Is the energy sector digitized?

The current situation of the energy sector

The search for more sustainable, non-fossil fuel-based energy, the growth of the electrification of the economy, and increased environmental awareness among citizens are pushing the energy industry to focus on business models that revolve around renewable energy.

Currently in Spain 43% of energy is renewable, with the goal of reaching 74% by 2030. This can only be achieved if the energy sector undergoes a digital transformation as there is still a high dependence on traditional fossil fuel sources around the world.

In some ways, the situation is quite similar when it comes to the digitization of these companies. Steps are clearly being taken towards a complete transformation of processes, but there is still a long way to go.

Traditionally, this value chain has 4 stages:

Power generation: The energy we ultimately consume is generated from different sources in power plants.

Power transmission: This is the process of transporting (in the form of high voltage) all the energy generated by the power plants to the distribution points.

Power distribution: is the process of delivering power (in medium or low voltage form) from the distribution points to its final destination: the consumer.

Energy marketing: consumers (generally) do not buy energy directly from the distributor. They usually do so through an energy trader, which acts as an intermediary.

On the other hand, there are also companies that offer products and services to all the agents in this chain: engineering and consulting firms, installation and maintenance companies, etc.

So, there are a number of players in the industry, and where they are in the digitalization process, and the way they go about it, is completely different. I will focus on what is usually a first approach to the digital transformation process: data analysis.

You might be interested in: IoT applications for the energy industry

Nothing is more important than data in digital transformation

Data mining is the first (and usually the most undervalued) step. Being able to make informed decisions based on real, accurate and instantaneous data is crucial to being able to transform companies' businesses.

That is why there is a lot of work in the industry revolving around the extraction and analysis of meaningful data, and IoT solutions are being implemented for that purpose. However, the challenges are far from trivial:

Data acquisition: Although it may seem like it, data collection is not easy, especially when that data comes from different sources. Sometimes you have to be able to acquire data from outdated equipment with proprietary protocols, combine the process with obtaining information from modern sensors, and use cost-effective solutions in doing so to ensure a good cost-benefit ratio.

Connectivity: Sending data not only to the Internet, but also integrating it with the different internal and external systems and services (Analytical Tools, CRMs, ERPs, etc.) can be a difficult task. And these systems are the tools that will really extract value from the data.

Security: It is vital that the entire data capture process and the devices that handle this data are secure. The existence of insecure IoT devices is a real threat to any company's business, and it is therefore essential that any IoT solution implemented takes security seriously.

Reading you may be interested in: IoT devices: 4 benefits for energy companies.

In the energy sector, significant data is generally captured by closed devices (PLCs, Meters, Inverters, etc.) from large industrial manufacturers, and leveraging that data is not an easy task. Integration with this type of equipment is complex and can mean too much effort on the part of companies, whose main objective is not to become experts in hardware integration, but to make data-driven decisions.

The most logical approach, from our humble point of view, is to use open IoT gateways with a platform that allows not only to read data from such outdated devices, but also to obtain data from other sources such as modern IoT sensors.

Barbara's software solution has been created exactly for that purpose: to integrate with IoT gateways and enable companies to overcome the 3 challenges mentioned above (Data Acquisition, Connectivity and Security) by means of an open and flexible tool that can be managed remotely.

And after the data, what?

Once the data is captured correctly, energy companies have a source of information that they must transform into insights that allow them to discover interesting aspects.

Analyzing this data not only allows real-time monitoring of certain parameters, but also allows important decisions to be made based on this data (such as when to replace a machine part before it breaks down, or whether to buy energy instead of consuming internally generated energy).

A good use case example is what is being done with photovoltaic generation. By obtaining data from solar panels (mainly the amount of energy produced at a given time) and combining this with other contextual information (weather conditions, electricity price, etc.), some companies are generating truly smart services for energy producers, basically transforming them into their own energy managers. This means new revenue streams for the companies and monetary savings for their customers.

And the future is very promising. Thanks to the growth of interest in electric cars among consumers, there are new elements (the batteries of those cars) that are becoming part of the power grid. When connected to chargers, they can be used as a new source of energy, and power distribution companies can optimize their networks through instantaneous actions based on the data they manage.

The energy sector has a long road ahead of it towards digital transformation, butthe journey has already begun... and with firm steps.

Request a personalised demo and let's talk about what our IoT technology can do for your business.

Interesting reading: AIoT: the perfect fusion between the Internet of Things (IoT) and Artificial Intelligence (AI).

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