Peter Wilson, Executive Industry Consultant at Hexagon Asset Lifecycle Intelligence, highlights the challenges facing the renewables and hydrogen sector.

Q: How have plans for modernizing and/or upgrading existing power plants and increasing renewable energy resources changed in the last 15 months?

Over the past 15 months, we've witnessed a phase of "climate stuckness", to borrow a phrase from Pilita Clark. There is a broad consensus that hydrogen and renewables have the power to decarbonize our economies. The case of Denmark, for example, shows that renewables can work at the scale of a country - and hydrogen has the potential to finally decarbonize sectors that are major CO2 contributors, such as steel or transportation.

But today, we are at a turning point. The ecosystem has largely grown in a period of zero interest rates or ZIRP, and low inflation, and that tide has now turned. The combination of higher interest rates, stubborn inflation, and the economic aftermath of the pandemic is going to make the next few years much more testing.

Governments are reassessing their spending, which could lead to reduced funding and backtracking on earlier commitments to renewable energy projects. Fossil-fuelled power-generating plants that were mothballed for decommissioning have been pulled back into service; as an example, Germany has created a ‘gas replacement reserve’ of 11.6 GW using Coal, until 2024.

So the challenge of the past few months can be summarized as follows: for renewables and hydrogen, the time to accelerate is now or never - but there’s less tolerance for risk and less money floating around.

So how do companies emerge from this period? Even with these challenges, it's crucial to note that this is a time of opportunity. Those who leverage digitization and streamline their processes to achieve greater quality and reliability and compress project timelines will come out on top.

Q: How is Hexagon rising to the challenges, in particular with your Smart Digital Reality?

Hexagon's Smart Digital Reality™ is at the forefront of addressing these challenges. Today, we’re working with actors of all sizes - from small engineering outlets to mega-projects and major operators - across nuclear, solar, wind, hydropower and hydrogen, among others.

From the initial design stage, our solutions like CADworx® and Intergraph Smart® 3D offer advanced tools for designing wind farms, solar power plants and the specialized equipment needed for hydrogen. We just unveiled our CADWorx Electrical and Instrumentation Design Suite, an electrical design solution that meets the specific needs of high-voltage electricity generation, transmission and distribution design. It’s digitally integrated with project and asset management to feed a digital twin across projects and operations.

And today, this integration is transformative to get projects off the ground faster and reach profitability sooner.  For example, recent mega-projects such as the Eyre Peninsula Gateway project in South Australia, developed in partnership by H2U and Hexagon, have fully digitized their plant construction process: an integrated digital twin platform centralizes all information, from engineering and design through finance, construction and operation.

Q: What do you see as the “skeleton in the closet” for wind power?

Ten years from now, wind power will have a problem in common with oil and gas: the ballooning cost of decommissioning. Today, several oil and gas companies face the prospect of billion-dollar decommissioning projects for their oil rigs.

For the wind industry, the question will be: how we dispose of older-generation wind turbine equipment like turbine blades, manufactured from materials that cannot be recycled easily? In Europe alone, it is estimated that 25,000 tons of blades are expected to be decommissioned by 2025. 

That’s why new projects should be envisioned across the full lifecycle, with integrated solutions that preserve necessary information, and solutions like HxGN EAM that help companies make the right investment decisions during operations, repairs and replacements.

Q: And for hydrogen?

For every source of energy, time to market is the name of the game. Countries that are starting projects for new nuclear plants now can hope that they will make an impact in 2040 at best. The process to convert licenses for oil, gas, and nuclear can take up to 28 years from issuance to production.

The timeline for hydrogen initiatives remains uncertain, but any delays can impact operational efficiencies. Facilities might not operate as intended due to omitted features for timely delivery, possibly leading to quality issues.

And this is where a partner like Hexagon, with decades of experience in hydrogen production, can make all the difference. One of the things that we do best is helping companies leverage their data to reduce errors, automate repetitive tasks and save time and money. We’re also creating the standards - for example in Germany, where we’ve teamed up with TÜV-Rheinland to create standardized piping for hydrogen across all major design platforms. And, for hydrogen, such efforts could mean making an impact by 2030 rather than 2050.