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Three ways to thrive through the digital and energy transitions

Yuri Sebregts, Shell Chief Technology Officer, discusses three ways Shell is approaching the challenges and opportunities of the double transformation the energy industry is going through: digitalisation and the energy transition. This blogpost summarises a discussion with Tim Ensor, Director of Artificial Intelligence at Cambridge Consultants. This was Shell’s contribution to the 2020 edition of the AI Summit at the London Tech Week (scroll down to the bottom of the page for the full recording).

By Yuri Sebregts, Shell Chief Technology Officer on Sep 1, 2020

Yuri Sebregts leads a global Technology organisation of more than 3,000 people, combining technical, scientific and commercial expertise.

The oil and gas industry is one of the sectors particularly impacted by the global drop in demand for energy products caused by COVID-19. How has Shell responded to the COVID-19 crisis?

The ongoing crisis will have long-lasting impacts. To better help society come through, Shell worked hard to keep delivering energy products to its customers. These products are often essential for the daily life of local communities and to ensure essential services can keep running. Together with preserving the health and safety of our staff and the communities in which we operate, the continuity of operations of many industries remained among Shell’s primary concerns.

Our contribution to fighting the spread of COVID-19 also took unconventional shapes. Shell’s 3D printing capabilities were used to create personal protective equipment for health-care workers.i To keep our own staff working safely from home, we had to quickly ramp up our information technology capability for around 80,000 of our employees mainly working from home everyday today.

That is not only typical deskwork that we do from home. One example is that we have inspectors completing some safety rounds assisted by robots from the comfort of their kitchen table. Another is our experts assisting technicians by looking over their shoulders thanks to augmented reality embedded in helmets. Remote inspection at large is reducing the need for travel. COVID19 has accelerated the adoption of digital technology for Shell.

Digitalisation is a clear enabler for your company in these times. While COVID19 has disrupted the world, the pressure to change the energy mix to tackle climate change has not disappeared. What role do you see for digitalisation in the energy transition?

The challenge of the energy transition remains front of mind for us and will remain so. The scope of the required transformation is often bigger than we perceive it at first sight. As individuals, we understand the technological changes needed to decarbonise our homes and private vehicles. But the decarbonisation of industrial processes is harder to grasp. There is a lot of work to do. As a company, we believe we can be an important part of the solution. That is why Shell has set itself an ambition to be a net-zero emissions energy business by 2050, or sooner, in step with society.ii

The digital transition will help progress the energy transition. It will be one aspect of the changes the energy system will go through, along with changes in engineering, physics and chemistry. I am convinced that both transitions impact and reinforce each other. Shell is approaching the challenges and opportunities that these transformations present along three ways:

  1. Collaborating with others. This is essential because no single company, institution or industry can tackle these transitions alone.
  2. Building capability. In order to make the most of these transformations, you need your own technological solutions, on top of others’, to create combined offers to customers.
  3. Giving our customers choice. This is for me the most important aspect. Shell does not decide what is best for its customers.

I have a fundamental belief that the energy transition together with digitalisation are going to be primarily shaped by the choices that customers make.

Let’s start with the first one: collaborating with others. Who do you collaborate with and how?

The energy transition requires changes in the way energy is produced, used and made accessible to more people while drastically cutting emissions. Fundamental changes need to happen across the global economy. The impact a single company can have is limited. Cooperation is therefore essential to develop the digital technologies that help to lower the carbon intensity of emissions of industrial operations across all sectors. Cooperation will also deliver the next generation of low-carbon energy technologies.

In 2019, we launched more than 200 joint research collaborations with universities and research institutes around the world. For example, with the Leiden University and the Free University of Amsterdam (Vrije Universiteit Amsterdam), we look at how quantum computing can be used for the modelling of chemical reactionsiii. We believe this disruptive technology – once it is there - will be a game changer for our traditional modelling processes. This can enable reduced energy consumption of chemical processes, better yields and hopefully more sustainable conversion processes such as photo-catalysis. Photo-catalysis refers to chemical conversions enabled by solar energy. This technology has the potential to reduce the carbon intensity of many industrial processes.

Digital twins have many use cases across various assets.

I am also proud that Shell is partnering with the technology provider Kongsberg to deploy so called “digital twins”.iv A digital twin uses all data from an asset and its equipment. The data is combined in modelling and visualisation techniques to understand how each component behaves across the asset’s lifespan under multiple scenarios. This technology enables operators to understand, predict and optimise the operational performance of their machines. Put shortly, the technology allows you to reduce the carbon intensity of emissions, the energy consumption and the operational costs of an entire facility.

I could have mentioned many other examples of critical innovations in low-carbon energy technology which Shell achieved thanks to cooperating with others, in areas such as green hydrogen, battery technologies and the deployment of micro-grid for the distribution of renewable electricity.

You are heading a large technology team within Shell. How do you ensure that you are building the right capability in digitalisation to set you up for success in the energy transition?

Mathematics and computation have been at the core of Shell’s activities from ever since its foundation over a century ago. A big breakthrough in using computational methods goes back to when Shell led the advance in interpreting seismic data in the 1960s onwards. In the 1980s and 1990s, Shell developed lead capabilities in complex fluid flows dynamics which was essential in designing better processes and equipment over time. Shell stands out in using computational technologies because we can handle a large amount of data and combine statistics together with calculation and engineering in so-called ‘grey-box-models’.

Computational technologies allow us to practise chemistry based on the modelling of complex chemicals reactions rather than on a trial and error approach.

Around 2011, Shell created a mathematics, computation and data science skill group which is now 350 experts strong. Their ground-breaking research are deployed and replicated by thousands of other Shell researchers. I believe that this fast-evolving field is best served with flexible curriculum and career paths. Therefore, we keep strong links with academic institutions and industry leaders to stay abreast of new developments in the field. 

Shell believes that how the energy transition plays out over the coming decades will depend a lot on the choice customers make. How does that apply to your digital transformation?

Giving customers choice is for me the most important of these three ways to deliver the energy transition in the context of the digital transition. I want to highlight two examples of digital services that enable more convenient access to products and services to customers or improve their energy efficiency. If they are adopted at scale by our customers, they can impact positively the energy transition.

Shell has offered its customers the products they want and need for over a century and this remains a priority as we advance in the digital transformation.

In the United Kingdom, Shell Go+v rewards our retail customers with tailor-made loyalty offers. With the permission of our customers, the artificial intelligence solution behind the app uses individual transaction data together with anonymised data patterns to identify their needs and wants. Over 1,5 million users in the UK have signed-up to this platform.

Shell Go+ increases the offsetting of the carbon emissions of the energy products purchased at our forecourts. Carbon offsetting is included at no extra cost for private customers subscribing to the Shell Go+ rewards programme and is a voluntary offer for fleet customers. Nature based solutions are widely acknowledged as an important part of managing the risks of climate change (for example in the IPCC Special Report on Global Warming of 1.5°Cvi). Digital tools are helping Shell to scale up this solution via voluntary customer choices. Carbon offsetting is now also available via Shell Energy – our home energy business in the UK - and we will progressively extend this offering to other markets.

Shell Recharge Electric vehicle

The Shell ChargeWorks program is another example of how we approach customer choice in the energy transition as we develop digital solutions. Shell ChargeWorks develops algorithms for so called “smart charging”: the monitoring, management and control of electric vehicle charging stations with the goal of optimising energy consumption. The algorithm then predicts how long the vehicle will be plugged-in, monitors the grid and controls charging to give drivers the charge they want. The customer can choose to go for the lowest cost, or the lowest carbon intensity of emissions of the power they purchase.

We are now deploying this set of algorithms to the commercial and public electric-vehicle charging markets in the USA and the Asia-Pacific region through our subsidiary Greenlotsvii. In Europe, we are partnering with NewMotion to offer the same service to their customers and we are working on developing new solutions to integrate and optimise electric vehicle charging, battery energy storage systems and solar panels at home.

We have many more digital activities across all our businesses, and we are looking for opportunities where we can replicate these activities and use them at scale – also in cooperation with our business consumers. This will be essential – for example – for the successful reduction of emissions of the cement and steel sectors. I firmly believe that the energy transition will be shaped by customers choices. And what ties the two transitions together is that digital technologies can help us offer to customers the choices that will enable the energy transition. 

Tim Ensor

Tim Ensor is the Director of Artificial Intelligence at Cambridge Consultants. He works with clients across many sectors to help them achieve business impact with world-changing technology innovation. Tim has had a string of commercial leadership roles focused on innovation in fields including telecoms, logistics and energy and working with world-leading AI, robotics and connectivity technology. He's an electronic engineer, Cambridge MBA and optimistic about using technology to make the world better.

About Cambridge Consultants : We specialise in breakthrough innovation to transform business and change the world. From large, multinationals to innovative start-ups, our ambitious clients trust us to solve their most critical technology-based challenges. With 900-plus engineers and scientists, we use AI and advanced analytics to redefine what’s possible and make it reality.

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