The energy sector is undergoing a rapid transformation as digital technologies continue to reshape its landscape. As the world becomes more connected, adopting digital transformation is no longer a choice but rather a requirement to thrive in this quickly evolving industry.
In this article, we will explore the top five digital technologies transforming the world's energy systems and discuss how they are being used to drive innovation and growth. Let's take a closer look at the digital future of energy tech.
Table of contents:
- The need for digitalization is stronger than ever
- Top 5 digital technologies transforming the energy sector
- Conclusion: fueling the global energy transition
The need for digitalization is stronger than ever
The energy industry has historically been slow to adopt digital technologies for various reasons, including the high cost of putting new energy systems in place and the complexity of the current infrastructure. However, with growing electricity demand, increasing pressure to reduce greenhouse gas emissions (reversing climate change), and solving the ongoing energy crisis; the industry is forced to find ways to improve efficiency and productivity.
The need for digitalization in the power sector is more pressing than ever before.
As global investment in domestic clean energy production is currently one of the top priorities in power generation, we can also observe a widening range of energy transformation trends. New technologies such as AI, blockchain, IoT, cloud computing, and 5G offer a range of benefits that can help businesses improve their operations, lower costs, and boost profitability.
By leveraging these technologies, energy companies can optimize energy generation and distribution, improve supply chain management, provide energy security, reduce downtime through predictive maintenance, and gain valuable insights into customer behavior and market trends.
Top 5 digital technologies transforming the energy sector
1) AI and machine learning: improving renewable energy efficiency
By leveraging vast amounts of data, AI and machine learning can help energy companies optimize their operations, improve efficiency, and cut costs. This is mainly because AI is revolutionizing the energy sector by enabling predictive maintenance, optimization of energy consumption, and predictive analytics.
AI algorithms can already optimize energy generation and distribution to reduce waste, increase output, and – ultimately – save money. This is especially important now, as the ongoing energy transition emphasizes integrating distributed energy resources by moving on to renewable energy sources like solar and wind. That’s why Enel has created a machine learning platform that can forecast wind and solar power generation, allowing the company to manage its energy resources better.
In other words, digital technologies can be successfully used to predict and optimize the output of renewable energy sources. This has been noted by General Electric, which started to use AI and machine learning to maximize the performance of its wind turbines. By analyzing data on ongoing metrics like weather patterns and energy demand, GE's turbines can adjust their output in real-time to improve efficiency and reduce downtime.
Another well-known energy company, EON, has implemented AI to predict equipment failure before it happens in its power plants. By analyzing sensor data and historical performance, the company can identify potential problems before they occur, minimizing downtime and reducing costs associated with unplanned repairs, thus maximizing output.
BP has also been using AI to avoid a different kind of failure – improving its oil and gas exploration. In order to increase drill efficiency and lower costs, the company has created an AI platform to analyze seismic data and forecast where fossil fuels are most likely to be found. Another prominent example is Tesla, which uses machine learning algorithms to predict energy demand and optimize energy storage and distribution.
It’s also worth noting that AI and machine learning can help companies reduce their carbon footprint and contribute to a more sustainable future. According to World Economic Forum research, using both technologies in the energy sector can increase efficiency by up to 20% while reducing energy consumption by up to 10%. With the energy sector facing increasing pressure to reduce costs and meet sustainability goals, it's clear that AI and machine learning are critical tools that can help companies stay competitive and meet the challenges of a rapidly evolving industry.
2) Blockchain: popularizing energy access equality
Blockchain is a secure, decentralized, and transparent technology that is primarily used for supply chain management and energy trading, creating a transparent and secure system for tracking energy transactions.
Many energy-related startups, including WePower and Green Energy Lab, are built on its foundation. These platforms allow energy producers to sell energy directly to consumers. That's mainly because blockchain technology is known for offering a safe, impenetrable record of energy transactions, making energy billing and transactions more effective. The end result is a more effective and open energy market, supported by smart contracts that are used to automate energy sales and payments.
As mentioned before, the technology allows for widening the market by enabling peer-to-peer energy trading, empowering consumers to become energy producers, and – ultimately – leading to a more decentralized energy system. This concept is utilized by many companies across the globe (i.e., LO3 Energy or Power Ledger), which empower their consumers to buy and sell excess renewable energy directly to one another locally, creating a more resilient and sustainable energy grid.
Because of its potential to create a more transparent, secure, and efficient energy system, blockchain is a useful tool that can aid in the transformation of the energy industry. For this reason, you should keep it in mind. Particularly in light of a promising McKinsey report that suggests blockchain could save the energy sector up to $500 billion by 2030.
3) IoT: balancing energy consumption with resource adequacy
The Internet of Things (IoT) involves using connected devices to provide businesses with real-time data to optimize operations and increase efficiency. IoT devices can monitor just energy transition, track equipment performance, and optimize demand response in electricity generation.
Currently, IoT sensors are becoming a critical component for predictive maintenance, allowing businesses to identify faults in their equipment before they become a problem. The data collected by these sensors can help enterprises to make smarter maintenance decisions and improve energy efficiency – ensuring a continuous and reliable energy supply. For example, Enel – a global renewable energy company – uses smart sensors to collect real-time data from its wind turbines to identify maintenance issues and optimize energy production.
The trend is so promising that, according to a study by McKinsey, IoT-based predictive maintenance could reduce maintenance costs by up to 30% and reduce unplanned downtime by up to 50%.
However, the sensors can also be used to monitor the temperature and humidity of a building and adjust the heating and cooling systems accordingly, reducing energy waste. This is the case with E.ON, a German energy company that implemented an IoT-based energy management system in residential and commercial buildings to reduce energy consumption and costs.
Furthermore, IoT and sensors can assist energy companies in lowering their environmental impact. By identifying and addressing inefficiencies, companies can reduce their carbon footprint and contribute to a sustainable future. Finally, IoT can improve customer experience, as smart meters and other IoT devices can provide customers with real-time information on their energy consumption, empowering them to make more informed decisions about their energy use.
4) Cloud computing: managing global energy transition to ensure sustainable development
Cloud computing has become a buzzword in many industries, including the energy sector. By adopting this technology, energy companies can streamline their data management and analysis and reduce IT costs. As we move into a more data-driven future, cloud computing will play an increasingly important role in helping energy companies succeed.
Cloud has numerous advantages for the energy sector. First and foremost, cloud computing adoption enables energy companies to quickly and efficiently process massive amounts of data, which is critical for making informed decisions. In other words, they use cloud to manage large data sets, optimize operations, and drive innovation. For example, Duke Energy has been using cloud computing to maximize its wind turbines, while General Electric has been using cloud-based predictive maintenance to improve the reliability of its power generation facilities.
Furthermore, cloud computing can help reduce IT costs and improve system scalability, allowing energy companies to more easily adapt to changing business needs. Plus, according to a study by Navigant Research, cloud computing in the energy sector is expected to grow from $4.4 billion in 2015 to $15.2 billion in 2025.
5) 5G: promoting energy affordability with real-time data management
With its lightning-fast data transfer speeds and low latency, 5G has the potential to revolutionize many industries, including the energy sector. 5G can help improve the efficiency, safety, and sustainability of energy infrastructure by enabling remote monitoring and control. As energy companies continue to investigate the potential of 5G, we can expect to see even more innovative applications of this technology in the future.
With 5G, sensors and devices can be connected to a network that can remotely operate and control energy infrastructure. This type of remote monitoring is already promoted by Siemens, which uses 5G technology in its factories to create smart energy systems that are proven to be more efficient, reliable, and sustainable. That's also the case with Vodafone, which uses 5G to remotely monitor and control energy systems to improve the efficiency of these systems, reduce operating costs and improve energy infrastructure management.
But that's not all. Remote monitoring and control enabled by 5G is also used to help to reduce the risk of accidents and improve the safety of critical infrastructure. That's because 5G can enable predictive maintenance, which can help energy companies better manage their equipment and reduce downtime. For example, ExxonMobil uses 5G to remotely monitor and control oil wells, pipelines, and refineries, thereby improving the safety and efficiency of its operations.
Conclusion: fueling the global energy transition
The industry changes dramatically as the world shifts toward clean energy. And as the energy sector evolves, it is clear that emerging technologies will play an increasingly important role in this transformation. From artificial intelligence and machine learning to blockchain, IoT, cloud computing, and 5G, digital technologies are revolutionizing energy generation, distribution, and consumption - enabling transformation towards sustainable energy sources.
With their potential to reduce costs, increase efficiency, and improve the overall customer experience, the benefits of these technologies are simply too great to ignore.
If you are an energy company interested in improving energy efficiency by exploring these technologies, Codete can assist you in harnessing the power of digital technologies to drive growth, improve performance, and stay ahead of the competition through professional consulting and digitalization support. Let's work together to transform the future of the energy sector.