By: Theadora Cericos Malvar, Content Writer
Energy is a crucial component of economic development. It is essential in offering transportation, heat, and power to our homes, and manufacturing the goods and services that drive the global economy. Therefore, there is no getting past the fact that energy is necessary.
The Energy Needs are Rising
It is also critical to remember that our global population and energy needs are increasing, and these two occurrences heavily impact our energy markets and consumption.
The United Nations estimates that the world's population will increase by about 2 billion in the next 30 years, from 7.7 billion in 2020 to 9.7 billion in 2050. Energy resources used for power, transportation, heating, manufacturing, and other purposes will be significantly strained.
We now live in a world where commodities are in great demand and global supply systems are already overstretched as we consider the energy future starting in 2021. Because of this, we are acutely aware that the foundation of the world economy is made up of raw resources and commodities. While we frequently concentrate on energy efficiency and cutting back on energy use in the most developed economies, we often overlook that some low-income emerging economies still experience energy poverty. This is significant since those low-income, developing economies will account for around 50% of the global population growth (1 billion people) during the next 30 years. For practically every type of energy, these dynamics support a strong demand projection for the middle of the century.
The Need for Transition and Supply
Although an increase in the world's energy consumption in the coming decades is guaranteed, switching from fossil fuels to renewable energy is currently receiving a lot of attention. This significant transition will likely take decades. Meanwhile, the incredibly high power and transportation fuel demand levels are also expected to rise. The need for petroleum fuels is not projected to peak for another decade or two, despite a rapid increase in the production and use of electric vehicles. Additionally, there is a growing value proposition and operational urgency for maximizing the impact of hydrocarbons, which are exploited and constitute the world's primary energy source. This is due to the demand for both cost and carbon efficiency. Additionally, this is not just relevant to the gasoline business. It may also be essential for the production of electricity.
Even with countries like the United States transitioning to renewables in the long run, hydrocarbons are still being used in the short term. Here, the stop-gap solution of switching from coal-fired power generation to natural gas is being used to address the shortcomings in adopting renewables. Natural gas can replace coal in the intermediate power stage, cutting carbon emissions by 50%. Because of it, it becomes a pretty easy and sure win for some power producers. The problem is that because natural gas is such an excellent intermediate fuel on the road to renewable energy, demand for it is multiplying. With such a strong carbon attraction, there is also the need to stretch those natgas molecules further than before.
Technology may be a vital operational value-add to stretch those molecules in these circumstances of high demand but constrained resources by feeding a world hungry for energy but also eager for hydrocarbon and emissions efficiency.
Where Technology Stands
Technology is now viewed as a lever of opportunity that establishes value for energy, hydrocarbon, and power markets. Two of the world's biggest and most successful technological adoption tales are smart grid and smart meter technology, both of which are powered by the Internet of Things (IoT). And sooner or later, the need for IoT energy management will expand for this kind of rollout and adoption across both advanced and especially developing economies. Capitalizing on energy-related IoT innovation will be especially important for low-income developing economies with rapidly growing populations. While smart grids and smart meters have already had a significant impact and garnered substantial media attention, there are a plethora of other technologies that can be useful in the national and international effort to maximize and improve the operational efficiency of energy companies as well as the use of hydrocarbons.
At the most granular level, energy efficiency and power consumption in homes will be increased by smart homes, smart appliances, efficient HVAX systems, and other factors. In the meantime, power grid operations and load serving could be leveled out by an increase in residential solar power generation and battery technology. Of course, power dispatch could be improved by deploying more potent artificial intelligence (AI) and quantum computing to enhance grid efficiency and minimize electrical transmission losses.
In oil and gas areas, where AI and quantum computing will significantly impact the efficiency of oil and gas extraction operations, data also has the potential to be a high-value efficiency lever. Of course, there is also significant potential in physical technology. With the incredible advancements in robotics, it doesn't seem too far off that the growing usage of automated equipment and robots in oil and gas extraction and asset maintenance will significantly streamline operations.
While some of these technologies, like quantum computing, will take longer to develop, they could provide electricity markets, as well as exploration and production, step-change improvements in efficiency.
The Challenges Ahead
Our planet has dwindling hydrocarbon reserves and increasing demand. Fortunately, technology can help increase productivity and, in the case of remote labor, can even decrease the need for petroleum-based fuels, or at the very least a reduction in that demand as we advance. However, there are some dangers in store. Working from home requires internet connectivity as dependable as commercial office buildings. Additionally, having a dispersed workforce significantly expands company operations' technological and operational attack surface, making cybersecurity - and more particularly, energy cybersecurity needs - a higher priority. Even if the personnel are not dispersed, cybersecurity risks for IPPs are likely to grow in importance simply because electricity security is crucial for maintaining economic momentum and crosses the line into a national security danger.
In conclusion, technology offers enormous prospects to increase the effectiveness of energy extraction, consumption, and operations, from energy IoT to remote work. But we also need to be ready to make the necessary investments to profit from the potential gains and deal with any sacrifices or difficulties that come along with them.
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