WHY WE NEED TO REMOVE INDUSTRY BARRIERS TO LEARNING AND INNOVATION. BY MATTHEW HIGHAM
The reality of achieving Net Zero within the energy sector is no small feat. From changing a carbon-heavy generation mix, to opening borders between firms and sharing pivotal innovations, the move will require several shifts if our goals are to be achieved.
Thankfully, the sector has not started from scratch and is certainly not alone. Substantial progress has already been made, with power sector emissions down 58 percent between 2010 and 2018 according to the Government whitepaper ‘Powering our Net Zero future’. Industry leaders across the board are building on government targets and setting their own bold ambitions.
As with any sector, energy companies must build on these foundations. Indeed, many of the biggest hurdles in the transition to Net Zero are still to come. Particularly as the industry seeks to meet the growing demand for clean energy from corporate customers, which has risen substantially since 2018 according to BloombergNEF.
In handling these challenges, the industry will need to collaborate and innovate like never before. Fortunately, the doors are opening, making way for new partnerships and providing opportunities to harness technologies and support the journey to Net Zero.
Locking-in your Net Zero knowledge
More so than any other sector, the energy sector is grappling with the shift from fossil fuels, with millions of low-carbon technologies required to support this according to the Government’s action plan ‘Digitalising our energy system for Net Zero’.
Success in navigating this challenge will depend on a solid knowledge foundation, which in 2021 much of the sector will already have. Efforts to fully utilize data will allow the sector to identify contemporary challenges, monitor carbon consumption and ultimately generate actionable insights to maintain progress in the transition to a low-carbon future. Indeed, as the Government’s action plan outlines, “harnessing the power of data and digitalisation is vital to reaching the UK’s world-leading climate change target”.
One company harnessing analytics, AI and data visualization to understand the true scale of its evolving sustainability challenge is SSE Renewables. The company has harnessed Microsoft Azure to drive actionable operational and commercial insights from diverse data sets to drive its sustainability goals forwards. This is allowing SSE to make cost savings, while ensuring the reliability of the renewable energy sources it is investing in sustain progress to Net Zero.
Maintaining momentum towards Net Zero
As we’ve discussed, the transition to Net Zero won’t happen overnight. As Microsoft’s Chief Sustainability Officer, Lucas Joppa, put it, we don’t stand a chance of getting there if we “set it and forget it” either.
In our own sustainability journey, Microsoft identified key ‘enabling conditions’ to achieve our goals. These conditions covered the likes of risk recognition and data digitalization, to innovation investment and policy progression, with the combination of each aiming to keep us firmly on track to Net Zero helping us to anticipate the challenges that emerge.
In defining the conditions needed for the energy sector to achieve their sustainability goals, the Government white paper builds on the Prime Minister’s ten-point plan to identify where change is needed. Much of this focused on the need to scale low-carbon energy provision from nuclear, hydrogen and offshore wind. Aligning well with Microsoft’s conditions here, success will depend on nurturing these existing markets to maturity so outputs can be expanded and costs reduced, while innovation will also be required to deliver scalable, safe solutions across each energy type.
With each of these markets, technology can support the scaling of power supplies while managing costs and help the UK reach its Net Zero targets. No exception to that, our collaboration with Accenture and Avanade seeks to help accelerate the UK’s transition to Net Zero. Together, we are working to help utility and energy companies such as SSE Renewables transform the energy system and lower the cost of decarbonizing the supply and demand of electricity in the UK.
In doing so, we are applying our expertise in cloud technology, artificial intelligence, and other technologies to help the energy sector transform. The joint project sets three goals as it goes about this:
- Help utility and energy businesses decarbonise the supply of energy by up to 25 percent
- Support the cost-effective electrification of energy demand
- Efficiently match supply and demand for an electricity system that is zero-carbon by 2025
Such partnerships show critical progress in helping the sector achieve the transformative change it needs in the ever-dwindling time we have left to reach Net Zero. Yet, more partnerships and collaborations of a larger scale will be needed if the sector is to meet its own ambitions in reaching Net Zero. Opportunities lie in partnerships that span organizational boundaries and seek to pull in resources from outside the sector.
To enable this, the sector, alongside a range of other industries and organizations, needs to reconsider its data culture. With the wealth of information and insight available, as outlined in the Government action plan, we need to move beyond the view that data is something to hoard and use for short-term gain. When we combine our insights and take an open approach to using data, we can move from making efficiency savings on an individual process, to understanding the nuanced behaviors across entire networks of organizations and individuals.
By combining data that currently spans industries and exists within organizational silos, with today’s technology we can work to create a digital twin of our entire energy system. Doing so will move the value of data beyond pennies and pounds, to creating actionable insights that can help us identify solutions and support real progress to our sustainability ambitions. It’s this utilization of open data that will allow us to truly understand the nation’s sustainability challenge and identify the opportunities available to overcome it. To support this, last year, we announced an Open Data Campaign, which will see 20 new collaborations built around shared data by 2022, to help address the data divide and help organizations realize the benefits of data and the new technologies it powers.
While the road to Net Zero remains steep, the energy sector has already proven that progress is possible, and that it has an appetite for change. By coming together, pooling resources, and collaborating wherever helpful, we will certainly be on the right track to reach Net Zero. The time for action is now.
Matthew Higham is Chief Digital Officer of Microsoft UK. Microsoft enables digital transformation for the era of an intelligent cloud and an intelligent edge. Its mission is to empower every person and every organisation on the planet to achieve more.
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