Market Insight

At CERAWeek 2019, technology and energy continue to coalesce in force and presence

April 04, 2019

Jason dePreaux Jason dePreaux Chief of Research, Industrial Technology Solutions, IHS Markit

Want to learn more?
Have an expert contact you.

March 2019 saw the 38th annual CERAWeek unfold in Houston, Texas. Although CERAWeek continues to be the premier conference on global energy matters, a change has been afoot the past few years. In 2016, CERAWeek added what it called the “Innovation Agora,” which aimed to create a forum for the exchange of ideas on energy innovation as well as emerging technologies and solutions. Since then, what started as a small annex to the show has now grown to wide swaths of ever-growing CERAWeek conference space being carved out to accommodate a raft of technology topics spanning digitization, AI, analytics, connectivity, and robotics—all of which have all found a home here. Below are some highlights from CERAWeek 2019 that stood out for me as I attended the event for the first time.

Autonomy and mobility

With electric vehicles increasingly finding market traction, there was an understandable focus on the in transition occurring in mobility. Bill Ford, executive chairman of the Ford Motor Company, was accepting of an electrified lineup for his company. Ford was “clear” that there would be electric versions of the best-selling F-150 but stopped short of saying when. On autonomous vehicles, the company is a major investor in the start-up Argo AI, which aims to create a self-driving platform. Ford harbors no illusions about the difficulty in achieving full autonomy for cars. “You can’t be right 97.5% of the time,” he deadpans.

In the industrial workspace, robotics and drones received optimistic assessments from leaders who believe that mechanized automatons can continue to take on tasks that are “dull, dirty, and dangerous,” of which there are many in the energy sector. Inspecting high-tension power lines is easier via drones, with image recognition hardware replacing fleet vehicles and helicopters. The advantages of utilizing robots and drones are apparent too for pipeline inspections of off-shore underwater environments.

How close are we to real shifts in replacing significant amounts of the workforce? Roger Barga, manager at Amazon robotics and autonomous services, shed light on his company’s rapid deployment of robots in Amazon fulfillment centers, now over 100,000 strong. Amazon even releases its own open-source “robot OS” for others to use free of charge. Of course, Amazon is not fully altruistic in this gesture, as it knows that data from these robots provide a clear route for the company to sell its AWS offering.

Cloud players

The cloud giants were at CERAWeek in force. Amazon Web Services, Microsoft, and Salesforce all registered their presence at the Agora, and it is clear the players are each developing more sophisticated vertical market approaches to promoting their compute services through specific applications (resembling a trend we have observed in healthcare). The IoT and AI pitch here is familiar: carry out measurement via a network of connected sensors to optimize workflow and production while minimizing downtime. Such messaging resonates just as well with oil rig managers as it does with datacenter operators.

Disruptive energy

The International Energy Association’s Fathi Birol announced what everyone seemed to know at the show. Global energy demand rose by 2.3% in 2018, its fastest pace this past decade. Fossil fuels continue to make up the lion’s share of the mix, though solar saw impressive gains.

Eating into this largely carbon-based pie are renewables like photovoltaics. According to IHS Markit, during this past year the solar industry eclipsed an important milestone in installing more than 100 gigawatts worldwide, with double-digit growth projected for 2019. With capacity ramping up, attention is turning to energy storage to address the inherent supply-and-demand challenges in solar. Indeed, a whole session was devoted to cost trends in utility-scale battery storage.

IHS Markit experts discuss the latest trends in energy storage for solar applications.

The Agora was also a place to explore the long-term future. A standing-room-only presentation offered an update on the holy grail of energy production—fusion energy generation, a technology that has been disparagingly described as “30 years away, 30 years ago.” The current approach is as big as Big Science gets with the ITER (International Thermonuclear Experimental Reactor) project: a $20 billion test reactor being built in France, which will be the first to generate more energy than it is fed. The timescale is daunting, with full experiments starting in 2035 at the earliest.

Robert Mumgaard led the talk and helmed the M.I.T. spinoff, Commonwealth Fusion Systems. The idea is to take advantage of recent technology developments and fast-track alternate fusion designs. Specifically, Mumgaard wants to employ new materials to produce stronger high-field magnets that can simplify and reduce the size of the fusion reactors, in hopes of beating the massive ITER-to-energy parity.

A matter of perspective

Technology is often viewed as a series of rapid transitions and paradigm shifts. Dr. Vaclav Smil, distinguished professor emeritus of the University of Manitoba and who specializes in energy and technology transitions, cautioned attendees that true revolutions tend to work over a longer, more drawn-out timescale. Smil went out of his way to describe himself not as a pessimist, but rather as a skeptical realist. For Smil, the demographics are telling given that massive human populations in China, India, and sub-Saharan Africa all require more energy to support the basics of human progress—much of which will be fueled by fossil sources. At the same time, Smil was critical of the irrational energy consumption of modern nations, especially the US and Canada, characterized by poor commercial building insulation, lack of public transportation, the preponderance of inefficient SUVs, and equating consumption with continued societal progress.  

On artificial intelligence, Smil sees the topic fraught with hype. “We are much less inventive than we think,” he said. Instead, he sees an incremental refinement in technologies taking root decades after they had been established, such as electric motors and silicon-based microchips.

Dr. Vaclav Smil holds a lively conversation with Atul Arya of IHS Markit on a range of challenges facing the oil and energy space. The issues discussed included decarbonization, opportunities for more rational energy use, and Smil’s skepticism of overhyped technologies.

CERAWeek and industrial technology

The interrelation of energy and technology is not new. However, CERAWeek seems primed to be at the nexus of these two disciplines in the future. I expect the increased presence of technology companies at future conferences, an even larger Agora, and a sharpened focus on transformational technologies like cloud services, IoT, AI, and robotics. This is true especially as cloud giants look to more fully penetrate markets beyond consumer and enterprise.

The industrial technology markets—from electric motors to smart buildings, and from photovoltaics to semiconductors—are all shaped by the various transformations that take place in energy. To this end, digitization was alive and well in the energy capital of the world last month during the conference, and signs point to CERAWeek being a must-attend event for technology and energy executives alike in the future.

 

Jason dePreaux is a director and chief of research for industrial market intelligence at IHS Markit Technology.  

Share facebook Twitter Google Plus Linked In Add This Contact Us