Electricity is the fundamental guarantee for our production, life, and economic operations. For a country, the energy strategy is of paramount importance to economic growth and national security.
In the face of the new situation of energy transformation, the traditional power industry is facing enormous challenges.
Currently, the power industry is grappling with issues such as increasing demand, changes in energy structure, and the growing challenges of energy security and climate environment, posing severe challenges to the production and operation of power enterprises.
On the one hand, the global proliferation of electricity and the advancement of industrial electrification have led to a continuous increase in electricity demand, resulting in frequent occurrences of “peak shaving” in various regions and immense pressure on the existing electricity ecosystem. On the other hand, changes in energy structure significantly impact the development of power enterprises. With a decline in coal demand, stable petroleum demand, increasing natural gas demand, and the accelerated development of renewable energy, these factors will influence investment choices, business models, competitive dynamics, and ecosystems in the power market. Thirdly, in terms of energy conservation and emissions reduction, the power industry is the largest contributor to carbon emissions. Energy transition is the primary path to carbon neutrality, and power industry enterprises naturally face long-term, arduous, and complex challenges in transformation. Additionally, on the operational front, the power industry’s development has entered a new period of pain, with a slowdown in overall revenue growth and persistently high operating costs leading to a continuous decline in profit margins, posing significant challenges to the high-quality development of the power industry(sources from medcom).
All power enterprises in the energy industry ecosystem are experiencing the pains brought about by these changes. To adapt to these changes and ensure survival, power enterprises are undergoing transformative changes. In the future, power enterprises must possess agility, flexibility, reliability, and resilience; reduce carbon emissions from power generation and adapt to a distributed environment; and focus on user-centric provision of new products and services. In terms of empowering innovation, power enterprises need to build capabilities to manage complex distributed environments, establish intelligent connected infrastructure to support integration and innovation across businesses and ecosystems based on a platform environment, and achieve agile innovation while possessing automation, artificial intelligence, and data analytics capabilities.
Seizing the digital tools, power enterprises take the initiative in transformation.
To do a job well, one must first sharpen one’s tools. The development of new technologies represented by artificial intelligence, blockchain, cloud computing, big data, and the Internet of Things has driven the exploration and application of smart power plants, smart energy supply, smart grids, group control, operational optimization, and digital marketing in the power industry, profoundly impacting the industry’s digital upgrade. In the future, those who can master and adapt the digital tools appropriately have the opportunity to take the lead in this wave of transformation.
The application of digital technology can enhance the operational efficiency of various links in the power industry chain, including product planning, power design, equipment selection and manufacturing, equipment procurement, installation and commissioning, system operation and maintenance, and upgrades. If design data and equipment selection parameter data are interconnected and digitized, the accuracy of the design will significantly improve. In the equipment procurement process, digital comparison of product testing reports submitted by customers is not only much more efficient and accurate than manual methods but also significantly increases trust in the industrial chain.
In the future, the transformation of traditional power enterprises into comprehensive energy service providers is an overarching trend. During this process, leveraging digital technology for data mining can better integrate decentralized energy and diverse needs, promote the efficient integration of energy flow, information flow, and data flow, interconnect different energy categories, and facilitate the transition from “flat” single energy supply to three-dimensional integrated energy supply.
Embracing digitization comprehensively, examples of digital transformation in the power industry:
In recent years, with the popularization of the digital economy, digital technology has been rapidly applied and developed in the power industry, and major power enterprises are actively participating in digital transformation through various means.
State Grid Corporation of China: Accelerating the upgrade of the power grid to an energy internet
To adapt to the new era of power demand, the State Grid Corporation of China is accelerating the upgrade of the power grid to an energy internet, ensuring the basic completion of an internationally leading energy internet enterprise with Chinese characteristics by 2025. To achieve this, the State Grid continuously promotes the digitization of power grid production, strengthening the digital control of the entire process, including power grid planning, construction, dispatching, operation, and maintenance.
During the digital transformation, State Grid Henan Provincial Power Company promotes the construction of the “three platforms” – cloud platform, data middle platform, and Internet of Things platform. This not only achieves “seamless coordination of operation, distribution, and dispatch” but also significantly reduces incident response time and human resources. It also enables accurate inventorying, reducing material management costs. Simultaneously, in power grid operation, it improves the stable operation of the power grid, enhances user satisfaction with power demand, thereby achieving improved quality and efficiency. Moreover, new applications have already begun to create value through these platforms.
China Telecom and State Grid Qingdao Company completed the construction of the largest-scale 5G smart grid experimental network in July 2020. Based on the 5GSA-power slice virtual network, it achieves intelligent communication between ring network substations and intelligent terminals (STUs) with an average one-way delay of 9.8ms, meeting the communication requirements of differential protection within 15ms and enabling fault isolation. 5G provides a ubiquitous, flexible, and high-quality new technical choice for power terminal access networks, driving the construction of a new power system dominated by new energy and providing powerful basic capabilities for creating a safer, more reliable, and greener smart grid.
China Southern Power Grid: Pioneering the development of a “Digital Power Grid”
To accelerate the construction of a digital power grid, China Southern Power Grid established the Digital Power Grid Research Institute in 2019, successively issuing and implementing action plans such as “China Southern Power Grid Company’s Digital Transformation and Digital Power Grid Construction Action Plan” and “China Southern Power Grid Company’s Digital Transformation and Promotion of Management and Business Transformation Action Plan.”
Southern Power Grid: Establishment of the Digital Power Grid Research Institute
In October 2020, under the impetus of Southern Power Grid, the China Electricity Council’s Digital Power Grid Standardization Working Group was established. This group, dedicated to creating a collaborative ecosystem for digital power grids that integrates scientific research, technological innovation, industrial practices, and standard formulation, aims to elevate the achievements of digital power grid practices to national and international standards, securing a leading position in international innovation in the digital power grid.
In specific construction efforts, Southern Power Grid is actively building a digital power grid to enhance energy resource coordination and allocation capabilities. Emphasis is placed on constructing digital enterprises to modernize corporate governance and operations. There is a continuous optimization of digital services to meet the increasing electricity needs for a better life. Additionally, significant efforts are directed towards the development of the digital industry to support the construction of a modern industrial system and the optimization and upgrading of the economic system.
State Energy Group: Platform-based Development, Digitized Operation, Ecological Collaboration, Industrial Chain Coordination, Intelligent Production
The State Energy Group focuses on the digitization and intelligent transformation and upgrade, with the formulation and issuance of the “State Energy Group Digital Transformation Strategy” and the “State Energy Group Overall Plan for Network Security and Informatization in the 14th Five-Year Plan.” These documents clearly outline the goals of transformation development, emphasizing “platform-based development, digitized operation, ecological collaboration, industrial chain coordination, and intelligent production.” The group adheres to the principles of planning, standards, investment, construction, management, and operation, accelerating the construction of intelligent production, smart management, and intelligent operation systems. There is a continuous emphasis on innovation, active exploration of big data application governance, and deepening the innovative application of advanced information technology in various aspects of the group’s energy production, transmission, trading, consumption, and enterprise management.
The National Energy Group Wind Power Intelligent Assembly Platform
The National Energy Group has initiated the construction of the dispatch center command platform project, investing 2.9 billion yuan. The project focuses on creating a “integrated centralized control, intelligent efficient collaboration, and highly integrated visual” collaborative dispatch intelligent command platform. Simultaneously, an industrial Internet platform with “full-process connectivity, full-industry chain connection, and full-scenario monitoring” is being developed. This platform covers the group headquarters and 55 subsidiary companies, as well as 229 third-level production units. Additionally, the National Energy Group explores innovative business models, actively planning to build two major platforms digital industrial product e-commerce and comprehensive energy e-commerce – to promote the transformation of the company from an energy product supplier to a comprehensive energy service provider.
Three Gorges Group: Comprehensive Advancement of Industrial Digital Innovation
The Three Gorges Group focuses on its main business and comprehensively promotes industrial digital innovation. The group continuously upgrades digital dams around major hydropower projects such as Wudongde and Baihetan hydropower stations to achieve intelligent construction. The construction of smart power plants is promoted, with a deepening application of technologies such as 5G, artificial intelligence, and the Internet of Things on a large scale. This enables full lifecycle management of basin-level cascade hydropower stations. Leveraging the group’s advantages in clean energy, the Three Gorges Group engages in the construction of high-performance, green data centers to provide digital infrastructure support for the upstream and downstream industries of clean energy and contribute to “new infrastructure.”
The Three Gorges Group’s Largest Green Zero-Carbon Data Center Cluster in Central China
The Three Gorges Group focuses on basin-level cascade hydropower development, offshore wind power, ecological environmental protection, and other businesses. It accelerates the implementation of a batch of major digital transformation projects from five aspects: infrastructure, production and operation, management improvement, network security, and system guarantee. Simultaneously, it establishes an innovative system and mechanism to ensure the efficient implementation of digital transformation(quotes from medcom.com.pl).
Currently, whether on the production side, grid side, or user side, the digitization transformation of power enterprises has become an unstoppable trend. Digital services and operations are vigorously improving the competitiveness of the power industry. Through the digitization and intelligent transformation of “all elements, all businesses, and all processes,” the capabilities of power enterprises in production, management, and operations are enhanced. This promotes the acceleration of power enterprises’ transformation into smart grid operators, integrated players in the energy industry value chain, and service providers in the energy ecosystem.