Recently REM discussed this topic with Gerhard Salge of Hitachi Energy. Salge holds an MSc and a PhD in Electrical Engineering from RWTH Aachen University, Germany. He joined Hitachi Energy’s predecessor in 1999, working within Corporate Research. From 2005 to 2014, he had several roles within the Medium Voltage Products Business Unit. In 2015, he became Global Head of Technology for Power Products, then Business Chief Technology Officer - CTO for Power Grids in 2016. Salge is currently a Senior Vice President and Global CTO of Hitachi Energy.
REM: What is the current level of digitalization in power grids and how has this changed in the last decade?
Salge: Digital technologies have been used in power grids for decades. Software like supervisory control and data acquisition solutions and automatic protection and control schemes were introduced over 40 years ago and are used universally across power grids today. With the formulation of standards like IEC61850 in 2004, the application of digital technologies in substations, which have traditionally been analog, has also widened.
Today’s grid is changing rapidly. The energy transition is driving unprecedented change to our power systems, with increased adoption of renewable power generation and the electrification of transportation, industry, and buildings sectors, resulting in greater operational complexity. Data centers are now significant drivers of growth in electricity demand – poised to increase their power demand by 160% by 2030.
REM: Where do you see digitalization going in the future?
Salge: Tomorrow’s power system will be more complex with a mix of centralized and decentralized subsystems, and less predictability in power generation and demand. Therefore, it will need to be flexible and scalable, enabling distributed energy sources, microgrids, battery storage, and more. This will dramatically increase the need to optimize energy both locally and system-wide leading to a complex “system of systems” that must be integrated and managed with the help of digital solutions.
Digitalization provides visibility of assets and systems and can efficiently harness enormous quantities of useful data. It easily integrates IT and OT information, so operators in control centers can interpret key insights from processed data in real time and take faster decisions to prevent critical failures or enhance asset management. Digitalization is the only way to manage this complexity and simplify the contextualization of the data that will be generated.
REM: What are some of the challenges that digitalization can solve?
Salge: According to a 2023 report by the IEA, digital technologies could save $1.8 trillion of grid investment globally by 2050 by extending the lifetime of grids.
In the past, the grid was structured with large power plants close to industrialized centers or consumers. Grids were structured around centralized, predictable power generation. Now, with the variability of renewable energy from wind and solar and sometimes battery energy storage systems – it is more distributed and has to travel over long distances to consumption centers. There are many more fluctuations. It is much more complex and requires a lot more control.
New grid conditions are driving the need for digitalization that offers grid operators a more future-proof way to control energy systems with speed, flexibility and reliability as the landscape becomes more complex. Power electronics in combination with digitalization, is the technological core that will allow a greater share of electricity to be generated by variable renewables – without compromising on power system reliability.
State of the art inverters and other power electronic devices allow for real-time monitoring and control of energy flows within the grid, facilitating a more responsive and adaptable energy system. Consequently, a larger and more complex mixed AC/DC power system will evolve with a well-balanced mix of power electronics-based DC equipment and a growing AC part of the grid.
REM: What does Hitachi Energy have to help grid operators with this issue?
Salge: Solutions like Hitachi Energy’s Asset Performance Management solutions offer real-time insights and predictive analytics, helping grid operators make informed decisions to manage the lifetime and maintenance of their equipment. Digital substations enhance automation and flexibility and are essential for maintaining a stable grid amid growing renewable penetration. By integrating digitalization with traditional energy infrastructure, we can ensure that the power grid is resilient, flexible, and capable of handling the increasing share of renewables.
REM: Flexibility in power systems has emerged as a very important concept. Why is that?
Salge: The paradigms on the power generation side and on the demand side are changing. And that means we need a more flexible power system, and the total grid needs to evolve accordingly.
This means that the power system, which connects power generation, with the demand side and the storage element, needs to be connected – and this brings a lot of complexity. With the introduction of variable renewable energy, there is more fluctuation in the power generated, while on the consumption side, there are new demand patterns, for example, from transportation, industries, and data centers.
A flexible power system is key to managing operations during normal conditions and times of high probability disturbances, always ensuring sufficient security of supply. In the past - and even today, to a certain extent, we still benefit from flexibility in our power system – flexibility was provided by large power plants that could add or remove electricity supply simply by burning more or less fuel, mainly natural gas or coal.
REM: How does digitalization address this?
Salge: Only digital tools can manage the increasing fluctuating power generation and demand patterns – for example, when we look at power generation, it is needed more and more today with the introduction of variable renewables. There’s better forecasting – you know how the weather will be tomorrow, but you also know how the weather will be locally 15, 30, or 60 minutes ahead of time.
If big clouds are coming in and largely reducing the solar energy, or if there’s a change in wind patterns. That is a lot of information. You need to forecast as well as you can from data and algorithms. For instance, Hitachi Energy’s Network Manager Energy Management Systems solutions allow grid operators to quickly respond to fluctuations in supply and demand, optimizing performance and ensuring reliability.
In the past, the demand patterns were well-known. That is no longer true because of the higher complexity and the new applications. The future power system will need to adapt quickly to any operational change, may it be the unplanned outage of a large power station or a high ramp-up or down in weather-dependent renewable energy output. Digitalization is pivotal for orchestrating various flexibility mechanisms such as battery storage, interconnectors, and demand-side response.
However, to fully harness these opportunities, the access to, processing of, and sharing of energy data must be seamless and secure. As an example, Hitachi Energy is providing comprehensive data and analytics to help utilities and Independent Power Providers like EDF Renewable Energy make decisions about their future energy development projects.
REM: What roles do technologies like AI and ML play in the future energy grid?
Salge: Artificial Intelligence and Machine Learning can be leveraged to further optimize power system operations. AI and ML enhance e.g. energy forecasting, providing more accurate predictions of supply and demand, which enables optimized grid operation and minimizes energy waste. AI can also simultaneously enhance grid resilience, efficiency, and sustainability, while also ensuring reliable operations in an evolving energy landscape. These technologies are also key to energy forecasting, asset management and operational performance, delivering actionable insights that drive better decision-making and improved efficiency across the grid.
REM: Does Hiatchi Energy have anything new in the AI department?
Salge: Hitachi Energy’s newly launched Nostradamus AI Energy Forecasting Software is one of the first AI forecasting solutions purpose-built for the energy industry. It leverages the company’s 30 years of the most extensive energy market data to provide utilities, power system operators, energy producers and traders with highly precise forecasts for common energy-specific use cases. A modern AI engine, it can generate forecasts that are estimated to be 20 percent more accurate than some industry targets.
Nostradamus AI optimizes energy investments, trading strategies, and revenue opportunities, streamlines operational efficiencies and resource planning, and ensures transparency for regulatory compliance.
