Faced with a chaotic multi-faceted global context, the energy and utilities industries are moving at a pace once thought unthinkable in sectors that were labelled bulky, slow-moving, or culturally resistant to change. These sectors face an energy transition from fossil to decarbonized energy, the world’s broader sustainability goals including ensuring a just transition, cybersecurity threats to critical infrastructure, digital transformation that was ongoing before the pandemic and is now accelerating, energy security and geopolitical crises, cost of living and inflation pressures, and customer experience (CX) and management challenges.
- IoT leads energy and utilities investment: Our latest wave of Pulse survey data shows internet of things (IoT) technology at top of the energy and utilities industry investment tree for the next 12-18 months. 94% of these same executives also told us their IT and digital technology spending will increase over the next year. Our recent interviews with leaders in the sector echo the same—as across oil, gas, energy, and other utilities, from upstream through distribution through downstream, companies are looking to better map and understand their assets, operations, and entire value chains.
- IoT technology will play a vital role. Data will be fundamental to the energy and utilities industry’s various transitions. But it’s not a case of investing and implementing a platform and job done. Data must be captured in real-time across value chains—from physical operations to supply chain partners—standardized and converted into usable forms, analyzed, visualized, reported, and integrated into decision making at all levels of the organization from boardrooms to the operator huts.
- But look beyond IoT, and you start to see why energy and utilities firms need joined-up technology plans. To fully make use of a connected industry—generated by sensors linking the physical with digital, smart meters on the customer side, and all manner of new data points—myriad technologies and an aligned approach will be needed to pool and make sense of that data.
- Connected processes and assets will give rise to more advanced potential that includes digital twins, virtual representations of physical assets and processes on levels not seen before, and augmented and virtual reality (AR/VR) that is already showing great application in training and field work in dangerous or remote industry settings. Technologies like cloud, 5G, AI, analytics, and much more can leverage IoT data to add further understanding and management.
- The visibility that successful deployments of IoT technology give organizations, combined with all manner of complementary technologies, will revolutionize the energy and utilities industries. Smart connected grids, flexible dynamic pricing and consumer management, digital twins from equipment all the way to entire supply chains, and much more besides, are all being realized now. The coming years will show more of what is possible.
The Bottom Line: Investment in IoT technology tops the energy and utilities industry radars going into 2023. But it will be the combined use of IoT and all manner of digital technologies and platforms that will help organizations find new outcomes across growth, efficiencies, sustainability, and security.
Explore the HFS Pulse Dashboard
Take a look at the breadth of data in our Pulse Dashboard, which showcases data about current and future demand trends for technology and business services and related emerging technologies. See more here.
