by Agata Kozielewska, Senior Industry X.0 Analyst, Accenture
It is a common belief in Poland that the country’s biggest innovation advantage lies in the bright young generations of high-tech specialists. It is not without reason, since Poland ranks 22nd globally according to Bloomberg’s 2019 Innovation Index, mostly due to the large number of students in tertiary education, and density of engineering and technology choices.
The high-tech sector is dynamically growing and, according to the Ministry of Digitalization, by 2025 the IT sector in Poland will employ an additional 200,000 IT specialists, conservatively speaking. Nevertheless, when it comes to digitalization, Poland still needs to play catch-up with its European peers. According to the European Commission’s Digital Economy and Society Index, Poland has not made any significant progress in terms of adoption of digital technologies for three consecutive years. The country ranks 25th out of the 28 EU member states, with a performance well below the EU average.
Government to the rescue?
It is not a surprise then that digital transformation has climbed up the political agenda. In 2019 the government set up the Future Industry Platform as a national initiative to support and encourage further digitalization of the economy. The primary role of the new organisation is to raise awareness among companies in Poland about opportunities that novel technologies can bring about. Although there are numerous IT solution providers operating on the domestic market, home grown companies have not been overly zealous in embracing them. A survey conducted by Computerworld in 2019 showed only one in three companies used Big Data analytics and Cloud technologies, for instance. Why not, you may wonder? Money is one thing, coupled with a shortage of other precious resources such as time and skills.
Another very much expected national initiative is a central data hub, a new body that would manage all metering data in a centralized manner. The plan to establish the Energy Market Information Operator, a new body to be governed by PSE, has been already included in the draft amendment to the Energy Law, which is currently in the legislative process. The lack of centralized metering data management poses a challenge, which has been so far addressed in a fragmented manner. “When it comes to energy we know what we supply only if it is measured, but this is not easy to get clarity on in Poland - it takes about 15 months to get a proper understanding of the electricity volumes that we have supplied. There are many initiatives to address this shortcoming but they are individual, whereas what is needed is a central body approach.” says Maciej Kowalski, Managing Director of Enefit.
The level of adoption of digital technologies varies sharply among industries though. For example, Poland boasts an ultra innovative and digitalized banking sector, which has been the number one client for IT providers nationwide. What is more, sales of IT solutions in the banking sector increased by over 20% in 2018 compared to 2017. The energy sector, however, has been a rather closefisted consumer in this respect, despite a wide array of tools already available on the market.
COVID-19 and sustainable recovery
The situation is changing though, as environmental regulations on the one hand and consumers expectations on the other make the power industry shift towards a low-emission aspiration. COVID-19 is another factor that will push companies towards fast-tracking digital transformation. Working from home and remote production management have become a standard enabled by digital technologies.
As most other industries, the energy sector has also been severely hit by the crisis and the full array of implications of the pandemic on the energy systems are still unknown. But never let a crisis go to waste. As the International Energy Agency notes, energy security, resilient energy systems and the clean energy transition “must be at the center of economic recovery and stimulus plans”. Energy companies, therefore, need to find a way to stay alive and adapt while keeping it clean(er), and efficiency is one way to go about that.
The unknown carried by the pandemic impacts all energy sources and technologies. The highest uncertainty surrounds the coal market though. While in general, the demand for energy has fallen, renewable energy has been “largely unaffected”. Therefore, it is very likely that COVID-19 will accelerate the phasing out of coal. “It is still too early to determine the longer-term impacts, but the energy industry that emerges from this crisis will be significantly different from the one that came before” says Fatih Birol, the IEA’s executive director.
Therefore, energy producers invest in both renewable energy installations and digital solutions like Internet of Things, advanced data analytics and AI technologies to increase energy efficiency across the whole value chain of power generation, regardless of the source of energy they produce power from.
With the increase of green energy production capacity, among power companies came the realization of the need for new solutions to better generate and manage it. Energy storage is still the holy grail sought after by the industry, as it is necessary to ensure power quality and voltage stability. Moreover, a reliable storage solution would also help power generation companies manage and predict sale volumes and make renewable energy more profitable. As Marek Roszak, Country Manager Poland at DNV GL Energy explains “Having the ability to store energy will allow energy producers to sell when energy prices are higher, and help optimize their financial models”.
Clean coal: an immediate “must have”
Despite the renewable energy boom, coal is still the main source of energy generation in Poland. To reduce emissions, energy producers invest in clean coal technologies to meet CO2 emission standards. ”We are now using the most modern technology to capture methane and use it for electricity generation”, says Artur Dyczko, Deputy Chairman of the Board for Strategy and Development at JSW. ”Hydrogen separation from coking gas is also one of our ongoing projects - the intention is to join the producers of this ultra pure gas, called the fuel of the future”, he adds.
Another challenge for the coal industry is to reduce ecological damage caused by mining. The answer lies again in technology. For example, the implementation of the digital mine models allows to acquire information from the drilling, seismic prospecting, radar scanning and so on, and to form the initial coal mine geological data model. In the next step the information, such as mining development, roadway layout, ventilation, and safety monitoring and control, is fused. What is more, the information acquisition and fusion technology can be strengthened with the right use of IoT, automation and big data analytics. Automation also reduces the need for manpower, which renders the system safer and more resilient.
On the other hand, from the mining community’s perspective, staff reduction is rather a threat than an opportunity and has been usually one of the main barriers restraining low carbon transition in Poland. “People are afraid of change. Will they become truly open-minded about welcoming change in the near future? Time will tell”, says Jan Bondaruk, Deputy Director for Environmental Engineering at GIG (Central Mining Institute).
There is no doubt, however, that changes are coming. For example, the deployment of renewables is making green energy distribution more flexible, as it requires constant data exchange between a myriad of energy producers, including prosumers and energy buyers. The desired solutions should automate these processes and be able to detect system failures. “We see growing interest in automation of processes in control systems in the energy sector, for example in micro-grid management and energy distribution” says Pawel Lojszczyk, Managing Director of ABB Power Grids Poland. A good example of this type of effort is represented by Tauron, which in cooperation with MC2, a startup, developed a client application that will enable flexible sale and purchase of green energy.
Tauron is also working on a solution for ultra-fast forecasting of electricity production capacity. This solution will also be able to detect sudden fluctuations in photovoltaic production caused by changing weather patterns. The new technology combines the use of IoT and advanced data processing algorithms.
Also PGE seeks digital innovation by investing in startups. Its SpeedUp Venture Capital Group invests in startups and technologies seeking to help manage and optimize renewable energy micro-installations, increase the efficiency of large-scale RES installations, or boost the efficiency of energy storage. Ideal protegés that PGE is looking for are startups working with such technologies as Blockchain or IoT.
In Pursuit of Energy Efficiency
Even though renewables are a global megatrend now, in the case of Poland going green must be equally reliant on energy efficiency for the time being. Although over the last decade the country has witnessed a huge progress in energy efficiency, there is still a long way to go and it concerns the entire economy.
Poland uses 2 kWh of primary energy for every dollar of GDP generated, while Germany, France or Japan use half as much. The study run by Warsaw University of Technology indicates that about 80% of the equipment used by domestic companies is in dire need of modernization. This unexploited potential represents a significant business opportunity for digital solution providers.
Also, huge potential in energy saving can be found in residential buildings. Many houses in Poland still use old and inefficient boilers, which are often fed with solid fuels. Despite some progress made since 2005, the overall improvement of the energy efficiency in the residential sector has been lagging behind the EU average.
At the same time it is estimated that the energy consumption level will shortly significantly increase, especially in the event of an electromobility boom, announced by the government. Forecasts made by the Industrial Development Agency say that households’ energy consumption will double, assuming there will be only one electric car per house. And if there are two - it will triple. Bearing the above in mind, it is clear that energy efficiency should be the number one priority for all – the energy sector, the industry as well as households. “Poland is currently developing great combinations of artificial intelligence and automation systems that can improve energy efficiency. Smart regulation systems can be very cheap whilst achieving great energy savings” – says Marek Amrozy, Director of the Energy Efficiency Department at National Energy Conservation Agency.
Digital technologies make the economy not only more productive and innovative, but thanks to significant energy efficiency gains also help to make it more sustainable. And data has replaced oil as the world’s most valuable commodity.
READ FULL REPORT: Poland's Energy Industry 2020
* These views are only those of the author and do not express the official position of Accenture
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