At a time of increasing interconnectivity and complexities in energy systems, as well as a surge in data volume, advanced analytics tools have emerged as critical resources for making informed decisions. Australia-based Energy Exemplar is an end-to-end, integrated solutions provider in the energy space that works with organisations to simplify these complex assessments. In a recent interview, the company’s chief executive officer, David Wilson, discussed the changing energy sector dynamics, the need for such analytics solutions and the company’s experience in India…
The company was founded around 25 years ago when power systems were not very interconnected. What was the main driver behind the formation of the company?
Our founder, Dr Glenn Drayton, had completed a doctoral thesis on market analysis, and he built this company on the back of that work. There were no tool suites available at that time to look at different market structures and understand them. This simple idea was the genesis of the first version of PLEXOS. Shortly after, Dr Drayton identified there was a need around the world for such tools. As power markets around the globe were getting liberalised, particularly in California, South Africa and parts of Australia, the demand for our products picked up. Thus, as a company, we have been serving energy markets in a lot of ways since their inception.
How has the power system evolved since then and how have your products changed with time?
One of the notable things about the energy sector is that is it incredibly dynamic and a lot of big changes have taken place in the past few decades. The biggest impacts have been witnessed in technology, market design and regulations. There have been some significant shifts such as the dramatic drop in the cost of renewables, growing viability of energy storage and increase in digitalisation, enabling enhanced interconnectivity.
If we go back 25 years, there were a limited number of large power assets connected to the grid, but now we have increasingly smaller and distributed projects, especially in the case of renewables. Thus, the number of elements connected to the grid has increased and so have the complexity and market settings. The energy sector is now a market-based system and major reforms have been implemented in recent years to create markets for ancillary services and grid balancing features. These may not be so transparent to the average user, but these services are important for the grid to operate.
All these factors have made the grid exponentially more complicated than it was before. Earlier, one could look at a single piece of the grid in isolation and assess it in isolation. However, now it is a single energy system combining electricity, gas, transportation and even interconnecting hydrogen, agriculture, water and industries. Moreover, the new regulatory settings or new policy objectives such as net zero emissions have a huge impact on the energy strategies of countries and companies. Decarbonising the system involves exploring many different options for optimisation or best decision-making. Thus, we have been building our tool suite capable of handling these disruptive changes.
The power system is becoming more complicated with VPPAs, DRE and real-time dynamic markets. Meanwhile, data security and transparency have emerged as major issues. How do you address these issues, particularly in sensitive markets like India?
In this area, the government plays a role in establishing the right frameworks for data sharing. My personal perspective is that these markets work much better with transparency. More information leads to better operations and investments, and thus, a more favourable outcome for consumers in the country. There are many different models across the world in this space, but in general, greater data sharing is advantageous. The best examples we have are of countries where stakeholders share the data and models they employ to inform their planning and operational assumptions.
As green hydrogen and green ammonia are expected to play an important role in the energy mix, are there plans to integrate them into the platform as well?
Our platform can handle any commodity, including hydrogen and its derivatives. If we consider hydrogen as an energy carrier, then we can seamlessly integrate ammonia and methanol into our platform.
For instance, the European Network of Transmission System Operators for Electricity (ENTSO-E) and for Gas (ENTSO-G) has built a fully sector-coupled European gas and electricity model. They do all their planning for 42 countries with an integrated solution for both electricity and transmission, and they are also exploring the role of hydrogen in this model. For example, Europe generates high renewable energy in the north that needs to be transported to the industrial centres of the south. This raises questions such as whether more transmission lines or more gas lines are required, and how to strike the right balance between the two.
In view of this, they are evaluating options such as building more electrolysers in the north to produce green hydrogen and then transferring this green hydrogen through legacy natural gas assets. This approach leverages the seasonal benefits of hydrogen as an energy storage mechanism. Thus, if more hydrogen is put into the pipelines, it can be drawn at different times from the storage for utilisation. Thus, many agencies are evaluating such hydrogen investments.
In another example, the American Bureau of Shipping is looking at the availability of green fuels at different ports and cargo demands across all ports. They then optimise the types and sizes of ships with different fuel sources to decarbonise shipping.
We also do cost optimisation analyses for water and electricity utilities in the Middle East. Most of these countries employ desalination to make potable water through thermal generation or reverse osmosis technologies. The water and electricity supply chains have different seasonality and storage requirements. Thus, we analyse how they build and operate those assets, so that they achieve the optimal amount of water and electricity at the lowest cost while meeting all the different reliability settings. These are some examples of integrating energy intensive systems or supply chains and analysing these cases.
Have the O&M issues faced during the pandemic helped your case? Have you seen more companies migrating to high-level analytics systems?
The increasing complexity of the energy sector has brought people to our platforms as organisations need to collaborate and require powerful tools to understand these complicated data points. In the past, with a relatively simple energy system, one could quite confidently work out the path forward. However, the current complexity calls for a complete toolbox of advanced analytics solutions.
The pandemic has helped drive collaborative efforts, allowing diverse stakeholders to contribute to a model by inputting data, fine-tuning scenarios and then integrating the outputs of these into a single platform. This is now being done from multiple locations around the world with high security, as people are increasingly working from a lot of different remote places. Thus, facilitating this collaboration has been very important.
What has been the overall experience in India with regard to the uptake and availability of skilled manpower?
We have made considerable investment in India. We have development centres in Pune and Bengaluru, with a staff of 140 people in India. We have been able to find really good technical talent here. Our development journey has been good in India from the engineering and economics perspective.
We have served various organisations in India for a while now. We feel the country is at that next level of complexity and maturity, where it can collaborate better. Thus, there is a lot of interest in the Indian market, driven by both government objectives and corporate aspirations.
India is currently on this interesting energy transition journey, and many other nations are also on a similar path, although at different scales and speeds. However, there is a lot of opportunity to learn and collaborate not just at the national level, but also on a global scale. The aim is to manage the energy transition in a manner that is economically responsible, efficient and as rapid as possible.
