Regional Energy Ecosystem Undergoes Transformation
By Joe Anis, President and CEO of GE’s Power Services business in the Middle East and Africa
You can’t overstate the importance and impact of the US$ 5 trillion global energy ecosystem – the value chain that extends from the oil wellhead (or wind turbine) to the electrical socket in your wall. It comprises 6% of the world’s GDP, and it’s undergoing unprecedented transformation that is directly impacting this region.
Driving these changes are technological advances, growing environmental concerns, changing consumer behavior, new government priorities, a change in fuel availability and resource constraints.
GE has mapped out nine major transformations occurring across the energy ecosystem. They include shifts such as demand-side efficiency and management, distributed generation, the era of gas, and the water-energy nexus. But there are three shifts set to have a significant impact in this region: digitization, decarbonization and electrification.
Digitization – or the Industrial Internet as we call it, brings together a multitude of networked machines equipped with sensors that send reams of data to the cloud, where systems monitor, collect, exchange, analyze, and deliver valuable new insights to operators. These insights can then help drive smarter, faster business decisions for industrial companies, lower costs and high efficiency. GE has developed Predix, the world’s first cloud-based operating system for industry, as a platform for these software solutions.
To give a sense of the opportunity, right now electric utilities around the world are collecting 2 terabytes of data, but less than 2% of that data is being used today. With GE Industrial Internet solutions that tap into that data and add powerful analytics, we estimate a power plant could increase fuel efficiency 3% and output 2%, and cut unplanned downtime by 5% and operation and maintenance costs by 25%.
In response to that opportunity, the Saudi Electricity Company is partnering with GE to develop a Generation and Optimization Center to monitor and improve operations with a goal of reducing outage times by 60%. Another example of localized digitization is Qatar’s RasGas, which is now using GE Asset Performance Management solutions to improve availability, reduce unplanned downtime and move toward predictive maintenance.
The COP21 agreement in Paris is a global commitment toward decarbonization and has put the topic firmly on the national agenda of each and every country across our region. Interestingly, electricity and heat generation contribute 42% of man-made atmospheric CO2, followed by transportation (23%) and industry (19%). This presents a real opportunity for improvement. We believe that a combination of digitization and technology can have a major impact on these goals.
During the World Future Energy Summit 2017 in Abu Dhabi, we launched a co-authored whitepaper with Intelhighlighting that if just a handful of new digital solutions were scaled across industrial systems and global transportation networks, businesses could see US$ 81 billion/year in cost savings and reduce global CO2 emissions by up to 823 mt/year.
An example of the work we are doing locally to support this shift is a recent agreement whereby GE will help Emirates Global Aluminum (EGA) reduce NOx emissions by 10% over a 100-day period.
The Electrification of Things is the shift towards electrified systems – cars, planes, appliances, industrial processes – that can be more efficient when powered by electricity. This transformation will have a significant impact on the existing power generation capacity and infrastructure across the region.
Harsh environments, and remote and difficult-to-access locations, often in the mining, and oil and gas exploration and production sectors, find a cost advantage with electrification. Electrical systems can provide an advantage in that they are simpler and more reliable, and are witnessing a continued decline in technology costs.
Electrification also usually means lower costs and lower emissions. Consider that that combustion engines – in cars or diesel generators – have a 30% efficiency, while utility-grade gas turbines have an efficiency of up to 62% efficiency. Electrification also is being driven by relatively high carbon fuel costs. For example, the global rail sector spends about US$ 11 billion annually for fuel and forty percent of airline costs are spent on fuel.
At GE, we see Industrial Internet solutions setting a new template for the next wave of growth for our partners in the region. Through localization and partnership, we will continue to leverage Predix and our software capabilities to unleash greater efficiency, reliability, productivity and cost savings across the energy value chain.