Energy Sector’s Digital Era Unlocks Green Potential
Rhys Kirk, Chief Technology Officer at Conrad Energy, highlights how innovations like digital twinning and AI are bolstering sustainability and efficiency.
Businesses and investors have not historically associated the energy industry with cutting edge digital or technological innovation. There have been a number of reasons for this, including the regulated nature of the industry meaning that new technology, digital tools, and data have not been straightforward to integrate. However, in recent years, we have seen the sands shift. In part, this has been due to an ever-increasing focus on sustainability and efficiency from all sides – investor, supplier, and end-user.
Today, the UK has a high penetration of renewable energy connected to the grid, which has required a modernisation of how the energy sector operates. Through a combination of desire and necessity, the energy industry has started leading from the front when adopting new technologies. Across the board, this has created new investment opportunities, as well as greater value for asset owners and energy users alike.
Digital twinning
One of the key areas where the energy industry has successfully adopted advanced technologies over the past decade is in digital twinning. As the name would suggest, digital twin technology creates a virtual replica of an asset – or indeed a collection of assets, such as a wind farm – and displays a spread of information, including operational health and condition, performance, efficiency, and a host of other key points of information.
The widespread adoption of digital twinning in the energy sector has enabled asset owners and intermediaries managing assets on the owner’s behalf to identify issues, faults, or deterioration that needs addressing over the course of the asset’s life span.
It also allows for better quality long-term planning for an asset – for example, sophisticated digital twinning tools enable stress testing and predictive maintenance. Overall, for those investing in the energy transition, this information allows for a more considered deployment of investment into energy generation assets.
With more information on how an asset is performing, as well as greater visibility on demand-side trends supplied through digital tools, suppliers can adjust energy output from assets so that they are being used as efficiently as possible. This not only elongates the lifespan, but also allows the asset owner to achieve the greatest value for their energy at any given time.
The benefits of digital twinning for the energy industry are clear, and it arguably served as something of a jumping off point for the energy industry to more readily adopt digital solutions into their operations.
Shining a light on ‘dark data’
Use of digital twinning tools has evolved beyond just showing the overall condition of an asset since first movers began adopting it in the energy sector. These digital tools, and the information they display, have become more and more advanced. As a result, the information is beginning to take on value in and of itself.
This data was not easily attainable – if attainable at all – before the energy sector began to more readily adopt technology, and so was commonly referred to as ‘dark data’. For asset owners, this data coming to light through digitisation of the sector has opened up new potential revenue streams.
Take, for example, a high energy usage business such as a data centre or a manufacturer. The cost of energy and impact on the environment are likely to be high on the list of concerns for these businesses and their stakeholders. As such, any additional information they can attain on their energy usage, particularly how they might adjust operations to run as cost effectively and sustainably as possible, would be highly valuable.
Digitalisation has made this information available, and businesses are indeed looking to buy. The reason this data is valuable is that it can be used by asset owners to maximise their energy efficiency and minimise their carbon footprint. The challenge can be in collecting the data – and this challenge will be beyond many smaller-scale independent owners such as landowners who have built battery farms. Suppliers that operate on a larger scale, however, can work with or on behalf of asset owners to collect this data and then sell it, which has the potential to create revenue streams for both.
Data as a commodity is already commonplace in other sectors, and now that the energy sector is beginning to uncover similar volumes of data through digitisation, it is having a similar impact and creating additional revenues streams across the energy value chain. The end result is that investing in the energy transition is becoming a more bankable opportunity.
AI: the new forefront
The next major step in digital innovation that is on everybody’s mind across all sectors is artificial intelligence (AI). While the energy sector has been slower to adapt to the integration of technologies like digital twinning or data gathering, it has been hugely encouraging to see a high level of interest in how AI can revolutionise the energy industry and create value.
The most advanced AI tools being developed by technology-led energy providers, which are now penetrating the market, can create this value through end-to-end application.
For example, AI tools are now able to carry out the engineering and performance analysis made possible by digital twinning tools in seconds. If an asset owner or the supplier managing the asset needs to know the average monthly power output of an asset for the past six months, AI can compile and provide this information. Overall, this means that asset maintenance and management is made quicker and easier, allowing engineers to focus on higher value work, cutting operational costs for those funding the transition.
AI is also being integrated into energy distribution to optimise the returns for asset owners. It can monitor demand and supply, flag to energy providers where demand has risen, and what asset would be best priced to fill that demand. In some cases, the most cutting-edge AI tools are able to automatically switch on the optimal asset for efficiency and cost.
Having once lagged behind when it came to embracing the benefits of technology, there is now little doubt that the energy industry has positioned itself at the forefront of change. It is also reaping the rewards – through greater efficiency, by bringing ‘dark data’ into the light,.
Given the revolutionary potential of AI, we can expect to see the pace of change quicken further.
The post Energy Sector’s Digital Era Unlocks Green Potential appeared first on ESG Investor.