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Comprehensive Analysis of the Energy and Utility Industry

Energy and Utility May 18, 2022
Comprehensive Analysis of the Energy and Utility Industry
Kishor Venkatesh R

Content Developer


The energy and utility industry is increasingly digitizing. Though companies have taken steps to create value from tech-enabled initiatives and establish new ways of working, there are no global end-to-end cases of digitalization. They instead implement a small number of isolated digitalization use cases without much business value.

Enterprises are developing their industrial Internet of Things (IIoT) and are scratching the surface of untapped potential, which promises exponential growth and enormous scalability for their business. This decade, energy and utility companies focus on the below segments clubbed under Transmission and Distribution, Supply Chain, and Production and Processing.

Improving Performance with Digital Power Plant

Key players are shaping the industry by developing advanced drone-based powerline inspections and methane detection connected with AI-powered technologies, IoT, and sensors. The transformation to a digital power plant is occurring in four areas:


The digital power plant focuses on real-time performance optimization, stable operations, and guided issue resolution supported by automatic reporting and digitized control walks.

It improves process efficiency, standardizes operator rounds, and automates documentation. It reduces inspection times with radio-frequency identification (RFID), which can send notifications about equipment performance and repair history.


Digital power plants have world-class reliability and reduce planned outage time and maintenance. Here data analytics and digital process support are essential. Sensors monitor equipment and increase predictive maintenance. Smart sensors that feed into digital twin provide improved insights on plant condition and spare part management.

Energy efficiency

In digital power plants, heat-rate losses and root causes can be visualized in real-time, triggering immediate actions to resolve issues. A digital dashboard in the control room can provide full transparency on improvement levers and financial impact. A virtual bunker allows optimal fuel mixing based on real-time plant conditions and market prices.

It can automate recommended levels of chemical use based on a digital model of the plant’s water cycle and properties. Additionally, dashboards can provide data on auxiliary power consumption and automated analytics-based assessments of usage patterns.

Health, safety, security, and environment

As against the analysis of incidents still recorded on paper, not all available data can be used to analyze the root cause and prevention measures. Digital power plants use end-to-end digitized HSSE processes with automated monitoring and documentation to aid root-cause analysis and preventative measures.

Evolution of energy networks and smart grids

Smart grids include operations and energy measures such as smart appliances, renewable energy, and energy-efficient resources. Big data analytics and IoT tech are important technology drivers, whereby analytics shift to edge computing.

It has self-healing capabilities and enables electricity customers to participate actively. The digital communication tech enables detection, reaction, and proactively acting to changes in usage and issues.

Decentralized energy generation and microgrids/microgeneration are one of the main changes. When more energy is generated closer to consumers, it makes consumers active elements of the system, though it requires significant coordination.

The benefits include improved efficiency and reliability of the electricity supply, integration of more renewable energy into the existing network, supporting the development of electric vehicles at scale, new solutions for consumers to optimize their electricity consumption, and carbon emissions reduction.

Against transmission based on large power lines and pipelines includes small-scale transmission and regional supply compensation, allowing energy to flow in both directions where consumers actively participate in the system.

Digital Warehouse is Driven by Data

Digital warehouse has picking robots and guided vehicles that increase storage density and efficiency. Digitalization is the crucial driver for change in logistics where collecting, analyzing, visualizing, and sharing data is key.

Warehouse Management Systems (WMS) must use cloud solutions, visualization, and AI to support the digital warehouse.

  • Placing WMS in the cloud lets you focus on the core business and enables efficient multisite warehousing and connections to other systems.
  • A massive amount of data with AI applications makes the process effective, with gains in costs and sustainable working conditions. AI-based algorithms can optimize packaging for orders instead of mainly receiving goods in large boxes containing air.
  • Digital twin creates a digital visualization of processes that can replicate layouts, processes, and warehouse activities and then simulate the effects of future changes in demand or business models. 3D modeling can help management visualize and communicate to partners as part of strategic planning.

Optimizing Inventory Management with Technology

With legacy inventory management systems, utility and energy companies have inventory management built on top of legacy demand forecasting algorithms that lack channel-specificity, failing to understand online shopper demand patterns.

With proper autonomous demand forecasting, the ideal solution for many companies will be a real-time perpetual inventory that can support available to promise commitments for customers. When inventory lags demand, companies suffer losses.

AI helps ramp up efficiencies in network planning and predictive demand, allowing merchandizers to become more proactive. When energy and utility companies gain more visibility into the demand patterns, they can plan for change, like the new driving habits.

For example, they can adjust the number of vehicle recharging points and direct customers to nearby locations where recharging points are not in use, leading to happier customers and lower operational costs.

Smart Factory Enables Connected Manufacturing

The smart factory combines cyber-physical systems, automation, and IoT that eliminates routine tasks and makes room for demanding activities. They can collect and analyze data to improve processes, reduce costs, and minimize time frames. They can adapt production to the needs of the moment with the availability of a large amount of information.

Assets inside an enterprise can be managed, optimized, and maintained through data analytics and insights. It can lead to cost savings and a cleaner, more flexible, and resilient power supply. Additionally, it improves operations by deploying digital capabilities and bringing connected transport systems.

It can take electricity for industrial fleets, processes, and space heating and cooling in buildings in line with the broader energy transition. This trend aligns with the broader sustainability efforts to electricity their energy needs and fulfills their decarbonization goals and environmental, social, and corporate governance (ESG) efforts.

It also helps energy management, tracks, and optimizes energy use to achieve cost savings, reduce carbon emissions, and increase resiliency. Resiliency becomes important considering severe weather and climate events. Energy and utility leaders in the US and worldwide are increasingly concerned about maintaining the uptime of their critical assets.

Asset Management & Security as an Important Strategy

Asset management is important for the utility and energy sector because it helps them achieve better results. There is a focus on developing digital in the Oil & Gas production flow and generating clean energy. Digitalization enables interoperability between teams, advanced planning and scheduling for spare parts, and automated work order scheduling.

Energy and utility companies have numerous facilities and infrastructure networks worldwide. Real-time data collection mitigates the number of errors and sets up a step-by-step process to fulfill tasks. It can spot inconsistencies and notify field technicians. Moreover, the oil & gas industry consists of aging infrastructure requiring regular monitoring and constant maintenance.

It also provides asset security wherein managers can easily access information through the cloud platform. Alerts into a gas leak or pipeline damage allow effective decision-making.

Initiatives and Opportunities in the Energy and Utility Industry

Transition and Distribution, Supply Chain, and Production and Processing are the key focus areas of energy and utility players. Let us look at each focus area with initiatives:

1. Transmission and distribution – Energy companies focus on delivering clean energy and enhancing transmission in space activities.

Case 1 – Octopus Energy Group and Starlite Power partnered to decarbonize the Indian industry and bring cheaper green power to consumers worldwide.

Case 2 – New York State Energy Research and Development Authority selected Transmission Developers Inc. to deliver 1,250 MW of clean power to New York City.

2. Supply chain – Global companies enhance their capabilities through AI-powered digital solutions and power interconnection.

Case 1 – Yara International joined with JERA to develop a delivery and supply chain for blue and green ammonia to enable zero-emission thermal power generation in Japan.

Case 2 – Chevron and Bunge North are developing lower carbon intensity feedstocks and establishing a reliable supply chain from farmer to fueling station for both companies.

3. Production and processing – Companies implement alternative fuels for energy production and focus on attaining zero-emission solutions.

Case 1 – Ellis partnered with 45-8 Energy to accelerate the Helium and natural hydrogen exploration projects with the ambition to provide a local and sustainable helium and hydrogen supply chain to Europe.

Below are some of the immediate, short-term, and long-term opportunity areas.


Draup conducted a comprehensive analysis of the energy and utility industry. This report informs on the industry’s current outlook, challenges of the industry, critical focus, and opportunity areas. Draup’s sales intelligence platforms provide insights on digital capabilities, focus areas, current partnerships, and opportunities for service providers.

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