How Digital Transformation Is Impacting the Energy Industry

We have heard a lot about the benefits of technological innovations. However, very little has been said about how these changes are contributing to affordable, uninterrupted sources of energy.

These energy transformations include distributed energy power sources such as micro-turbines and rooftop power sources. Secondly, there is the development of demand-side energy management programs that encourages the conservation of energy.

According to research, up to 3.5 billion people are currently connected to the internet. This is an increase as compared to only 500 million in 2001. As a matter of fact about 54% of all households are now connected.

Digital energy has also been made possible with more mobile phone subscriptions.

When these are combined with the digitalization of energy infrastructure, there is a potential of developing energy security at the local, regional and national level.

Changing Of the Landscape

Although solar remains one of the best sources of energy, it was too expensive to install. But in the recent past prices have been falling. This has, therefore, increased its installation at both the consumer level and the utility-scale.

Energy storage has also become cheaper thus helping the consumers to access energy at affordable prices. 

The digital transformation of energy systems including things such as energy management system, smart meters and automatic demand response could encourage consumers to access affordable and reliable energy.

Two Way Communication System

Initially, communication between energy providers and consumers was challenging. The two-way communication between the consumers and producers has now made it easy to dispatch distributed energy to places where it’s needed most.

This includes areas faced with grid stability, supply shortages and those that experience intermittent power supply.

Artificial intelligence Use

Currently, AI is being used by most companies to store energy more efficiently, monitor its consumption and boost grid stability. 

Through the integration of multiple sources, it has also enabled the flourishing of the smart grid. It’s believed that in the next 5 years, Artificial intelligence will boost energy production by a fifth.

While the storage of energy is becoming a more central element, digital technology has enabled the creation of virtual power plants. 

This means aggregate energy users can now switch their power on and off depending on their demand. Machine learning will also allow consumers to make a more accurate forecast in demand response.

Big Data and the Internet of Things

Digitalization across the energy sector is expected to play an important role in improving safety while optimizing the cost. 

By allowing performance forecasting, predictive management and real-time risk management, digital transformation has become a very important tool for energy industries.

When it comes to preempting problems and preventive maintenance, real-time and accurate data provided by the internet of things is expected to play a very important role. 

For instance, by linking the systems, sensors can be used to detect issues which the human eye cannot be able to detect.

From drilling to production, maintenance and operations, digital technology can deliver all the data needed.

Other ways through which the big data and the internet of things will affect energy includes

  • Predicting productive weather conditions. This plays a very important in solar and types of energy
  • Supporting proactive maintenance
  • Choosing sites to build on
  • Bring the cost of energy down through the use of more cost effective energy sources
  • Creating new energy models that are convenient and locked in low prices

Blockchain Energy Contracts

Blockchain technology will enable peer to peer platforms through which consumers will be able to buy and sell energy at the same time. Other potential applications include authenticating renewables and keeping all records of emissions.

Blockchain technology is also capable of securely sending and receiving data. Additionally, it will respond to market fluctuations and support the Internet of Things in a number of ways.

Digital Skills and the People

Digitalization is not all about big data and technology. By improving the digital skills of the workers through training, this transformation will ensure the running of the future proof business. 

As the workforce retires, the next generation will have the right skills needed to run the companies.

New Business Opportunities and Smart Charging Cars

With the increased digitalization, several new business opportunities are bound to arise. Power companies are expected to move from utility to energy service providers. Their coordinating capacities is expected to open up new opportunities

Smart car charging is also expected to arise. The number of electric cars on the road will increase. The smart charging solutions will help to integrate them into the energy grid. 

Moreover, newcomers will get into the market by exploiting secure communication and real-time data metering.

Impact on the Supply and Demand Side

With improved technology, the supply side will be affected by the ability to implement real-time assent control and predictive maintenance to improve the efficiency of the providers.  

When it comes to the demand side, the changing consumption patterns will not affect the long term energy use.

While digital transformation presents an opportunity, it may also bring about challenges. It will improve capital productivity, labor and capital efficiency. Besides, it will lead to energy security.

Wrapping Up

The transformations brought about by the digitalization and driven by new customer needs are irreversible. It’s, therefore, up to stakeholders to consider the benefits of these transformations for their energy systems planning and energy security. 

Overall, digital transformation is a powerful catalyst that will impact the energy industry in a huge way. The question is are you prepared?