As India grappled with an extraordinarily intense heatwave that saw multiple states record the hottest month of April in over a century, there was increased scrutiny of the country’s power consumption. To further complicate matters, the Central Electricity Authority, India’s planning body for the power sector, predicts the country will face its biggest power shortfall in 14 years in June this year, after a plunge in hydropower generation.
This is the latest indicator that highlights the significant challenges faced by the energy sector around the world. Many, including the UN, believe a potential long-term solution to some of these woes is the ‘energy transition’. The concept entails a major worldwide structural shift from fossil fuel-driven energy systems that use coal, oil, and natural gas to renewable sources such as solar, water, and wind.
For India, however, reducing dependency and altering consumption is a tall order since around 75 per cent of its electricity supply is obtained from coal-powered thermal plants. Recent trends suggest the current scenario is unlikely to change in the foreseeable future.
Fortunately, the technology sector has enormous potential to drive long-term changes, influencing and improving behavioural patterns. Collaborating with technology offers diverse advantages that include sustainability and reduced environmental impact but also increased business value and growth.
How the energy sector is harnessing tech in 2024
In 2024, the energy sector is using technology to great effect in its efforts to switch to business models that are less carbon-intensive. The decarbonisation of value chains is an early and relatively attainable step in the long journey that is the energy transition. Proactive companies are seizing the initiative by deploying data analytics, GenAI, and the Internet of Things (IoT) in tandem to optimise their supply chains, making them more energy-efficient while streamlining distribution. Global coordination of responsible AI must underpin these efforts.
Today, the environmental footprint of the energy sector’s industry operations is the subject of close inspection by governments. This has placed added emphasis on transparency and accuracy, particularly where data reporting is concerned. The growing demand for localised energy sources forces countries to update ageing infrastructure and improve cyber-resilience while unifying capabilities that have developed piecemeal over the years. Country-specific standards for industrialisation, like those in Germany and India, will help guide digital transformation, leading to more sophisticated digital operations requiring compliance with local laws and frameworks.
Industry 4.0, which integrates intelligent digital technology into industrial processes, is helping the energy sector make strides thanks to its real-time decision-making, live tracking, and close monitoring. Further refining digital operations can also help companies – both early and late adopters – cut costs and free up more resources to invest in larger, more ambitious projects.
Companies are using robotics and Machine Learning (ML) to improve their asset operations by automating inspections, improving problem detection, and establishing predictive maintenance. This reduces wastage by avoiding flares or leaks and allows energy companies to derive full value from the resources at their disposal.
In the long run, the onus is on the energy sector to maximise its utilisation of renewable power sources. The likes of digital twins, AI/ML, and data analytics are pushing the boundaries of research while allowing companies to broaden their digital capabilities. Companies are accelerating the urgent development of renewable energy sources such as wind, solar, and water, along with geothermal and hydrogen. Together, they are expected to comprise the foundation of this sector in the future.
A common theme seen in the energy and utilities sectors is the pressure to modernize. Energy-as-a-service offerings will become more popular to drive the adoption of low-carbon energy sources by minimizing upfront capital expenses. This is a significant opportunity for energy providers. To seize it, companies must review their existing technology programs to be sure they have the necessary capabilities to support managed service offerings. Technologies like cloud, 5G, connected edge, and remote sensing will be critical.
Companies are working on overhauling their business models, scaling and integrating capabilities, to support ambitious sustainability goals. This also requires encouraging entities throughout the value chain to adopt standard practices. Energy companies have a unique opportunity to redefine the industry by pursuing alternative fuel sources and business models. This is not a small undertaking, and 2024 will be just one year of an extended journey.
The energy transition is slowly but steadily gaining steam. On the bright side, there are opportunities for leaders to proactively invest in data tools and technology services that can push futuristic innovation and boost current efficiency. In this field, entities that strike the balance between creative invention and data-driven decisions will come out on top in an increasingly decentralised future.
