An opportunity to make a difference

An opportunity to make a difference

Eugenio Cau
While not as sexy as in other fields, the revolution in energy technology is going on all around us. As with all revolutions, it will require a flexibility and readiness to adopt new ideas

In the spring of 2017, Bill Gates, the co-founder of Microsoft and one of the wealthiest men on the planet, sent an open letter via his personal website to all the young people who were due to graduate at the time—this from a man who never graduated himself. He congratulated them, encouraged them to become a force for change, then said that many young people ask for career advice. Gates responds that if he were twenty years old again and looking for “an opportunity to make a difference in the world,” he would consider three areas: “One is artificial intelligence. We have only just begun to discover ways to make people’s lives more productive and creative. The second sector is energy, because making it clean, economical and reliable will be essential to combat poverty and climate change. The third is life sciences, which are rich in opportunities to help people live longer and healthier lives.”

It is of course fairly obvious that Bill Gates would encourage young graduates to work in the field of artificial intelligence (AI). In a sense, the same goes for life sciences, particularly considering the activities of the charitable foundation set up by Gates and his wife Melinda after giving up his operational role at Microsoft. Of the three sectors mentioned, therefore, the most interesting is undoubtedly energy, too often snubbed by people who call themselves innovators. Come to think of it, energy is not a sector often mentioned by people on the cutting edge of innovation. Better to talk about space travel, which stimulates people’s imagination and makes newspaper headlines, as clearly demonstrated by the out of atmosphere adventures of Elon Musk with his SpaceX. Better to talk about robotics, which is a fascinating technology. Energy is considered boring, despite the fact that in the history of humanity, technical revolutions have always been centered around the use of energy, from the discovery of fire onwards.

In short, says Bill Gates, who has some knowledge of these things, if you want to revolutionize technology and leave your mark on the world, you cannot ignore energy. Now, when we talk about innovation and high tech, the word “revolution” trips easily off the tongue. We are all intoxicated with the emphatic rhetoric that says that everything is a revolution, a milestone, a historical moment. AI is a revolution, the blockchain is a revolution, big data, robotics, self-driving cars will forever change the way of life of millions and perhaps billions of people. It's all true—but it's equally true that all this talk of revolution has generated unrealistic expectations. AI is often defined either as an apocalypse (a super-developed AI will turn against us and make us its slaves) or a salvation (AI will solve all the problems of humanity), when the better approach is a gradual one: AI is already bringing enormous benefits to humanity, but no serious scholar expects AI to reach the cognitive abilities of human beings for a few more decades (even for a few centuries, some argue).

When we talk about energy (and technology applied to energy), in addition to high expectations, there is the urgency that comes from our concern about climate change, which makes the discussion more confused. We can therefore begin to understand how technology is systematically changing the energy sector, and why Bill Gates claims that the best minds of this generation must be applied to it. Only then will we try to determine whether we can really talk about a revolution.


AI: myths and reality

The main movements in the energy sector are linked to the application of the most important emerging technologies. Take for example AI. Machine learning, with its superhuman ability to optimize and recognize patterns, is a precious ally for those who want to achieve renewal in the sector. At the beginning of 2019, DeepMind, a Google company involved in AI, announced that it had increased the value of Google's wind farms in the center of the United States by “about 20 percent” thanks to its own algorithms. The machine learning model had in fact been trained to predict, 36 hours in advance, how the wind would blow, and to plan the supply of electricity to the power grid a full day ahead. Machine learning algorithms capable of learning by themselves are also essential for creating “smart grids” for decentralized and digital electricity.

AI has also been used in the mining sector in combination with big data (side note: machine learning feeds on big data, and does not exist without it). Industry is naturally rich in data, and in recent years this wealth has been put to good use in many ways. Creating predictive models that can learn by themselves through machine learning can reduce infrastructure and operational costs, increase production efficiency and improve safety. During drilling, for example, AI can facilitate operations by performing a continuous and immediate diagnosis of many factors, including seismic vibrations, thermal gradients and the permeability of soil layers. Moreover, machine learning can facilitate data-driven decisions when it comes to evaluating investments in exploration and production. Analysis of geological data by AI can allow a faster and above all more efficient identification of new oil fields. Just as in the field of medicine, machine learning proves more efficient than experienced professionals at interpreting certain data, such as reading x-rays. AI is often more efficient than geologists with decades of field experience.

This does not mean that AI will replace geologists, just as it will not replace radiologists. It does however mean that algorithms will support the work of professionals (often they are already doing it), making their work more effective and safer. McKinsey has estimated that the entire supply chain of the Oil & Gas sector could save approximately USD 50 billion by making better use of data and machine learning technologies, and investments are moving accordingly. According to a MarketsandMarkets survey, the industry's investments in AI, which were $1.57 billion in 2017, will reach $2.85 billion by 2022.


Potentials and pitfalls of the blockchain

Blockchain is another technology everyone is talking about now. There was a time, two or three years ago, when the movement around the blockchain believed it had found the key to changing Western societies. Thanks to its decentralized system, which allows the safe passage of information without the intervention of a central authority, the blockchain would forever change finance, logistics, even liberal democracy, allowing the creation of horizontal and anarchist systems. Even the energy sector would have been demolished: the blockchain would have allowed the widespread management of energy self-production and self-consumption systems, giving rise to energy micro-communities at neighborhood or condominium level, capable of creating their own “grid” separate from the mains. From finance to democracy, these autarchic dreams have turned out to be greatly exaggerated. The same is true for energy, but it does not mean that the blockchain has no significant potential. According to a survey by the German Energy Agency, which interviewed 70 energy decision-makers, from utility managers to network operators, 20 percent of respondents believe the blockchain will be a “game-changer” in the energy sector.

As the main power of the blockchain is to certify any transaction in a secure manner and without the need for an external control body, it is difficult for anyone who wants to create a “smart grid” not to use it. In a smart grid, where electricity comes from many sources and is exchanged between many actors, transactions swirl around, and a flexible and decentralized system like the blockchain is considered ideal by many. Use of the blockchain has obvious implications for supply chain management in all areas of the energy industry, and the guarantee of traceability of all the elements has the potential to boost the Oil & Gas sector, where reliability is of primary importance.

The huge popularity of the blockchain has not obscured the fact that its application can be insidious. In the worlds of both energy and finance, there are doubts about the actual scalability of the technology, due to both the fact that at the moment there is no standard technological architecture and, more significantly, questions about its sustainability. Keeping a blockchain active requires an enormous amount of energy, which would be ironic for a technology that the energy sector wants to make it more efficient.


Who’s afraid of robots?

Robotics is a sector that immediately generates passions. People often have an unpleasant view of robots, but when we consider their use in industrial settings, they become decidedly less showy. Manufacturing in all sectors is experiencing a structural change due to the automation of many processes, and in the energy sector this means increasing efficiency and quality. Silicon wafers that make up photovoltaic panels, for example, are extremely delicate and research has shown that the use of pneumatic robots makes the manufacturing process more precise and efficient. In the Oil & Gas sector, the use of robots has flourished for years and may help reassure those who, in other industries, fear that the advent of automation will lead to an unbalanced coexistence. From undersea installations to inspections of offshore fields, robots and drones work alongside human operators, and replace them in the most dangerous operations. This has helped make professions that were once considered risky extremely safe.

This list of technological applications is undoubtedly partial, but it can be a first step towards trying to understand how far the technological revolution in the energy sector can go. Assuming it can be defined as a revolution obviously. According to a study by the World Economic Forum, in the Oil & Gas sector alone, between 2016 and 2025, digitalization will benefit all industry players, as well as consumers, to the tune of USD 1,600 billion. It will also be a factor of change: digital optimization and efficiency processes will lead to a reduction in emissions equal to 1,300 million tons of CO2, to 3,600 billion liters of water being saved and to the loss of 230 thousand barrels of crude oil being avoided.

If an old fox like Bill Gates is advising the most talented youngsters to dive into the energy sector, it is because he knows that revolutions are not born in a vacuum. A characteristic of revolutions, especially those that do not take place in the street, with people being wounded and killed, is that you do not always notice them while they are happening. Perhaps Gates himself did not feel like a revolutionary when he was programming the first Windows embryos in a garage; the revolution only came later. But all the epochal changes leave certain clues and certain traces. To make a revolution you need financial resources and an aptitude for risk. You need flexibility and a readiness to adopt new ideas. You need realism and recklessness. We need a receptive cultural climate and an urgency for change-the latter is certainly not lacking. The ground to start the digital revolution is fertile.