Key questions about IoT in energy: Q&A with GlobalData thematic analyst
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Amalia Maiden is a research analyst for Thematic Intelligence at GlobalData. She specialises in ESG and energy transition, covering industrial and automotive sectors.
Which applications of IoT are most commonly seen in the power sector?
Amalia Maiden: There are two key areas in the energy sector value chain where IoT integration will be essential.
The first is using connected sensors and devices to facilitate the predictive maintenance of generation and distribution infrastructure. IoT can significantly transform the energy sector by optimising operations, managing asset performance, and engaging customers to lower energy costs. Connected sensors can be combined with machine learning algorithms to collect real-time data on the status and performance of equipment and infrastructure, acting intelligently to detect anomalies or changes and suggest measures to maintain efficiency.
The second key use of IoT in the energy sector is to help meet energy distribution demands. The energy supply chain has experienced a multitude of stresses over the past few years, including spiking energy costs, political conflicts, the transition to renewables, and safeguarding assets against extreme weather conditions.
Many of these issues will continue to strain the supply-demand balance of energy grids, particularly with the ever-increasing transition towards living and working in digital spaces with increasing electricity requirements. Connected sensors and smart meters can be combined with predictive machine learning models to monitor and anticipate energy production by power companies and usage by consumers and industries to help balance the grid and increase distributional efficiency.
What pain-points can IoT technology solve in the energy sector?
Amalia Maiden: IoT technologies act as the backbone for digital transformation within the energy sector. According to GlobalData forecasts, global IoT revenue in the energy sector will reach $64.8bn by 2027, up from $27.8bn in 2022. The positive industry attitude towards IoT adoption has come about through improvements in the individual technologies within the IoT ecosystem.
Internet connectivity is now available on a larger scale globally, and hardware costs for devices are ever-decreasing. The connected networks of devices drive more sophisticated uses of technologies, namely artificial intelligence (AI), for data collection and the automation of processes. IoT can create a tech ecosystem that addresses many challenges within the sector, such as balancing supply with demand, workplace safety, integrating renewable energy into the grid, and fluctuating energy prices.
How can IoT technology optimise energy use and support sustainability more widely?
Amalia Maiden: At its core, IoT technologies offer companies a wide range of solutions that not only aid in reducing their environmental impact but also contribute to cost savings and risk evaluation, all while aligning with environmental, social, and governance (ESG) criteria. The key lies in the data collected through IoT-connected devices, primarily sensors, which supply a wealth of information for comprehensive analysis. These devices monitor variables crucial to operational efficiency, energy demand, and environmental factors like air and noise pollution.
One of the most significant advantages of integrating IoT devices is the ability to analyse and adjust operations and plant running continuously. This real-time monitoring minimises the risk of business disruption, improves resource management, and extends the life of critical infrastructure and assets.
IoT technologies also facilitate a smoother transition to renewable energy sources by providing insights encouraging their integration into the grid. This not only aligns with global efforts to combat climate change but also puts companies in a stronger position when redesigning their business structure and plant portfolios.
As environmental concerns grow and regulations tighten, companies are increasingly being held accountable for their Scope 1 emissions, and there’s a looming possibility of Scope 3 monitoring being introduced in future regulations. IoT is a powerful ally to energy companies in this complex landscape, enabling ongoing data analysis to monitor and optimise their decarbonisation efforts.
How will the renewable sector be impacted by IoT technology?
Amalia Maiden: The global focus on CO2 reduction is driving progress towards a more sustainable world, as electrical grids and renewable power sources become critical infrastructures within society. IoT devices can collect data related to energy production at renewable assets, which helps energy providers establish a clearer understanding of their production ratios and the energy generation mixes necessary to meet consumer demands. Reducing anomalies and service interruptions and safeguarding electricity grids during the transition to renewable energy sources will be essential for the energy sector.
IoT and AI predictive tools are critical for maintaining the resilience of national grids. We are increasingly seeing the adoption of IoT devices connected to the cloud by transmission system operators and hardware manufacturers throughout the sector for infrastructure maintenance and energy distribution management. This data is then fed into software equipped with AI to enable rapid, real-time analysis of the data collected.
Companies use remote terminal units to aid in communication between the elements of the grids and the distributed control software. These technologies help companies prevent critical issues by reducing delays in maintaining remote renewable infrastructure and monitoring real-time data related to energy production and grid demand to help predict supply requirements.
GlobalData, the leading provider of industry intelligence, provided the underlying data, research, and analysis used to produce this article.
GlobalData’s Thematic Intelligence uses proprietary data, research, and analysis to provide a forward-looking perspective on the key themes that will shape the future of the world’s largest industries and the organisations within them.