and engineering in the news. These projects are often large, exciting, and easy to visualize. They replace something in your home, or sit atop a ridgeline spinning their blades.
Software is different. It is less visual. It often enables other systems, or secures incremental gains rather than achieving something whole. But if the future is going to be a clean, efficient, and electric one, software will be what allows these increasingly complex systems to work together, and to do so as efficiently as possible—sometimes unprecedentedly so. AI, for example, is already unlocking enormous value from existing data, and that will only accelerate with further innovation and additional data.
As the energy transition continues, it will be critical for utilities, governments, and businesses of all kinds to match investment in bold, new physical infrastructure with equivalent investments in software. Though less visible, it will be—and already is—an incredibly important part of any electrified future.
ESG Today Guest Post
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