Accelerated digitalization speeds towards sustainability

Accelerated digitalization speeds towards sustainability

By Ron Beck, Marketing Strategy Director and Dr. Paige Morse, Industry Marketing Director, Aspen Technology

The 2020 pandemic slowed industrial activity, reduced urban traffic, and halted most non-essential air travel. Economic and social turbulence impacted operations and markets for energy and chemical companies. This accelerated digital transformation and reinforced emphasis on sustainability. Globally intertwined dependencies across economies, supply chains, company value chains, climate, biodiversity, and health, became clearer, making digital technology a key enabler. 

As 2021 kicked in, industry leaders focused on strengthening agility and resilience in their businesses. This includes further accelerating digitalization for most energy and chemical companies. As a strategic weapon, digitalization enables agile supply chains to pivot their businesses, as energy transition picks up steam and reacts to turbulent economics, and this is forecasted to persist through most of 2021. Companies grapple with an increasing need to provide asset integrity and safety via remote approaches. 

New normal for the energy industry

Asian markets such as China, India, and Southeast Asia are projected to recover earlier than the rest of the world post-pandemic. However, whether recovery works in tandem with sustainability and circular economy initiatives depend on how regional governments prioritize their support for low carbon and related goals. A survey involving about 200 executives, conducted by AspenTech and Crystol Energy, reiterates that the industry is preparing for the energy transition. This will set in motion businesses accelerating towards cleaner fuels, as many oil and gas players look towards diversifying their energy mix. 

Persistent skills shortages become increasingly pressing beyond the next five years, as industry downsizing has whittled down valuable domain expertise. In addition, nearly 80% of data scientists are on the job for less than three years across major energy and chemical companies. This paves the way for digital tools and analytics, as process companies need to leverage technology, flatten the organization, and evolve business priorities towards the Self-Optimizing Plant. 

Energy and chemical companies are likely to focus on reducing costs and carbon footprint. There will be a shift in the refining production mix towards chemical feedstocks, as growth in chemicals is expected to account for half of oil demand growth in Asia in the coming years. As economies and middle class growth resumes momentum in Asia, key projects such as the Indian RRPCL mega project integrating refining and chemicals, will focus on addressing changing market demands efficiently. The industry evolution from oil to gas consumption will continue, especially with respect to chemical feedstocks and power generation. Natural gas and renewables look set to meet the growing demand for electricity. The hydrogen economy is an emerging dimension. 

Early concept design is the most important phase in the plant asset lifecycle – with complex requirements in areas, such as carbon and waste reduction, as well as the need to have flexible facilities. It is essential to leverage artificial intelligence (AI) and high-performance computing to fine tune designs with a significantly broader set of data. AI and analytics-assisted optioneering will improve capital decision-making, reduce costs, and better ensure the overall fit for the plant’s intended purpose. 

Hybrid models that combine rigorous and AI-driven models are increasingly required to optimize complex operations more accurately and autonomously. For capital projects, estimating transparency across the project team and C-suite is critical to unlock value. To manage project risk efficiently, it is necessary to visualize, analyze, benchmark, and share data to increase speed and certainty. The result is a more agile, collaborative, and informed estimating process with fewer surprises for executives. 

Sustainability targets in play 

In driving towards sustainability and efficiency, the energy industry will likely see greater innovation and investment. The largest Asian energy players will closely follow industry early movers or be one themselves, in adopting the most promising technology approaches to carbon capture and reduction, as well as energy source substitution in the energy value chain. Sustainability targets will lead to growth opportunities for companies that can innovate, launch high performing solutions, and adopt optimally efficient and integrated processes to reduce emissions and waste. 

Industrial AI is central to this cause, as increasing plant data provides insights and advice for knowledge workers to achieve goals in profitability, sustainability, quality, and delivery. Solutions, such as AI-enabled hybrid models, can optimize operations, create soft sensors, design new equipment, and integrate asset-wide processes, such as crude-to-chemicals. These insights help companies progress in sustainability and develop new high-performance solutions. The latest innovations enable both humans and autonomous decision-making to optimize outcomes, which allows companies to better respond to changes and be positioned for new opportunities. 

Currently the largest operating carbon capture facility, Technology Center Mongstad pushes what is possible with carbon capture, modelling products to validate results and economics. The world’s leading researchers in algae-to-fuels conversion have deployed AspenTech’s modeling, energy and economics tools to achieve breakthroughs in energy balance and economics. Researchers are developing the next generation process technology for hydrogen economy, fuel cells, carbon dioxide to chemicals, and pyrolysis use of the company’s tools, as staples in the innovation process. 

The sustainability challenge for most companies includes short-term efficiency improvements to help reduce carbon emissions, water use and waste production for current operations, and longer-term efforts to develop new energy sources and products for the circular economy. Resource efficiency improvement remains an important immediate activity area for manufacturers who could see as much as a 25% reduction in energy use according to the International Energy Agency (IEA). The IEA urges countries to link pandemic recovery funds and energy efficiency improvement in order to progress, although Southeast Asian economies may find it challenging to do so.

Innovation strategies are fundamental for companies to progress towards circular economy goals, and digital technologies are critical to accelerating this effort. Innovative supply chain solutions are already helping companies to better integrate post-consumer materials into their value chains while advanced process control technologies are helping to lower energy use and waste generation in production processes.

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