The Energy, Utilities and Resources (EU&R) sector continues to prioritise digital transformation to drive meaningful operational efficiencies while meeting the growing rise in energy demand and tackling climate change. According to cloud enterprise software provider IFS, 2024 will see how the industry accelerates their digitalisation with integrated systems and leveraging disruptive technologies such as AI and automation.
IFS’ VP of Energy Utilities and Resources Carol Johnston foresees three major trends that will have a profound impact on the EU&R landscape in 2024. Here, she details what these predictions are and how it will shape the industry in the new year.
Prediction 1: Demand for integrated systems with embedded AI and automation will increase by 50%
STAT: 59% of EU&R companies are increasing investment in digital transformation initiatives
CONTEXT: Digital transformation continues to be a central point of focus for the industry. In a recent PWC report, "digital transformation" ranked second only to hiring and retaining talent as a top growth driver for the industry.
This makes good sense, especially with the rapid adoption of AI, IoT, and other intelligent technologies.
As we move into 2024, the EU&R sector will continue its evolution towards a composable, integrated environment, one that is capable of supporting the innovation and rapid change underway within the industry.
While many organisations already rely on system data to help inform business insights, intelligent, integrated systems will drive new use cases in 2024.
No longer limited to supporting ‘go/no-go’ decision-making, intelligent systems will generate plans and recommendations to address disruptive events — including outages, sick leave and supply chain issues — before productivity is impacted. The approach is comprehensive, identifying possible constraints — limited parts inventory, resourcing — and other considerations within the proposed response.
For example, an intelligent system uses data from an asset performance management (APM) solution to flag that an asset is likely to fail within the next three months. Along with an alert of the impending failure, the system also utilises data from other modules — like scheduling and ERP — to make resource and scheduling recommendations that optimise uptime and lower overall costs.
Another example is where the parts inventory is insufficient, or the necessary components are located at a different facility. The system factors this into the schedule, along with supply chain constraints, so there is adequate time to ensure all of the required parts and people are available for the planned work.
Prediction 2: Water management will become a business imperative, with sensor and smart meter deployments increasing by 100%
STAT: 2 trillion gallons of treated drinking water are lost each year in the US
CONTEXT: Clean, potable water isn't a privilege, it's a life necessity. With only 0.5% of water on the planet usable and climate change dangerously affecting the supply, managing this resource is one of the industry's most important responsibilities.
Yet, according to the Federal Energy Management Program, the US loses 2 trillion gallons of treated drinking water yearly, often caused by undetected leaks due to water mains that were not adequately maintained.
Without immediate and effective management, our water supply will continue to shrink. A good example is Rio Verde Foothills, a master-planned ‘desert living’ community just south of Scottsdale, Arizona. After wells ran dry and no new wells were located, more than 500 properties in Rio Verde had to rely on water hauled in from Scottsdale. But in January 2023, Scottsdale stopped supplying water due to new drought provisions. The controversial move left hundreds without access to water. An interim measure was implemented in October 2023 as a temporary fix while the future of Rio Verde Foothills hangs in the balance.
In 2024, the industry will be under increasing pressure to manage the water supply proactively, with smart meter deployment increasing substantially to improve leak detection. This will result in an increase in revenues utilities can invest in new infrastructure and technology.
Prediction 3: Carbon capture and storage (CCS) practices will increase by 30%
STAT: A 45% reduction in carbon emissions is required by 2030 to combat global warming
CONTEXT: Most people know that the planet's future is at risk due to global warming and climate change, primarily driven by greenhouse gas emissions.
According to the Paris Agreement, global warming must not exceed 1.5°C above pre-industrial levels. However, the planet is already 1.1°C warmer and emissions continue to rise. To keep global warming to 1.5°C, emissions must reduce by 45% by 2030, reaching net zero by 2050.
Unfortunately, experts are already predicting our current efforts will not be enough. A recent International Energy Agency (IEA) report advises that the path to net zero is narrowing, requiring greater ambition and implementation, with stronger international cooperation to turn things around.
In 2024, we will see new practices implemented in an effort to get us back on track — specifically, on CCS. According to the Environmental and Energy Study Institute, increasing the storage and recycling of CO₂ are critical imperatives to stabilise the climate for continued human development.
CSS involves the capture of CO₂ emissions from industrial processes, such as steel and cement production, or from burning fossil fuels in power generation. The carbon is transported from the point of production — via ship or pipeline — and stored deep underground in geological formations to prevent it from returning to the ground surface or seabed.
Within the industry, some power plants have already implemented CCS strategies. For example, an ethanol plant in the US is recycling CO₂ to produce algae, processing it into livestock feed, biofuels and food and nutritional supplements. The programme has succeeded, and the utility plans to install the technology at all nine ethanol refineries.
The success of these progressive CCS programs relies on a unified cloud platform, capable project management, and technology that precisely tracks ESG objectives in real time to meet carbon reduction goals.
Navigating what lies ahead
The EU&R sectors have an interesting journey ahead of them. With critical developments at play, like global warming and the effects of a shrinking water supply they must actively incorporate AI and automation into their organisations.
By leveraging these technologies, organisations in the EU&R sector will be well-equipped to strategically utilise operational intelligence across all areas of their operations. This will enable them to not only maintain optimal levels of productivity but also demonstrate a strong commitment to excellence and success across the enterprise. While at the same time driving forward sustainable practices.
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