Business shift

How to better understand the energy we produce through smart grids. By Graeme Wright

In December electricity network operators pledged to deliver £17 billion of energy system benefits by 2050 through the creation of a smarter, more flexible power grid.

The Internet of Things (IoT) is estimated to generate $13 trillion in annual sales by 2020. It’s been touted as one of the most prolific business opportunities of the century, and for the energy sector, it’s poised to drive significant efficiencies in energy management.

However, our latest survey – Tech in a Transforming Britain – revealed that six-in-ten utilities companies are not planning to implement Internet of Things (IoT) technology in the next 12 months. Energy companies need to take a fresh look at the technologies available that will help them better understand – then manage – the energy they produce, where it’s going and how it is being used or wasted.

While this will empower us to be more efficient about the way we consume energy, it’ll also see energy companies shift the way they do business, what services they offer and the business models that drives their revenue and margin.

The IoT opportunity
Through the use of IoT, specifically Industrial IoT (IIoT) companies have an opportunity to conserve energy in a smart and efficient way, by being able to detect production through sensors, and adjust levels through a single technology platform. The benefits of implementing IoT technology include cutting costs and CO2 emissions, improved quality and safety, better staff and consumer engagement and less wastage. The value in investing in IoT comes from being able to use the data produced to streamline the services offered by their business.

Working closely with IT and technology teams to come up with an effective and safe application of IoT technology will be critical. After all, when implemented correctly, IoT presents huge opportunities both for coping with increased energy demand while driving productivity for a connected workforce. However, security has to be built in by design; it cannot be an afterthought. More specifically, IoT technology can be particularly revolutionary for the smart grid.

In a smart grid what you are trying to do is control supply and demand. It is something we have to think about as we move to non-carbon generation – whether it is wind, solar or sea – we’re still using a nuclear power station to create the base of energy. Where it can help is that while we know there are peaks when people come home, having sight of what is going on across multiple streams of supply is critical. Managing that peak is the next level. Thinking about how to store energy, or turn supply up and down as needed requires communications and sensors built into the infrastructure itself.

This is where technology such as artificial intelligence can come in and turns things on and off using algorithms that can predict when a peak will occur.

Putting the power in the customer’s hands
With rising energy prices leading customers to question the value they’re getting from energy providers, IoT can help energy companies change the way they do business. It is about giving control back to the customer, and thinking about how to engage, influence and incentivise people about their energy usage, particularly during periods of limited or over supply.

With an increase in IoT devices, there are risks that any business would need to mitigate. As more machines are built with their own IP addresses, there is going to be a greater need for tougher security measures to protect them and improved ways to audit the trading and use of energy at the point of consumption; Blockchain technology has a lot to offer here.

There is also the communications piece. A system built on end points talking to each other is inevitably reliant on having a strong and stable network. Last year the government announced a £400m Digital Infrastructure Fund in a bid to boost ‘full fibre’ broadband across the country, so we are moving in the right direction, but the security frontier will need to be tackled before we’ll see widespread ownership of smart energy management. That said, if we can get this right, the benefits for customers will be enormous, and once people start to see the savings adoption will soar.

The IoT grid
The face of energy management will shift in the next ten years. Rather than consuming it and paying their bill each month, consumers will be in control, making them more incentivised to reduce their consumption at peak times and store it at times of over production. Right now, that’s not an expectation consumers have, but as we’ve seen with many other industries a need for immediacy and control will come, and utilities companies need to invest now to make sure they’re ready.

Fujitsu UK & Ireland
Graeme Wright is CTO Manufacturing & Utilities, Fujitsu UK & Ireland. Employing over 9000 people, Fujitsu UK & Ireland promotes a Human Centric Intelligent Society, in which innovation is driven by the integration of people, information and infrastructure. It is committed to Digital Co-creation, blending business expertise with digital technology and creating new value with ecosystem partners and customers.

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