Interview DNV GL CEO Remi Eriksen: “We see ourselves as data custodian”

In an exclusive interview with Energy Post, DNV GL’s Group President & CEO Remi Eriksen and Chief Group Development Officer David Walker explain the company’s ambitions to use its independence and cross-sectorial energy expertise to become a leading data and knowledge hub in the global energy industry. “We see ourselves as data custodian.” They also give their expert view on what our energy future will look like, based on the Technology Outlook: buildings will become energy hubs, the cost of storage will come down, an automated Internet of Energy will emerge – quicker than many think.

Interview on 30 June 2016 by Sonja van Renssen

DNV GL began life 152 years ago ascertaining that ships were built and operated to certain standards. Over time, it expanded into energy and today it sets – or certifies compliance with – the standards for building anything from a gas pipeline to a wind farm. But DNV GL, one of the largest risk management providers in the world, headquartered in Oslo with operations in more than 100 countries and 15,000 staff, does more than standards and certification. It sees its future squarely in the world of digitalisation and Big Data. As CEO Remi Eriksen says: “We see ourselves as being a data custodian.”

DNV GL’s CEO, Remi Eriksen
His logic is simple. Right from the start, the company was a data hub. Back then, it collected data about ships. Today, it collects data from the tips of wind turbines to the compressors on an offshore platform to create a comprehensive picture of how different energy systems run – and could run more efficiently. For Eriksen and his Chief Group Development Officer David Walker, DNV GL’s cross-sectoral technology expertise and independence can accelerate the Big Data revolution in energy systems for the benefit of the full energy value chain.

Both Eriksen and Walker were in Brussels on 31 May to present DNV GL’s Technology Outlook 2025. In this report, produced only once every five years, the company identifies which technologies it believes will get big over the next decade. It might not be as famous as the Energy Outlooks of the oil majors, but a closer look reveals a clear vision of the future.

Within the next decade DNV GL expects “self-thinking” grids to take an active role in managing the power system. It also expects to see hybrid grids that combine flexible AC and high-voltage DC (HVDC). Over the next ten years, DNV GL believes that the costs of solar will drop by another 40% and floating wind turbines will achieve “full-scale deployment”. Buildings will become energy hubs, rather than going off-grid. The cost of batteries will come down sharply while energy density will increase sharply.

“We still believe that domain knowledge and understanding hard core technologies and systems is important and will be important in future”

But for Eriksen and Walker perhaps the most exciting development is digitalisation. Eriksen became Group President & CEO of DNV GL just over a year ago, after a long history with the company, and bringing with him a wealth of experience from the maritime and offshore sector in particular. Walker was until recently CEO of the Energy Business Area.

Q: What opportunities does the energy transition open up to you?
Eriksen: Our bread and butter work is encouraging innovation through standard setting and certification. If you standardise, you can for instance drive down costs of technology immensely. And if costs come down, you can deploy at scale. In this way, we are helping drive the deployment of clean energy technologies.

We also see an opportunity to create a new revenue stream, however. There is a lot of data in the energy system [of the future]. We see ourselves being a data custodian, managing that data. Not necessarily owning it, but being a trusted partner for the industry.  We wouldn’t use it to develop competing technologies, but we can collect data, assure its quality, distribute access to it, analyse it and share new insights with customers and the industries we work in.

Q: There are lots of companies that want to be “custodians” of Big Data. What skills do you bring compared to the Googles of this world for example?
Eriksen: We have a lot of scientists at DNV GL, computer scientists too. But we still believe that domain knowledge and understanding hard core technologies and systems like circuit breakers, cables, power grids, ships, wind turbines, solar panels and distribution networks is important and will be important in future. That combination of industry knowledge, deep technical expertise, and being a trusted independent party gives us an opportunity to use analytics on all this data and present insights back to society and our customers. Ultimately, to help them make better informed decisions to advance safety, efficiency and sustainability.

“We already see the cost of batteries coming down and we see very positive signals on energy density, through chemical innovations such as zinc bromide batteries”

We are already seeing these opportunities materialise, for example through our ECO Insight tool for ships. This enables them to decide on which route to take based on weather, cargo, fuel, desired arrival time etc. We have a similar tool for energy efficiency in the US, where we provide insights into which measures are working and can advise on the best ones.

Walker: Take an offshore platform. At the moment, data from each piece of equipment flows back to its manufacturer. But if we collect all this data, we can look for trends across the whole functioning of the platform. That’s really using big data. Manufacturers would be very uncomfortable if one of them was handling it on behalf of the others. Our independence is vital. We aggregate data but we also protect it from our customers’ competitors and their suppliers’ competitors.

Eriksen: The same is true for grids. You can trust us to store your data. We’re not going to share it with another company manufacturing the same type of equipment.

It goes back to our origins. It’s in our DNA. When we classify ships, we are a data hub between the steel maker, equipment suppliers, designers, shipyard, owner and insurance company. We are a custodian of important data about the status of an asset, from the early stages into operation.

Q: What are the biggest challenges to the “data hubs” you envisage creating?
Walker: As everything is interconnected from generation to smart meters in households you can access the system digitally, which increases the risk for cyber-attacks and privacy concerns. Both are risks you need to manage. We think it’s possible. Data hubs could also play an important part of addressing climate change-related problems because you can operate assets more efficiently and harvest learnings in a more systematic way.

Q: It sounds like your ultimate goal is to understand and manage entire energy systems. Is that right?
Walker: We have developed this concept of a “digital twin”:  a digital model of an actual physical system. We did it for ships and rigs, and a group in Arnhem is now working on it for grids.

The idea is that tests on the digital model can be used to improve the real version. You can run a combination of faults that would take years to test in real life and see how a control system copes with simultaneous failures and recovery. We will be able to predict how the grid performs under certain circumstances and correct faults before they happen. This digital twin concept can be duplicated across assets, from ships and grids to wind farms, solar plants and gas pipelines.

“We certainly see gas as a very important fuel for the foreseeable future. We still need it in power generation and as LNG fuel for ships or heavy trucking”

Q: Do you see a limit to digitalisation?
Walker: As we have more and more data coming in from smart meters and sensors right from the tip of the turbine and into the control room, analysis has to become more automated. What we’ll see as time goes on is an Internet of Energy that can be more reliably operated by machines that learn than humans.

Q: What technologies are you keeping an eye on? What will further drive the energy transition?
Eriksen: One big driver will be the cost of batteries and their energy density. Those two in combination are very powerful. We already see the cost of batteries coming down and we see very positive signals on energy density, through chemical innovations such as zinc bromide batteries – to just give one example.

Batteries bring many benefits. We’ve had positive results from tests on offshore supply vessels, for example. Some of them already run on gas, and if you add a battery, you get extra reductions in air pollution and CO2, plus less noise and, crucially, a much more responsive system. Captains like it because ships react immediately. That’s good for safety. The combination of gas and battery technologies will be impactful.

“I think a hybrid grid combining AC with high-voltage DC (HVDC) is something Europe can take a lead on, plus interconnections, also sub-sea”

Walker: We have a lab in New York for testing batteries and one in Berkeley, California, for solar panels. We’re studying the cycles of a battery charging and discharging and a solar panel going through day and night. We do this on an accelerated basis in “climate cabinets”, which reflect the conditions the equipment would be operating in. Do they perform the way the manufacturer says they will? It’s really important to test.

Q: You said a quarter of the grid equipment you test – switchgear, transformers etc – doesn’t work the way it’s supposed to.
Walker: That’s correct for the prototypes we test. Some of this equipment is quite complex. It’s very difficult to model the maths. Physical testing is really important. Prototype failures under test can be corrected in the actual models going into mass production.

Q: Your vision of the future energy system is one of big wind farms and supergrids, and rooftop solar and local consumption.
Walker: Yes. The only reason that is possible is because of ICT systems. That’s the biggest difference with the past. Historically we couldn’t have handled so many different capabilities at the same time. Our physical mechanical systems were just not capable. Now we have ICT systems that make it possible to run multiple sources and back up.

The Future of Spaceship Earth is a project underway at DNV GL to forecast the state of the planet in 2050. The way Eriksen tells it, when DNV GL turned 150 two years ago it celebrated in part by sponsoring some think-tanks and round tables. At one such event, the renowned futurologist Jørgen Randers challenged the company: “DNV GL is the world’s expert in classifying huge complex systems like modern ships to make sure they are safe and sustainable. Why don’t you use your expertise to classify the greatest ship of them all: spaceship earth?” So it did.

Q: Do you still see a role for thermal power generation, notably gas?
Walker: We certainly see gas as a very important fuel for the foreseeable future. We still need it in power generation and as LNG fuel for ships or heavy trucking.

Q: What do you need from policymakers?
Eriksen: Incentives. We have a fairly good picture of where we have to go, but to get things moving, you need subsidies. That will drive deployment of solutions and with it, cost reductions and efficiency gains. Then subsidies can be withdrawn.

And to get modal shifts in transport, for example from road to sea, you need incentives too. For example, if you transport 1kg per ship rather than by road, you could get paid a small amount for choosing a more environmentally friendly solution. Here, it should be the cargo owners who are incentivised. Over time this can be made neutral.

Q: Can Europe continue to lead the energy transition? It wants to be number one in the world on renewables, but it is not a leader in the manufacturing of wind turbines, solar panels, electric cars, batteries.
Eriksen: It can lead on system knowledge. Not, for example, the battery itself, but how it interacts with the rest of the system, its physical operating conditions, its environment. I think that’s where European companies can take a lead. It’s the knowledge within the grid, in a ship or in an offshore installation.

Walker: I think a hybrid grid combining AC with high-voltage DC (HVDC) is something Europe can take a lead on, plus interconnections, also sub-sea. Unlike North America (which has three separate grids), Europe has more or less one interconnected grid including connections across the North Sea.

Q: Will the consumer really take charge?
Walker: Five years from now, the idea of using your smart phone to control your home will be out of date. Your home energy manager will have machine learning in it. The house will learn how you want to live and what you find comfortable. You will only use your phone to interrupt the routine system, for example, if you will be home later than usual. So even at micro level, the consumer won’t be making decisions; it will be a machine instead!

This article has been published first on energypost.eu and is republished with the permission.