The purpose of digitised energy systems is to identify who needs energy and deliver it when needed, at the right location and at an affordable cost.
New business models are emerging that make this possible, while some century-old models may be on their way out.
Adding to this transformation is the very dynamic nature of energy systems, which are often built on large, long-lived infrastructure and assets. Digitalisation holds the potential to build new architectures of interconnected energy systems and machines, including breaking down traditional boundaries between energy demand and supply.
Oil and gas companies have used digital technologies, notably upstream, and significant potential still exists for current technologies to further enhance operations. New technologies could improve production efficiency by up to 20 percent, using advanced processing of seismic data, sensors and reservoir modelling.
In the power sector, The International Energy Agency (IEA) shows that digitalisation has the potential to save around $80bn per year globally, or about five percent of global annual power generation costs. Technology can, for instance, support reducing operation and maintenance costs, improving power plant and network efficiency, reducing unplanned outages and downtime, and extending the operational lifetime of assets.
The digital technologies that make all these benefits possible also use energy”
The biggest potential for technology is its capability to break down existing boundaries in the energy sector, increasing flexibility and enabling integration. Energy demand control could provide 185 gigawatts (GW) of system flexibility globally, approximately five times the installed electricity supply capacity of the UAE. This could save $270bn of investment in new electricity infrastructure that would have otherwise been needed.
Ironically, the digital technologies that make all these benefits possible also use energy. As billions of new devices become connected over the coming years, they will draw electricity at the plug while driving growth in demand for – and energy use by – data centres and network services. However, sustained gains in energy efficiency could keep overall energy demand growth largely in check for data centres and networks over the next few years.
Government policies and market design are vital to creating digitally enhanced energy systems onto an efficient, secure, accessible and sustainable path. Digitalisation is one of the tools which can assist in providing electricity to the 1.1 billion people who still lack access to it. It is also a tool that can help reduce the energy demand of a country by 10 to 30 percent and therefore the need to invest intensively on power generation and distribution.
Further cost-effective energy savings can be achieved through advanced process controls, smart sensors and data analytics. In buildings, available technologies can cut energy use by 10 to 15 percent by using real-time data to improve operational efficiency. Smart thermostats, controls and sensors can anticipate the behaviour of occupants to better plan heating and cooling needs.
The potential for energy savings in the UAE are even greater – possibly closer to 25-30 percent. With continued economic and population growth, cooling and energy needs will increase and the existing demand for energy from buildings now represents a readily available hidden resource. Improving energy efficiency on the demand side is a first step in accurately re-evaluating the need for investment in power generation and distribution.
Digitalisation is affecting jobs and skills in a variety of energy sectors, changing work patterns and tasks with a need to improve energy auditing, better communications tools and cooperation with facilities management teams. There can often be a disconnect between building end-users, operators and owners over the potential for energy efficiency, energy savings using existing technologies and existing energy engineering skills.
In the case of building retrofits to unlock hidden resources lying in their building, financing any upgrades might not be part of the plan. This has pushed private and public entities to offer financing schemes enabling these energy performance contracting projects at no up-front costs to the customers and only share the savings generated from the works.
If the identified energy saving potential for your building consuming $3m a year was 20 percent, that would be a $600,000 saving per year. Would you do it? If not, you are basically throwing $1,800 out of the window every day.
The multiple positive impacts of energy efficiency, not only on the economy but also on other social and environmental levels, truly reflect the sustainable character of this discipline. Everything that we need to live depends either directly or indirectly on our natural environment, resources and the planet as a whole.
Improving the conditions under which we and our environment, planet, can exist in a productive harmony to support present and future generations could be considered as a moral obligation.
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