How Technology is Putting Energy and Utility Industry in a Massive Global Shift
The power and utility industry is going through rapid change. Though not known to be innovative, the surge in demand for smart cities and electric mobility is converging with the need for renewable energy sources and sustainability.
The ransomware attacks at multiple utilities in 2021 raised the issue of security and caught the attention of federal lawmakers. The industry had concerns over grid reliability while adapting to the demand for renewable energy sources.
Energy providers have always been required to be agile and innovative to remain competitive. They have looked to tech solutions to help energy supply and demand while reducing costs. Here are the seven trends we will see in this decade:
1. A Move Towards Sustainable and Green Energy Sources
The world anticipated a string of decarbonization following the UN Climate Change Conference, UK, 2021. A commitment was made to phase down coal and inefficient fuel subsidies. The United Nations Framework Convention on Climate Change (UNFCCC) mentioned coal for the first time, signaling the commitment to end dependence on coal.
What’s more, all 197 Paris Agreement parties committed to reviewing their nationally determined contributions (NDCs) in 2022 rather than their previous date of 2025.
In 2022, more energy and utility companies will commit and strategize to reduce carbon emissions, driven by consumer support, opportunities for value creation, environmental, social, and governance (ESG) goals, evolving state clean energy mandates, and potential federal legislation.
There will be a push for energy and utility companies to move towards renewable energy, announce decarbonization goals and interim targets, expand existing targets, and flesh out strategies while protecting stakeholder interests.
2. New Resiliency Strategies Due to Unprecedented Weather Events
The unpredictability, frequency, and intensity of extreme climate and weather events in 2021 point toward an increasing focus on utility resiliency strategies. As per a survey, 51% say extreme weather has affected the reliability of electricity delivery than in the past year, while 38% saw the impact unchanged.
Resiliency planning is key to mitigating weather events like wildfires, heat waves, intense storms, floods, and deep freezes, impacting supply and demand. With global weather patterns entering uncharted territory and the inability to predict the future based on the past, energy and utility will proactively prepare for an uncertain future.
3. Driving Growth of 5G Usage and Cloud Migration
The industry will continue to modernize the electric grid to make it more reliable and inexpensive. With millions connecting various devices such as smart meters and sensors, 5G can enhance the reliability and security of these connections and enable easy data sharing.
Along with improved communication, 5G technology will allow energy producers to incorporate renewable energy sources into the grid. It will also enable greater use of smart meters and sensors on mobile devices and move devices to the cloud, enabling providers and consumers to analyze and act on it efficiently.
As companies generate vast amounts of data for various purposes, they may be overwhelmed with the storage and management activities, prompting them to adopt the cloud. The industry already has some reliance on IoT devices. It uses data to enable innovative tools such as digital twins. The cloud is a critical part of such technological developments.
4. AI and ML will Drive Future Innovation
Energy and utility companies have already begun using AI to augment operations, helping them manage resources, store energy efficiently, and forecast energy needs. In the future, it will be an invaluable tool in making the transition to an energy system that uses more renewable energy sources.
AI and ML can optimize energy consumption, predict energy prices and demand, and plant operations. Governments and authorities worldwide count on these technologies to accelerate research to enable long-term energy storage.
AI is critical in balancing the many electricity sources contributing to the grid, supporting rapid and efficient forecasting, and delivering power to consumers. AI will play a role in moving towards highly efficient, zero-emission, and linked energy systems.
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5. Decentralization will Give Way to Smart Grid Operations
With real-time operations, an increased move towards decentralization will make energy more attainable to the average utility and energy consumers. Real-time flexible load offerings could become a cornerstone of utility resource planning, cost reduction, decarbonization, and resiliency. A survey indicated that 90% of companies want to use flexible load programs.
A decentralized approach will allow businesses of all sizes to enter the market. Established ones can position themselves to react to changing market conditions, thus increasing their earnings. Consumers have more choices and operators can innovate easily, and the market gets stronger as legislators and regulators support energy efficiency programs.
6. Digitalization Beyond the Plant Floor
Experts recommend including digitalization concepts starting at a policy development stage to ensure that the types of systems created will have maximum benefit. The obvious application is the plant floor with sensors and devices connected to IoT. But it can be served to workforce processes and customer service operations.
Careful implementation of digitalization unlocks efficiency in all corners. In the future, there could be mobile applications for devices like smartphones and tablets, enabling customers and employees to work together. Mobile meter reading will become the new norm. People who need data to make decisions can have real-time access with room for improvement.
7. Cybersecurity will Take Priority
As cybercriminals are changing tactics, there has been an increase in cyberattacks and ransomware attacks. Energy and utility companies will implement cybersecurity solutions to address threats by focusing on innovative and resilient solutions and investing in these security solutions to improve critical infrastructure security.
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