Digitalising decarbonisation: Three ways digitalisation can help create cleaner energy pathways

Back in the early 2000s, I was living in Houston. In a state like Texas, your thermostat is an important piece of home tech, especially during those hot summer months. At the time, Shell was working on a web-based home management system. A pre-cursor to smart meters and smart speakers, this device let you control your temperature, lighting and even some appliances.

I must admit I became quite attached to that thing. It was easy to use and showed me how much energy my household was using. It even helped cut my monthly energy bill by 20%. And it did so by combining the management of energy usage with data transparency, and with a simple digital interface on the computer instead of adjusting the thermostat directly. Something that is now relatively common, but back then was revolutionary.

Equally today, digitalisation is having a huge impact on how we manage our energy use. And for good reason too, since this will dictate how society deals with the most seminal challenge of our time: decarbonisation.

The decarbonisation challenge and our response

To help accelerate decarbonisation, companies and governments are setting ambitions to achieve net-zero. At Shell, for example, we have a target to be a net-zero emissions energy business by 2050, in step with society’s progress in achieving the 1.5°C goal of the UN Paris Agreement.

But these targets can sometimes seem quite distant in their timescale, so what is Shell actually doing today to get us to that point in 2050? A lot of our work falls under three key approaches: collaboration, policy and digitalisation.

As head of Shell’s new Sectors & Decarbonisation business, I wanted to share some thoughts on how digitalisation can act as a lever for companies, including Shell, to pull now to start driving long-term decarbonisation action.

Increasing energy efficiency

Arguably, the most important impact digitalisation can have on decarbonisation is to increase the energy efficiency of products, processes and people.

When considering the bigger picture, Shell is still in the relatively early stages of this digital journey. However, there are a few projects where we are seeing the benefits digitalisation is having on the energy efficiency of our customers’, and our own, operations:

• InstaFreight – Shell invested in InstaFreight and has now contracted with this digital logistics platform to organise transportation of Shell lubricants from Germany to Shell warehouses across Europe. AI-powered digital brokerage capabilities, combined with better visibility across the supply chain, have the ability to raise overall efficiency of road transport from 40% to over 60% by reducing empty miles and improving utilisation, resulting in lower CO2 footprint (Source: Frost & Sullivan Analysis, 2019).
• MachineMax – Operators can track entire fleets of machinery to help them stay on top of machine idling, fuel efficiency and equipment utilisation. It combines everything from sensor technology and cloud computing to artificial intelligence and telematics, maximising efficiency and lowering emissions by cutting out wasteful on-site behaviours.
• Shell immersion cooling fluids – Data centres are a fast-growing source of global energy consumption. Shell has partnered with Asperitas to provide synthetic fluids made using our gas-to-liquids technology as part of their immersion cooling solution for data centres. This helps capture up to 98% of the energy put into the system as heat, before reusing it to generate warm water that can be used by surrounding communities for residual heating.

And then of course there are various ways we use digitalisation in our operations to reduce our own emissions, such as energy monitoring systems in our lubricant plants to better track and reduce electricity consumption.

Improving carbon management and transparency

As my own experiences prove, measuring and tracking carbon management is critical to evaluate progress of decarbonisation pathways, and digital technologies like blockchain can make it more effective through added transparency. For Shell, we are building capability in blockchain and aim to help support finding solutions for the energy transition.

Perhaps the most notable use cases currently revolve around:

• Carbon offsetting – We are exploring blockchain as a way to ensure the validity of carbon credit programmes by tracking the progress and effectiveness of nature-based solutions for carbon capture or avoided emissions, and preventing double counting carbon credits.
• Hydrogen tracking – We are looking at blockchain as a way of verifying that hydrogen comes from sustainable sources, ultimately working to encourage the wider adoption of sustainable fuels.

And thanks to the transparent and effective use of data, these processes also help to build trust in decarbonising actions, which is why Shell takes a data-driven approach towards sustainability. One good example is the Supplier Energy Transition Hub launched in April. This platform, developed in conjunction with Microsoft, helps suppliers define and estimate their emissions reduction ambition, by translating data into company-unique decarbonisation plans.

Driving digital collaboration

Which brings us on to collaboration, another significant opportunity for digitalisation to support decarbonisation.

I say this because the degree to which digital technologies can bring organisations – and their customers – together is likely to define much of society’s success in reducing industrial emissions.

Real change will not be achieved in siloes. We all know that. This is why Shell is so strongly committed to collaborating with others on this digitalisation journey:

• Microsoft – Last year, Shell and Microsoft announced a strategic alliance to further accelerate innovation in support of decarbonisation and energy industry transition. In April, we shared how this alliance is progressing at pace with initiatives including artificial intelligence and new digital tools. And we continue to work together to deliver new solutions to customers in support of their own energy transition and carbon reduction ambition.
• SAP – This month, Shell and SAP announced that we will partner to: support the energy transition; explore carbon avoidance, reduction, and offsetting models, as well as footprint tracking; and accelerate data transparency. We will start with a focus on embedding carbon offsets in supplier management software, while laying the longer-term technological foundation for a more sustainable business.
• IBM (Oren) – To help solve mining customers’ issues around data aggregation, the energy transition and emerging technologies, we co-created Oren – a digital B2B marketplace – with IBM. Oren also allows different technology companies to collaborate on its open platform to create even stronger integrated solutions.

It is early days for some of these projects, but this is precisely the kind of digital innovation and cross-sector collaboration that we will see delivering positive change and improving lives moving forward.

How can we work together?

Going back to what I said at the start, digitalisation can act as a lever today to start driving long-term decarbonisation action. But success is highly dependent on making these technologies accessible to customers and sharing them throughout our sectors.

Just like my home management system in Texas – until the technology is available to you, you often don’t know you need it. And if you’re anything like me, once you have it – and can see the benefits – you’ll want to keep using it.

We need to decarbonise. Driving long-term decarbonisation action and supporting our customers through the energy transition are key priorities for my team and I. We are always looking to work together with others in the industry on new ideas, technologies and business models to deliver decarbonisation pathways that are viable, accelerated and make commercial sense. Please get in touch if you see an opportunity for collaboration, because together, I am confident we can accelerate the journey towards net zero.

For more information on digitalisation in Shell, visit: www.shell.com/digitalisation