The tech revolution producing greener power

Renewables are on the rise and that’s largely thanks to the breakthrough technologies helping to make them more efficient and affordable. BP’s Alternative Energy business is nurturing a range of these advances to boost its production of clean power even further, as chief executive Dev Sanyal explains…

“If you want to build a sound business, you have to create a product that customers want, but you also have to create one that they can afford.” It’s a simple but profound statement from BP’s head of Alternative Energy, Dev Sanyal. And yet, for many years, affordability was the Achilles heel of renewable energy. Significant government subsidies have long been essential to bring the costs of producing power from wind, solar and biofuels in line with those of using hydrocarbons, which have been producing more than 80% of the world’s energy for decades.

But, times are changing. In recent years, the percentage of world power supplied by renewable sources has risen remarkably. The 17% growth recorded in 2017 was significantly higher than the 10-year average and the largest incremental increase on record, according to BP’s Statistical Review of World Energy. This trend is set to continue, with BP’s latest Energy Outlook report predicting that renewables’ share in the global power sector will increase to around 30% by 2040, as shown in the chart, below.

Primary energy demand – fuel

Billion toe

While stronger government subsidies have played a role, much of this growth has been accelerated by technological advances that have driven down costs. The cost of solar electricity has plunged by 80%, with the cost of photovoltaics (solar panels) falling faster than anticipated. As a consequence, BP’s forward-looking analysis – its Energy Outlook – suggests solar energy will become widely competitive with other sources by the mid-2020s, a full decade earlier than previously expected, and is likely to generate one-third of the world’s total renewable power by 2035.

Wind costs have also fallen. Technological development is boosting the size and productivity of turbines, making them more powerful. The increased diameter of the rotor blades enables them to sweep larger areas, and improved technology better regulates the pitch of the blades, thus harvesting more wind power than ever before. As a consequence of these and other advances, onshore wind could become one of the most economical sources of electricity for many regions by 2050, BP’s Technology Outlook suggests.

All of this matters because the world is going to need much more energy over the coming decades to improve the quality of life for billions of people. Some 1.1 billion still don’t have access to electricity and unsafe supply is thought to shorten the lives of around 2.8 million through indoor air pollution caused by cooking with smoky fuel sources such as kerosene, wood, charcoal and dung. Meanwhile, global demand for energy is expected to rise by a third in the next 20 years as a consequence of population and economic growth. 

Sanyal sees the role of Alternative Energy as helping BP to advance the energy transition – helping to solve the dual challenge of supplying more energy with fewer emissions. You can only do this, he suggests, by learning lessons from what he calls ‘the playbook of the past’. 

Part of the answer, says Sanyal, lies in asset reliability and here, again, technology is playing a crucial role. “When I first became CEO of AE three years ago, someone told me that our wind turbines would only ever reach 91% of their maximum capacity.”

At the time, BP’s turbines were operating at a level significantly below this. Today, that figure is closer to 95%. “We were constrained by two things,” says Sanyal. “Our experience of the past and our imagination. We’ve been providing energy for more than a century and we know that technology can change everything.” 

One of technology’s biggest impacts can be seen in BP’s wind energy business. Its 11 wind farms across the US have been fitted with the latest in monitoring technology that now captures almost 600 million data points daily, with dramatic impact. This data is helping BP to reduce unplanned maintenance and improve plant availability. 

Power mix in 2040 depending on technical progress

*Depreciation of existing thermal power stations

“We’ve worked in partnership with analytics experts ONYX InSight to scrutinize the data that we receive from our farms,” says Sanyal. “We can literally assess every single wind turbine in our portfolio and look for ways to boost efficiency and, when needed, take preventative measures. First, you need to have the data, but it’s not enough just to gather it – we need to understand it. And that’s what’s driving our reliability figures. By understanding what’s happening, we can now foresee any problems, which means downtime is limited and, by consequence, we get the most energy out of every single asset.”

Meanwhile, in a world first, BP’s Clipper Repower Project team installed a new turbine produced by Vestas on an existing Clipper turbine tower that will use updated technology to generate more power, more efficiently and reliably.  

The way in which BP grows, harvests and manages its biofuels business in Brazil is changing, too, thanks to new digital technologies that are turning traditional agricultural machinery into a digital army.

On-board computers installed on harvesting and planting equipment are helping to boost productivity, while a technology called SmartLog, installed on 600 vehicles operating in remote areas, is improving, in real time, end-to-end logistics. In just five months, SmartLog has helped BP to reduce the number of harvesters it needs by more than 20%, boosting safety and efficiency. 

All of the information from the field is sent back to an agriculture intelligence centre that allows remote monitoring of all its operations (BP Wind Energy has a similar set-up).

Another efficiency is found in how the biofuels waste is used as fuel to generate biopower at each of BP’s three sites. “Around 70% of our biopower is sold straight into the grid,” says Sanyal, “and we see enormous opportunity for optimizing this in future.”  

And this is just the beginning of the ‘farms of the future’, with driverless vehicles and precision land and crop management brought about by big data and machine learning likely to become standard tools in day-to-day business. 

Technology also has the potential to revolutionize what BP’s Alternative Energy business calls ‘emerging value chains’ and the team is developing a number of digital platforms to connect consumers with local, low carbon electricity to power their homes and transport. For instance, an energy storage partnership with Tesla at BP’s Titan wind farm in South Dakota could provide invaluable lessons for other future power storage opportunities. And, a £1.5 million venturing investment in June 2018 into electricity data intelligence company Voltaware will help other businesses to track their energy demand down to individual appliances. 

“Today, only 20% of primary energy is deployed into useful heat or light for people’s homes and businesses. That means 80% is wasted,” says Sanyal, “and, that presents huge opportunities. Increasingly, we’re going to see disruptive models come through the entire energy system that will change this balance for the better. Our partnerships with companies like Tesla will create new value for our customers, investors and society.” 

It’s early days yet, but, with digital technology predicted to bring about a fourth industrial revolution, there’s good reason to believe that BP’s Alternative Energy business will continue to adapt and evolve.