Smart grids are critical to net zero

Speaker A: It might feel distant, but 2050, the deadline for achieving net zero emissions is closer than it seems. To meet this monumental challenge, industries are rethinking how energy is generated, distributed and consumed. And one way to meet that goal is rebuilding the electricity grid. Grids globally are in dire need of upgrades anyway. And with one third of global carbon emissions coming from electricity and heat generation, it's an opportunity to not only build a more efficient grid, but to help reverse the damage to the environment. Meet Liana Alt. This lifelong engineer is helping companies like Nokia and its partners meet their net zero targets to make the grid smarter, efficient, greener. I'm Michael Hainsworth. On this edition of the Network Effect, we'll explore the technology, collaboration and bold thinking needed to reshape our energy systems to meet the net zero challenge. The big question is, what will we make it?

Speaker B: Good question. Yes and no. I think it's going to be very difficult to make it. Um, it's going to take more than just energy efficiency. It's going to take not only reducing our carbon footprint, but also being a handprint as well. So removing carbon from the atmosphere, not just cutting our emissions.

Speaker A: There seems to be, uh, a belief that technology is part of the problem. But you've concluded that technology is part of the solution?

Speaker B: I think it's both, really, Michael. Um, so technology absolutely does consume a tremendous amount of energy and is a concern, I think, from an emissions standpoint, especially, uh, across the entire ICT industry. However, technology is also part of the solution when it comes to how we optimize grid assets, how we help with load control, how we help with generation and forecast generation, and also even resiliency and storm recovery.

Speaker A: Artificial intelligence receives a lot of criticism for its power consumption needs. Is this the biggest growth in energy consumption over the the next decade, or, or is it the electric car?

Speaker B: That's a really great question. And I think that surprisingly, it's most likely going to be AI. Now, not all AI is created equal. Obviously generating images takes a tremendous amount more energy than generating text, for example. However, um, the one challenge is the exponential growth of AI was not something I think, that experts really considered over the next forecast. So now we're scrambling to figure out how are we going to serve this load and what does that really look like in the long term and what

Speaker A: are the answers to those questions? Do you have them?

Speaker B: If I had them, I probably would not be here interviewing with you.

Speaker A: So.

Speaker B: No, I think there's a combination. Obviously we want to be sustainable. Um, the headlines have all been talking about uh, different web scalers that are looking at things like small, uh, modular reactors, um, for nuclear to power. These data centers, I still think that those become assets, those data centers actually become assets. When we start looking at things like heating districts and reclaiming that heat and doing combined heat and power solutions, they can also be treated as, uh, as an asset or generation storage facility as well as load.

Speaker A: So it sounds like there's really ultimately no one silver bullet for fighting climate change. Each industry is unique. But uh, what I love about technology is that when we take different bits of technology and put them together, we get new and unexpected solutions and ideas and gadgets. Um, how is that working out? And then what about the other element to bringing things together, which are people? How does the network affect, of bringing people together help address climate change?

Speaker B: That's a really good point. And I think when we talk about bringing people together, energy and climate change is something that across the board impacts everyone and every industry. We all depend on electricity for our daily lives and now for, you know, paying our bills online, for banking, for driving our cars, and even for, you know, communications, like what you and I are doing today. So I think it's really important for us to acknowledge that it's going to take more than one company and no one person, no one vendor has the answer. But collaborating together and bringing that thought diversity and cross pollinating ideas across different industries really helps bring together the greatest minds and create those solutions that can help overcome climate change. For example, when we look at different types of industries like manufacturing, or we look at the telecommunications industry and the role they play not only in load, but also in what we call power flexibility and using thermal storage and thermal processes within a plant so to help offset the need for power in other places by um, load shifting. So I think all coming together is part of that effect. Now anything that we want to monitor, measure, control or collaborate on is going to require obviously communications. And that's I think, where Nokia has a very, very strong play in the breadth and the foundation that we offer in our, in our telecommunications portfolio.

Speaker A: And I can imagine that when we talk about the network effect of bringing people together, bringing technologies together, um, we're not just talking about creating a solution as a group, but also dealing with things like supply chain management. You want to ensure that maybe you're as an organization focused on net zero, but if the suppliers and vendors within uh, your ecosystem are not, we're not actually solving the problem, we need to do it together.

Speaker B: Correct? Absolutely. And I think another piece of that is the Data sharing. Right. So consuming data or storing data for our AI learning models, those that all takes energy to consume that data and to store it and to then to, to train those models. And I think if we can share that data amongst each other and share the data between vendors and between customers and partners to be able to overcome some of those challenges around silos of data. It's also another way that we can get together and start solving these problems around climate change and sustainability.

Speaker A: I love the fact that we're having this conversation at Nokia Bell Labs where you're focused on solving this problem. And since you're the only one in the demonstration area. The lights are off.

Speaker B: The lights are off. Yes, yes. So, um, normally we do have climate control in here. This is our innovation showcase where many, many of the new, uh, the new and old innovations of Bell Labs are showcased for our public to come and see and to visit and students and our workers. So it does, um, kind of highlight the various inventions that Bell Labs has, even a solar cell that was developed as a prototype in the 1950s specifically to power telecommunications in remote areas. But we have a long history actually in power in different ways.

Speaker A: Technology, while energy intensive, emerges as both a challenge and a solution to meeting our net zero goals. From optimizing grid assets to managing renewable integration, innovation holds the key. With the exponential energy demands of AI surpassing even that of electric vehicles, we need smarter data sharing across industries. Collaboration is essential. No single company or sector can solve the climate crisis alone. But by bringing those diverse minds together, leveraging thermal storage and integrating renewables like wind, solar and hydrogen, we can build more resilient energy systems. But it isn't just about the technology. It's about transforming the mindset, working collectively to secure a sustainable future. But to do that all tells me we need digitalization to make up for lost time.

Speaker B: Digitalization helps enable us to make up for lost time through forecasting and scenario testing with digital twins. By creating a twin of the grid and twin of the assets in consumption, we can actually now optimize how we use energy, where we use energy and when we use energy to make more use of the renewable generation that's available and the storage.

Speaker A: So when we do that digital twin creation, um, there's an electrical cost associated with that. But ultimately the idea is that we can experiment with what does and doesn't work. We can use artificial intelligence to help augment that exploratory, uh, work, um, all without actually having to flip a switch until it's time to do so.

Speaker B: Correct. And again with the digital twins we're looking at, um, what we do specifically is looking at flexibility models. And so it's not necessarily training on large data stores, it's looking at streams of data and doing analysis on streams of data so we don't have to collect and keep and store data for an infinite amount of time. But AI absolutely plays a part here. Again, it's going to be potentially distributed. Rather than having large control centers, we're looking at bringing the processing to the edge where that needs to be done. Which also alleviates any constraints on telecommunications networks. When we look at the number of data points that we're collecting, a lot of this is happening at the edge of the grid with vehicle to grid, with heat pumps, with distributed storage and batteries, um, behind the mirror assets. A lot of that is there at the local level. And so the more we look at distributing that type of compute, the less likely we are to have a massive impact on a single part of the grid or a single data center.

Speaker A: When we think about the grid, um, it's often said that we need to transform the grid because well we, the technology is ancient. We've got smart, uh, cars, we've got the data center issues, we've got demand and the supply isn't there to meet it. And that's why we need to transform the grid. How critical is transforming the grid though, to reach net zero goals?

Speaker B: Yeah, I think transformation of the grid, um, to reach net zero goals actually has been occurring um, for quite some time, especially here in the US it's very, it varies based on the country or the region that you may be in, how mature the grid is and how much of an element of intelligence is within that grid. Um, here in the US we still have a model that's very driven from centralized large utility scale generation to transmission to distribution. We're seeing a change in that. Yes, we see a larger impact over in Europe where these assets are highly distributed into the distribution grid. And therefore the intelligence needed to typically which existed in the transmission or the high voltage grid needs to come down and needs to actually be placed and installed in the low voltage grid at the delivery or the distribution phase, um, area. So I think it's something that we have to transform into, um, it's not necessarily a cut and dried for each country, how they want to handle that. So it is very dependent upon what that looks like. Renewable assets typically behave differently as well. So when we talk about intelligence, we're talking about rather than just spinning up resources and generating to meet demand, we need to think Differently about the demand and how do we massage the demand in order to take advantage of local resources first and those that are renewable first?

Speaker A: Well, tell me about the renewable component, um, to this, because solar, wind, hydrogen, they all have their shortcomings and critics tend to talk about them in isolation. I suppose, though they do have a role to play in, in grid transformation, not individually, but as a collective.

Speaker B: Yeah, I think you're right. I think most the time when you're looking at as an independent power producer or as a grid operator who's looking for generation, they're going to look at assets, especially renewable assets and storage in a way that complements each other. So when the wind's blowing some typically you don't have sun. If you've got lots of wind, you don't have enough transmission capacity to essentially absorb that wind and use that wind because the load or the demand isn't there. So being able to utilize hydrogen to store that excess capacity from the wind is one way of looking at how you complement these resources between each other. So especially with renewables, it's really critical to look at having what you would consider a microgrid type of scenario where you have multiple assets that are tied together and working together to complement each other to meet the load in that particular area.

Speaker A: And that just brings us full circle back to the need for communications infrastructure, for all these components to talk to each other.

Speaker B: Absolutely. Communication infrastructure and again, edge compute. When we start thinking about these assets, how they work together, um, you want to be able to switch between these assets very quickly. So that could be wireless, that could be, um, fiber, it could be any kind of telecommunications. It's usually fairly independent, depending on latency and what the need is for those particular assets. But communications, absolutely critical for those assets to work together in a harmonized way.

Speaker A: Digitalization is a powerful tool that helps us make up for lost time in the race to meet our net zero goals by 2050. Digital twins enable scenario testing and optimization without physical trial and error. By analyzing real time data streams rather than storing massive amounts of data, these models drive efficiency while minimizing resource use. Distributed grids, particularly in Europe, where low voltage networks are integrating renewable energy are a solution. Renewable resources thrive when networked together. Like wind generated. Surplus energy can be stored as hydrogen, ensuring that we have energy regardless of the conditions. This approach isn't just about building smarter grids. It's about rethinking how we manage demand and prioritize local renewable energy. With digital tools and collaborate strategies. The grid's transformation becomes a Cornerstone for a sustainable energy future. And that just brings us full circle back to the need for communications infrastructure for all these components to talk together. We think often about the transformation of the grid being about hardware, gear in a box on a pole, that sort of thing. But what role do data and analytics, the software side, the data management side side play in advancing grid transformation and helping industries achieve their sustainability goals?

Speaker B: I think there's two ways that that happens. So first in the grid we're always going to have hardware, we're always going to have hardware as a backup. And that last source of physics, really the physics require hardware there. Um, I think though, as we look at the circularity of our equipment, as we look at the aging of our equipment in a grid, you're typically looking at infrastructure that's, that's on the books for 40 to 70 years, depending on what that is. Yes. So a lot of these transformers or these conductors, um, are on the books for a long time and are assets in use for a very long time. We're not used to that in ICT where you're looking at replacing some assets 7 to 10 years, 15 at the very, very most. So I think software based networks, software defined types of solutions, which could be in a SaaS model, it could be um, you know, in a Docker container or Kubernetes cluster, things like that, where they're more software driven allows us to sweat those assets, that hardware a little bit longer. Um, but we also need to be able, uh, in the grid we need to be able to get the communication and the status of those assets that are the hardware assets. The transformer monitoring is a very big deal. Um, how do we make sure that our lines are healthy and how can we squeeze a little bit more electricity onto those lines when we're in constrained scenarios? And even how does heat impact the ability to, to transmit the electrons across a conductor that even plays a role. So utilizing data and analytics from the transmission level all the way down to behind the meter I think is really going to be critical. It's just a large ask to ask utilities and, and uh, the grid operator to step into that role. It's not necessarily what they always have done. Their job is to keep the lights on. But we're, you know, we're starting to look at them embracing, many of them are embracing this new digital technology to help them do their job.

Speaker A: I feel like there's an analogy or a similarity between the electrical grid, uh, and the energy industry and the telecommunications industry because Nokia disintermediated a lot of its hardware into software for the flexibility that comes with that. With 5G and 6G, these seem to be critical technologies that Nokia is investing in to support uh, a smart network energy future.

Speaker B: Yes, I think that there is definitely a tie between telecommunications and the path that telecommunications has taken, as well as what the grid infrastructure is now taking in a multitude of ways. From a regulatory and a policy standpoint, all the way down to how we design equipment and what that equipment's capable of doing. We are seeing a lot more interest in software defined relay software, defined components that allow them again to not only maintain or uh, sweat those assets longer from an economic standpoint, but also to maintain fewer box assets. So you know, it's fewer widgets in the substation and if you've ever been as a substation, the footprint and the real estate is a very much a premium. And so the less we, the less equipment we can have in there, the better off we are from a cooling perspective as well.

Speaker A: If Grid 2.0 requires AI and IoT integration, what are some examples of industries that have seen a significant shift in energy efficiency due to these next generation technologies?

Speaker B: That's a really good question. So other industries who've starting to see a shift due to those technologies, I think that we're still very early in a lot of those phases. Um, if you look at some of the optimization we get with electrical vehicles, I think that's there when we talk about hybrid vehicles and how they're utilizing technology to make the most of your battery. A lot of times your cars are telling you how fast to drive or slow down or don't brake so hard because it's actually tracking how much electricity you're using. And when does that, you know, when does your, your fuel motor um, kick in? So there are some ways that even our vehicles are already using AI to help make some of those decisions. I think if you look at other types of scenarios with manufacturing plants and mining, I think mining is a great um, really a uh, great uh, industry to look at. When they're automating so much of their um, processes with the drilling and the trucking, et cetera, they're really looking at ways to make the most out of the assets that they, and to utilize um, sensors and the communications network as well to make better decisions to save time and make their operations more efficient.

Speaker A: You pointed out that the data is the critical part to ensuring that we have Grid 2.0 and ensuring that even companies that rely on Grid 2.0 can get their own net zero goals achieved how can industries ensure the data they collect is used effectively to support their sustainability goals?

Speaker B: Oh, that's a, that's a good question. And utilizing data, I think it's a good point that utilizing data to meet those net zero goals, it's important. First of all, it's your point, making sure that you have good data and the results you're getting from the models that you're training are accurate. I think there's always need to be a human element there to help check and double check and to see are these really accurate. So I think that, that there's two parts to that, right? AI can't necessarily learn everything on its own. Um, we do have to have some guidance to train it on what it's looking for, et cetera, and it's going to take some time to get there.

Speaker A: What's the key takeaway for industry entering this shift to a new energy era? When it comes to leveraging the network effect to meet our net zero goals,

Speaker B: I think knowledge is power. Um, very truthfully, I think utilizing the assets that you have, not only the telecommunications assets, but the energy assets that you have at your location is something really important to understand. Whether you're a web scaler that's looking at your lowering your consumption, whether or utilizing waste heat or whether you're in fact manufacturing m facility that's looking at ways to shave the peak off of your consumption or to load shift some of your processes to be more efficient. I think understanding first, what, what are you trying to accomplish? How do you get the data? Where does the data exist? Does it exist? If it doesn't, you have to find some way to get that data and then start looking at use case by use case. What exactly are you trying to accomplish with that? So we think about, you know, lowering your offex and that's a big piece for a lot of ICT industry as well as manufacturing. But again, looking at it a bit differently and shifting our thinking to say what more can I do? If I'm putting in um, a backup system, can I create a little bit of revenue with that by participating in some of the different markets for ancillary services? So I think it's really around strategically thinking about how we spend our capital dollars, how we build out things like backup assets and then what we want to do in the long term.

Speaker A: I think if there's one question that's gone unanswered so far in our time together there at the Nokia Bell Labs Innovation center is what on earth is that giant machine behind you?

Speaker B: That giant machine actually is a video projector, movie projector that has sound added in. So I believe it's from the 1920s. And it's one of the first, um, movies, uh, going from silent movies to sound movies, where Bell Labs actually developed a technology to add the sound to the silent movie. So we were no longer in the dark having to read, uh, what the plot was. We could actually hear it.

Speaker A: So in other words, you and I wouldn't be having this conversation if it wasn't for that box behind you.

Speaker B: Correct. And probably several other boxes that are in the showcase. There's several here are the first transistor, the solar cells, as well as fiber optic cable, et cetera. There's a lot of different innovation here that Bell Labs is responsible for that sometimes we don't even know that we use in our daily lives.

Speaker A: Leanna, thank you so much for your time and insight.

Speaker B: Thank you so much, Michael.

Speaker A: Achieving net zero emissions by 2050 is a daunting challenge, but Leanna believes it's possible with the right approach. While technology is often seen as part of the problem, she argues it's a critical part of the solution. Tools like artificial intelligence and digital twins can optimize energy use and help build smarter grids. Even though their growing energy demands are a challenge, collaboration is essential. The network effect that comes from industry partners sharing data and working together to overcome silos and inefficiencies will be critical. And building those systems with innovation and individuals will meet sustainability goals to build a resilience, resilient future. I'm, uh, Michael Hainsworth. This has been the network effect.