The Internet of Things (IoT) has been a key component in helping smart devices operate, connect vehicles to the Internet, make cities, homes and commercial real estate buildings “smart” and more. Going forward, IoT could be looked to as a solution to address the forecasted energy consumption increase, BizTech Magazine reports.
The world’s energy consumption is expected to go up by 48 percent by 2040, according to the U.S. Energy Information Administration. If that is the case, the energy and utility sectors will have to adapt to and keep up with operational and technological efficiency. To date, businesses have used IoT to keep pace. “IoT convergence within operations is becoming more important,” John Villali, a research director at IDC Energy Insights, told BizTech Magazine. Villali noted that linking asset performance, distributed energy and workforce management systems with smart devices and artificial intelligence (AI) could change the future of the industry. “Utilities are realizing this and moving forward in that direction,” he said.
In fact, almost 70 percent of the utility companies analytics firm Statistical Analysis System (SAS) surveyed said they believe that IoT will be essential to future success. Meanwhile, almost 75 percent of oil and gas companies and 80 percent of utilities have already deployed an IoT project, according to Inmarsat research, and are seeing the benefits of doing so.
IoT is changing energy and utility companies
IoT has helped a lot of companies break out of the siloed environment that can exist in the energy and utility sector, BizTech Magazine reports. The previous barriers between departments have come down, allowing companies to take a single, holistic view of operations, according to Villali.
“It’s the most efficient and cost-effective way to go about operations and utility,” he said.
There are several steps involved with accomplishing this feat, however. Companies have to first digitize their assets for connectivity, so they can be monitored, and data can be diagnosed in real time. Organizations must also be able to control their assets remotely and automate management with data analytics and AI. Predictive maintenance can bring these key steps together and provide energy and utility companies with the benefits that come with IoT.
Additionally, with IoT, smart sensors can spot and address equipment maintenance problems before they get worse. Companies can replace scheduled maintenance with condition-based maintenance. This will allow organizations to shift from conducting routine maintenance during slow periods to simply letting IoT devices find a piece of equipment that needs to be repaired.
What utility companies should know before embracing IoT
IoT will help make energy and utility sectors more efficient, organizations must also be aware of the risks. For example, any device connected to the Internet could be vulnerable to cybercriminals, who could access company data and hold it for ransom. The silos IoT breaks down also leaves openings for cyberattacks, according to BizTech. Organizations can’t simply deploy IoT devices; they’ll also need data encryption, next-generation firewalls and authentication technology tools.
Additionally, companies will have to think about how IoT can bring its previously siloed IT and operational technology (OT) together, according to Villali.
“The IT organization has to start thinking about the operational add-on and about the business case,” he told BizTech Magazine. “Then the OT organization has to be a little more tech savvy, in terms of collecting, understanding and using actionable intelligence to improve efficiency throughout the organization.”
In the end, the companies that embrace IT-OT convergence, “basically (win) the battle.”