Overcoming barriers to innovation

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Our energy market is changing; and to keep up with the needs and expectations of customers large and small, Australia’s energy producers are seeking out and embracing new technologies that improve their operating models. But new technologies can be overwhelming for large developers, and one of the best ways to overcome this barrier to innovation is to work with a trusted industry partner.

The energy industry has traditionally been very slow compared to other industries when it comes to leveraging the potential of new technologies to innovate and improve operational efficiencies.

While in the past, digital innovation in the industry wasn’t feasible due to the sheer volume of data produced that needed analysing, the introduction of cloud storage, big data and more reliable mobile communications has seen digital innovation begin to transform the energy industry.

Wade Elofson, founder of business development firm Powered, said, “Accelerating changes to how we work and embracing new technologies are at the heart of the energy industry’s transformation, with new innovations able to improve productivity, increase efficiency and reduce costs.

“The art to introducing a new innovation is to identify the issues energy producers are having, and to understand how your new product or service is going to help. Understandably, no one wants to introduce risk, aka a new technology, without getting a very clear picture of how the technology will work and how it will ultimately drive down costs.”

Energy industry seeks innovation

Last year saw a focus on innovations that helped drive customer satisfaction, support digitisation and lower carbon emissions.

For example, Origin Energy, Australia’s largest energy retailer, conducted a trial of cloud-based software from a UK-based start- up to predict high price periods for participating customers, and then shift non-critical load into times of the day when prices arelower.

Analysis of the trial showed that price was very strongly correlated to carbon intensity, with high pool prices signalling periods when carbon intensive generators are working. Avoiding these periods helped to lower the carbon footprint of these customers,
achieving carbon savings of up to 21 per cent on assets where the technology is being used.

Origin also received a grant in September 2018 to develop the first virtual power plant in Victoria.

Jemena, who recently completed their Northern Gas Pipeline project, is innovating in the hydrogen sector. It’s Power to Gas trial, Project H2GO, will convert solar and wind power into hydrogen gas, via electrolysis, which will then be stored for use across the Jemena Gas Network in New South Wales, the biggest gas distribution network in Australia.

And Santos announced in December 2018 that it would convert 56 remote crude oil beam pumps at the Cooper Basin to solar and batteries to reduce emissions from oil production after a successful Australian first pilot installation.

Santos Managing Director and CEO, Kevin Gallagher, said this Australian-first idea came from the company’s Energy Solutions team, which is dedicated to finding innovative ways to reduce Santos’ carbon footprint and prepare the business for a lower carbon future.

APPEA Chief Executive, Malcolm Roberts, said the project sits alongside a range of other innovations the oil and gas industry is taking across the country to reduce its emissions.

“The oil and gas industry already makes a significant contribution to emissions reduction by producing cleaner energy for domestic gas customers and export customers in Asia,” Dr Roberts said.

Barriers to innovation

Associate Professor of Technology Management and Strategy at Queensland University of Technology, Dr Robert Perrons, said traditionally, there have been a number of barriers to innovation within the oil and gas industry.

“One of the things that gets in our way is the asset longevity. When we put an asset down in the resource sector, we’re expecting that thing to churn away and make money for us for 30, 35, 40 years. That makes it complicated from a technology-refresh point of view,” Dr Perrons said.

“Number two is the consequences of failure. When things go wrong on an oil and gas platform, or at a mining site, people are going to get hurt, there could be horrible environmental damage and billions of dollars of liability.”

Dr Perrons also said that the equity structure of assets also precludes innovation as a competitive advantage.

“The ownership structure for a platform usually looks like a pie chart, where one company might have 30 per cent, another have 20 per cent, etc. Very rarely does anyone own the whole thing all by themselves. Say one company invents this fancy new widget, the rest of the pie chart can very reasonably ask ‘what’s that new thing you just put on our billion-dollar investment?

“When you tell them, they think that’s a pretty good idea, and they go home and reverse engineer it for themselves. So you just invested a lot of money into research and development, and now everybody in the tribe gets the benefit of that, but you’re the only one still footing the bill.”

Innovation meets collaboration

When there are a number of reasons not to invest in a new technology, a trusted industry partner, such as Powered, can act as the perfect conduit between large-scale developers and the smaller innovators that tend to be able to offer the disruptive technologies that can be so beneficial to the industry.

Having worked in the energy sector for five years, connecting developers with new technologies, Powered has sold dozens of innovations to major companies operating in the energy sector. Powered leverages its access to companies such as Santos, Origin, Jemena and the APA Group to connect them to new or smaller businesses who might have a new invention, innovation or technology to bring to the market.

Powered’s Wade Elofson discusses potential growth strategies with a client

“At Powered we have introduced several new technologies into the Australian oil and gas market. We have seen firsthand how some new technologies and processes can help reduce the cost of energy production,” Mr Elofson said.

“Whether creating new products, new internal processes or entirely new ways of doing business, companies must consistently innovate to survive in today’s ever-changing business climate.

“We have the established industry relationships which allow us to communicate this reality clearly to the big players in the industry.”

This partner content is brought to you by Powered. For more information please visit poweredaus.com.au/

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