The energy industry is facing potent new challenges, according to Christoph Frei, Secretary General of the World Energy Council. His plea is for more resilience and energy systems that will bend – rather than break – in the storms to come.
by Marc Engelhardt
You see resilience as one of the main drivers of change in the energy industry. What actual risks are we talking about?
There are three fundamental areas of emerging risks with increased gravity, frequency and exposure, depending on the region:
For Europe and North America, cybersecurity is a key risk. In Asia-Pacific, parts of Africa and Latin America, we see extreme weather conditions surfacing as the principal threat. For the Middle East, Australia and parts of Africa, the energy-water-food nexus is the main concern.
What exactly is the energy-water-food nexus?
Ultimately, we have a competition about increasingly strained water resources, for a variety of reasons. Drinking water will always be the first priority. But 98 percent of the power supply critically depends on water. Imagine what that means! If you cannot cool a thermal power plant, you may have to shut it down. So if you’re active in the energy sector, you will have to monitor the developments in the water market very carefully because your whole asset might be in peril. We are considering water aid technologies to potentially mitigate that risk.
Is the energy-water-food nexus already affecting government policies?
Certainly. China for instance has declared that it is no longer interested in ‘thirsty’ technologies. Coal-to-gas, for instance, needs steam. China will accept it – but only if it’s produced elsewhere and then imported to the country. In China, the water footprint would be too high, which is why the technology never went beyond the pilot stage there. The same goes for carbon capture and storage: If it decreases system efficiency and increases the water requirements, it may never be successful. And the technology chosen for reasons of resilience in a country like China has a global impact.
And then there are extreme weather events.
We have found in an assessment with our partners, that there has been a factor four increase of extreme weather events over the past 30 years. When I read this figure, I could hardly believe it. In Central Europe, we don’t have that problem, but in other regions it’s severe. Colombia and Brazil are rethinking their technology selection and their approach to regional integration. Because in the past two years, following the El Niño event, they went through a tremendous energy crisis. The question is whether they can redress their high dependency on hydro: do they need to diversify their mix, bring back more fossil – or will regional rebalancing suffice?
When a storm comes, the oak will fall, but the reed will bend and quickly stand up again once the storm is over. We have to stop building oaks and start to build an energy system that is much more like reed.Christoph Frei, Secretary General of the World Energy Council
Which consequences do these threats have for new infrastructure?
An engineer who built a power plant some 30 years ago might have accounted for security margins, but not in the size of factor four! Since most of the energy infrastructure is planned for a much longer use, factoring in margins is no longer going to be enough. You have to shift the emphasis on how to make energy systems more resilient as a whole. It’s the proverbial difference between the oak and the reed: when a storm comes, the oak will fall, but the reed will bend and quickly stand up again once the storm is over. We have to stop building oaks and start to build an energy system that is much more like reed. Such a system has to be locally empowered, and every part will have individual black-starting capabilities so that critical components will not have to wait for the whole system to come back again.
Is that analysis also true for the third risk you mentioned, cybersecurity?
Definitely. It’s great that we have so many interconnections, but the vulnerability to cyber threats has increased accordingly. Look at the black starting capability: what happens if the system shuts down because of a cyberattack? You might need a black “brain-starting” capability and ring-fence your system – which is extremely difficult because that means not only controlling your factory, your transmission line or power plant. It’s also about, e.g., your power plant’s supplier of air conditioning, which might be centrally controlled and automatically download a virus that in turn affects you.
Smart grids are not only about integration of renewables, or better management of consumer behavior – they are also about an improved management of cyber risks.Christoph Frei, Secretary General of the World Energy Council
What kind of solutions do you see?
We have to shift from thinking of fail-safe – looking at single assets only – to safe-fail – focusing on the system as a whole. Information sharing is one key requirement. Thinking within the company is not enough, you have to include the supply chain side and the cross-border side. The energy sector can learn a lot from banking in this respect. Monoculture in the system is not helpful, diversity will be. It’s like in agriculture: if you have a monoculture, simple pests can bring everything down. Smart grids can be part of the solution. Their new business proposition is that they are not only about integration of renewables, or better management of consumer behavior – they are also about an improved management of cyber risks.
Marc Engelhardt reports from Geneva
Picture credits: WEC
With more than 3,000 members from government, private and state corporations in over 90 countries, the World Energy Council is the biggest network of leaders and practitioners in the energy field. Its aim is to provide information for energy strategies on all levels, focusing on three main challenges, dubbed the energy trilemma:
Dr. Christoph Frei, born in Switzerland in 1969, has been at the helm of the World Energy Council since April 2009.
Stay up to date at all times: everything you need to know about electrification, automation, and digitalization.
It looks like you are using a browser that is not fully supported. Please note that there might be constraints on site display and usability. For the best experience we suggest that you download the newest version of a supported browser: