Technology has been increasingly adopted by all major industrial sectors in recent years, and the energy industry is no exception. Technological innovation is no longer associated solely with replacing documentation with automated electronic systems. The next step is the reinvention of the ways in which energy and utility companies do business, engage their customers and interact with them. This is Energy 4.0, a buzzword that is used to denote the digital revolution in this particular industry.
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Industry 4.0 is a more than familiar notion in the manufacturing world, this fourth industrial revolution incorporates automation and data that is used to optimize production, improve flexibility and efficiency within a smart factory environment. Embracing digital technologies since the 1970s, the energy and utilities sector are embracing emerging innovations such as the Internet of Things, data science, machine learning and the cloud. The digital revolution, known as Energy 4.0, involves these advances to build smart grids, manage renewable energy and distributed generation.
At the same time, hardware manufacturers and software development companies have been building expertise in creating and integrating business-driven solutions with huge corporate systems, with an emphasis on internal reliability and green security.
Thus, with costs falling and technologies growing at an exponential rate, digitization presents opportunities for Energy 4.0 companies to establish new business models and sustainable energy production and supply strategies.
The Internet of Things in the energy sector
The IoT sector is expected to reach a global market value of over EUR 26 billion by the end of 2020. One of the main drivers here is the digital transformation of energy sector operations. In the mining, oil and gas industries, Internet of Things solutions incorporate machines and data analytics to meet the operational efficiency requirements set by energy companies. Actionable data helps improve decision making, reduce vulnerabilities and risk factors. Their supply chains are also increasingly influenced by digitization, which also positively affects related industries.
New IoT trends in manufacturing have emerged in the last five years. Drones and IoT sensors are used to inspect facilities and lines. Smart grid meters provide up-to-the-minute data on oil, gas, water and electricity demand. IoT devices can also monitor changes in temperature, humidity and vibration, making it possible to prevent equipment failures and increase human safety.
The opportunities are increasingly limitless, and the future of IoT in this sector will be defined by the energy companies and software development companies that build these pioneering solutions and bring them to market.
Digital twin technology
Digital twin technology is among the top strategic trends and has been adopted by a growing range of industries since its original development by NASA. A digital twin is nothing more than an advanced duplicate that models a real-life object or process without replacing it. The digital twin, by using information gathered from IoT systems attached to its physical twin, enables an organization to monitor key performance indicators. The goal is to feed the data into machine learning systems that can then alert operators to potential problems, expected costs and the advantages of the options available to remedy the situation.
About half of the operations running IoT systems currently use digital twins. For example, oil company BP uses digital twins to model new oil field production. General Electric has more than one million digital twins deployed, controlling more than 70% of the jet engines currently in use worldwide. These processes will also find greater currency as the smart factory trend advances.
Smart energy as part of the smart city
Increasing urbanization worldwide has made cities a ground zero for reexamination of environmental policies. By implementing IoT technologies, smart cities aimed to increase quality of life and reduce energy consumption. Businesses, policy makers and city entrepreneurs will work together to see urban areas play their part in the energy revolution. And it is on the side of companies where being able to carry out a digital transformation appropriate to what the current times mark, must go hand in hand with a consulting firm specializing in the energy sector as the HEXA Engineers.
Hundreds of European cities have already joined forces to develop protocols for the digitization of energy sector operations in smart cities. This union has been made under the umbrella of the European Innovation Partnership for Smart Cities and Communities.
Utilities will plan to work with initiatives like this to create a vision for smart cities and infrastructure, such as smart parking. This includes reviewing assets and capabilities to deliver services within the emerging business model. Processes must be put in place to ensure that public-private partnerships deliver shared value to citizens and stakeholders. This includes getting serious about attracting businesses and cities to programs, vetting ideas and creating sustainable business models. And in this new paradigm, companies working in the energy sector cannot afford to make missteps if they do not want to be left out.
The blockchain and smart contracts
Blockchain technologies, particularly smart contracts, have the potential to make end-to-end energy delivery simpler and more efficient. This includes accounting for emissions and ensuring that energy supply actually comes from the sources attached to the contracts. Executed trades can be automatically confirmed and recorded on the blockchain, significantly reducing delays and settlement costs. Emerging markets could use blockchain to acquire financing, enable transactions and promote transparency.
Blockchain technologies continue to grow and are getting closer and closer to being robust enough to support large market projects. Mind you, it already works robustly across multiple industries, including energy and utilities, producing benefits such as automation, security and auditability.
