Currently, the energy and utilities sector is facing a strong call for a change. The rise of the sharing economy, entailing a more rational resource usage, customer-centric approach in service delivery, increasing demand for green energy, growing trend in using electric cars, and many others encourage energy and utilities companies to search for new opportunities and business models.
On the one hand, there is the energy transition towards the replacement of fossil fuels with renewable energy. On the other hand, there is the development of technologies that support this tendency.
The production of renewable energy is the cornerstone of the energy transition. Though in the long-term period, the aim is to replace traditional energy sources with renewables, in the shortest perspective, energy plants have to guarantee decarbonization as we disengage from the use of coal.
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Why Digitisation Is a Key Enabler of the Energy Transition
Digital transformation is alleviating the transition of the energy industry: due to technology implementation, energy transition can be eased by:
· Enhancing energy efficiency
· Regulating energy supply and demand
· Advancing energy management
· Revamping operational efficiency in the industry
Technologies drive different aspects of energy transition, and the general imperatives are reliable data, automated operations, and IoT-based data sharing for better decision-making and automated coordination of workflow operations.
Benefits of Digital Transformation in the Energy Sector
Digital transformation facilitates the integration and management of renewable energies, providing the following benefits:
· Reduced downtime. Technologies aid utility companies with preventing downtime by offering the capabilities of early alerting about asset maintenance. Smart systems anticipate maintenance by analyzing the current state of assets. This is crucial for staying resistant to market competition.
· Automated processes of energy plants. Digital tools automate the operation of energy plants, while interconnected systems avoid the decentralization of energy plant’s departments.
· More accurate market forecasts. Analytics tools odder a deep analysis of data collected in real-time, streamlining the production of alternative energies and informed decision-making.
Key Trends Shaping the Energy and Utility Industry
To understand the perspectives of organizations operating across the energy and utility industry, Deloitte conducted a survey of 500 US executives and senior leaders in 2021. The survey identified the five key industry trends that will predominate in 2022.
Five Power and Utilities Industry Trends for 2022 as per Deloitte’s Survey
Sustainability
Decarbonization plans have become an indispensable constituent of many utility and energy companies’ strategies. As of mid-November 2021, 48 out of 55 US large investor-owned utilities had committed to reduce carbon emissions, many by 2050. According to Deloitte, in the next year, more utility and energy companies will announce their decarbonization strategies.
Resiliency
The unpredictability of weather and climate in 2021 is shaping the focus towards resiliency strategies in 2022. For utility enterprises, resiliency planning is crucial as global climate and weather events may exert influence upon energy supply and demand. In 2022, most utility and energy companies will reconsider their resiliency strategies and pursue additional data collection and forecasting plans.
Digital Transformation
In the coming year, utility companies will be leveraging 5G communications and cloud capabilities to harness the power of connected devices. Some of the most imperative areas where 5G can contribute to the growth of utilities include:
· 5G facilitates utility management by connecting devices via the Internet of Things.
· 5G’s capabilities allows grids to modernize, automate, and control smart devices more effectively.
· 5G can contribute to the faster adoption of cloud, which enhances efficiency and enables always-on availability.
Smart Grid Operations
In 2022, more utility companies will include flexible load programs in resource planning to reach decarbonization target goals. New technologies enable commercial and industrial load reduction through smart meters, smart thermostats, smart appliances, etc. According to Deloitte, more smart devices will be connected to automated energy industry software and analytics to address demand-based utility usage.
Electrification
More than three-quarters of Deloitte’s power and utilities survey respondents (76%) said ‘’their company is preparing for increased electricity demand as building electrification rises’’. In 2022, grids are expected to handle increased electricity demand, but additional investment may be needed for managing energy use and load.
IT Capabilities That Enable Digital Transformation in the Energy Sector
As per Gartner’s research, the IT capabilities below are the main contributors and enablers to the energy transition:
· Internet of Things
· Artificial Intelligence
· Advanced Analytics
Here’s why these technology innovations are trending in the energy sector:
· IT can enable data collection across utility value chain and technology domains, improving operational performance.
· The digital transformation of utility operations is driving the use of analytics and smart analysis to support decisions across the utility enterprise.
· Utilities need to employ AI-based models to add more intelligence across operations, including asset management and service delivery.
Conclusion
Digitalization is a pivotal element of the energy transition process, enabling the consumption of more renewable energies in electrical systems and allowing better handling of energy demand and supply. To establish this process, utility and energy companies must integrate energy management software that interconnects all the assets and facilitates its management to ensure the transition to renewable energies and reduce carbon emissions in their operations.
With a software outsourcing company SCAND, executives can manage energy plants efficiently by creating smart analyses to optimize global processes. By working with a trusted technology partner, companies working energies can rely on innovative technologies to make their management look into the future.
