How many times have we heard that the most successful companies do not need to own anything?  Uber, the world’s largest taxi company, does not own any vehicles. Alibaba, the most valuable retailer, has no inventories. And Airbnb, the world’s largest accommodation provider, owns no real estate. What we are witnessing is a global transformation of business models driven by usage and sharing rather than ownership. Software over hardware. Intermediation instead of ownership. But can this be applied to all economic sectors? And is the energy sector prepared for this transformation?

Variable renewable energy and distributed generation will be crucial elements of the future energy system. Their importance lies not only in the energy they produce, but also in the sheer amount of data they sense, collect, create, store and communicate to surrounding systems.

Let’s take an example. A typical onshore wind farm generates 500 terabytes of data every 13 days. At a moderate 1,840 load operating hours and 20-year lifetime, this would translate into more than 61,000 terabytes for a single site. But most of the data generated by such a wind farm is never seen, let alone analysed or optimised. Engineers will select a few indicators to monitor in real-time, and monitor other indicators at semi-regular intervals. Much of the collected data will never be consulted until a failure occurs. Many operators do not adopt more sophisticated data analysis tools or digital solutions because of costs, time or a lack of knowledge on where to start.

So what does this add up to? It means that manufacturers and operators are sitting on vast banks of data that could be mined. As the economics of wind energy continue to face more pressures, digital technology applications could unlock significant value for industry participants across the entire supply chain.

 

'The highest and largely untapped potential for digitalisation lies in high quality data exchanges between wind operators and the surrounding energy ecosystem.'

 

This is why last year WindEurope organised its first ever 'hackathon', a competition which allowed innovators from different backgrounds to come up with digital solutions for the industry in the span of 2 days. Two companies, EDPR and Envision Energy, set the challenges of reducing faults in wind turbines and improving wind speed forecasting through the use of a common software platform. Companies learned the value of sharing data and letting people outside the wind energy industry come up with solutions. And as a result, the winners of the 'hackathon' are now exploring the business potential of developing these solutions, including predictive maintenance and smart turbine management applications, for the two companies.

Most digital solutions for wind turbines are marketed as add-ons, not as part of the basic offering. Moreover, their value may seem marginal (1-5%) for asset owners in terms of yield improvement, reduction in operation and maintenance costs, and improved accuracy in forecasting. Digital solutions may be an attractive proposition for assets operating for several years, but it is challenging to demonstrate added value for new assets.

As a result, wind energy buyers tend to see digitalisation as a 'nice-to-have' and not as a 'must-have'. When buying new machines, they expect an optimal level of performance, above and beyond older technology; the improvements offered by digital solutions may seem too futuristic. New investors may focus instead on lowering CAPEX, which has a significant bearing on the levelised cost of energy.

However, as more wind farms reach the end of their lives and support schemes expire, extracting maximum value from investments becomes more important. Over the next decade, between 40 and 80 GW of wind energy turbines will reach the end of their designed operational life, according to our latest WindEurope estimates. But some of these assets will be fit to continue safe operation beyond this time, and digital solutions could play an increasing role in addressing lifetime management strategies for wind turbines. By creating digital ‘twins’ for prognosis of failures in key components, they help operators to decide how long they should ‘sweat the asset’ (operate it without maintenance interventions) and decide at what point maintenance, overhaul and replacement of components will yield maximum benefit.

Finally, the highest and largely untapped potential for digitalisation lies in high quality data exchanges between wind operators and the surrounding energy ecosystem. Making use of this data could unlock new horizons of productivity and allow the wind energy industry to realise its enormous potential fully.

For example, forecasting increased wind speeds over a period of time not only impacts the wind energy generated, but also the transmission capacity that power lines can host. The more the wind blows, the more it cools down the power lines. This allows more power to be transmitted beyond the line’s thermal design margin, and avoids the curtailment of wind energy for safety reasons. Digital solutions for exchanging wind speed forecasts between wind and system operators in order to optimise transmission capacity are still largely untapped.

 

'Digital solutions for exchanging wind speed forecasts between wind and system operators in order to optimise transmission capacity are still largely untapped.'

 

Similarly, digital solutions are at the core of direct marketing energy from geographically dispersed wind farms. Next Kraftwerke, the operator of the largest virtual power plant in Europe, trades thousands of megawatts from wind farms, storage units and other renewable energy assets without owning a single power plant. The virtual power plant facilitates the integration of these generators with the grid by offering their combined flexibility (ramping up and down at short notice for frequency control) and selling their generation output in the wholesale market. Surprisingly, virtual power plants are still a curiosity rather than a common feature in the digitalisation of wind power integration with the grid.

The European Technology & Innovation Platform on wind energy (ETIPWind) has created a mind-map compiling the opportunities offered by digitalisation for wind energy. All these can be summarised in terms of facilitating system integration and continuing cost reduction (see text box below).

Until now, renewables have created value in the power system by injecting watts; clean, affordable and locally harvested watts. But to remain a disruptive force of change, and to keep outweighing conventional power generation, they need to create value from bytes too.

 

Objectives for digitalisation. Source: ETIP Wind