Balancing the energy trilemma

Key opportunities lie in enhancing energy system integration, reliability, digital capacity, agility, and energy efficiency, all while minimising greenhouse gas (GHG) emissions. The transformation enabled by digital technologies is essential for supporting the energy transition and addressing the challenges of the energy trilemma. Moreover, a secure, governed, connected digital ecosystem is increasingly required, utilising advanced analytics, artificial intelligence (AI), and emerging generative AI.

The challenge of the energy trilemma and the opportunity to mitigate with digital technologies

The World Energy Council’s Energy Trilemma Framework identifies the ongoing challenge of balancing the trade-offs necessary for achieving net zero emissions while addressing the elements of energy security, equity, and sustainability. This challenge has been further complicated by geopolitical events such as the Russia-Ukraine war, which has prompted a strategic shift from reliance on Russian pipeline gas to LNG, coinciding with a global move away from coal and liquid hydrocarbons towards hydrogen and renewable energy sources.

Additionally, a projected 15% growth in energy demand is required to address current energy accessibility gaps, catering to an additional 2 billion people and supporting a global economy set to double by 2050. Considering these complexities, a crucial question arises: how can digital technologies across the natural gas/LNG supply chain and broader energy ecosystem help mitigate the challenges presented by the energy trilemma? This question will be the focus of this article.

Previous editions of LNG Industry have delved into the LNG value chain and provided context on how digital technologies are facilitating the LNG regasification process and its integration into existing natural gas TSOs and distribution energy systems. These systems are being augmented and integrated with renewable energy and hydrogen — a central theme of this article. For reference, the LNG Industry June 2023 article titled ‘Visualising the Digital Future’, introduced the concept of the LNG digital twin — a system of systems — along with the use of integrated “layers of analytics and visualisation” aimed at unlocking “LNG digital capacity” and supporting “digital decarbonisation” in LNG liquefaction. This edition included illustrative case studies from Cheniere Energy and Nigerian LNG.

The LNG Industry January 2024 article, ‘Strategies for the Digital Age’, highlighted the significance of aligning LNG business strategies with digital strategies and the integration of an operational excellence management system. This alignment is essential to operationalising the components of the LNG business strategy, all guided by a digital strategy in the context of the LNG digital twin, with practical examples from Cheniere Energy and Cameron LNG. This alignment is even more critical when business strategy encompasses the expanded LNG, hydrogen, and CO₂ value chains. Figure 1 illustrates this critical alignment.

Natural gas/LNG TSOs: The circulatory system of the LNG and hydrogen energy transition

Current LNG importing countries and their associated TSOs must expand and evolve their LNG regasification, transmission, and storage infrastructure to accommodate the significant growth in LNG-sourced natural gas and the rise in merchant hydrogen production (hydrogen produced for transport and consumption).

Global LNG trade is projected to increase significantly from 401.5 million tpy in actual production in 2023, of which, the EU was the largest LNG importer at 126.6 million tpy. As illustrated in Figure 2, the Institute for Energy Economics (IEEFA) forecasts that global LNG production capacity will grow by approximately 193 million tpy from 2024 – 2028, rising from around 474 million tpy of nameplate capacity at the beginning of 2024 to 666.5 million tpy by the end of 2028. While some of the forecasted LNG growth will not materialise, there will undoubtedly be a significant growth in LNG requiring continued LNG regasification and associated natural gas infrastructure expansion.

The expansion of merchant hydrogen production — hydrogen not consumed on site — poses additional challenges for natural gas TSOs. There is a projected substantial growth in the required hydrogen infrastructure for LNG importers, particularly in the EU, Japan, and China. Moving forward, traditional TSOs involved in LNG regasification will need to integrate hydrogen, pipeline natural gas, and LNG into a consolidated energy system, requiring the adoption of necessary systems and digital technologies. In this context, TSOs function as the circulatory system of the energy transition and are essential to addressing the energy trilemma.

Natural gas and LNG TSOs provide vital intra-country and inter-country distribution, utilising the existing natural gas infrastructure to balance supply and demand within distribution systems. These TSOs are expanding their services to include new energy sources such as hydrogen and CO₂, as illustrated in Figure 3. Furthermore, they are also integrating renewable energy sources, including solar, wind, and distributed energy resources (DER), to enhance existing electrical systems and reduce their carbon intensity.

The increasing complexity of TSO services underscores the need for reliable supply-demand planning, scheduling, and molecular-level optimisation across natural gas, hydrogen, and CO₂ systems. Achieving this while minimising their carbon footprint and meeting profitability, reliability, and safety expectations can only be accomplished through the effective use of digital technologies.

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Read the article online at: https://www.lngindustry.com/special-reports/24102024/balancing-the-energy-trilemma/