IoT Energy: 6 Ways the IoT Benefits the Energy Sector
The Internet of Things (IoT) is a fast-growing market that was valued at US$0.7 trillion in 2020 and is projected to reach US$4,5 trillion by 2030.
Due to an increased demand for the cloud-based IoT solutions that enabled businesses to survive the pandemic, this prediction for 2030 seems more than realistic, especially when compared to pre-COVID times.
The energy sector is no exception. Growing enterprise investment in IoT projects will drive the IoT energy market to a predicted US$35 billion by 2025.
Projected value of the global IoT energy market. Source: Statista
MadAppGang has experience developing artificial intelligence (AI) and IoT applications for energy companies (for example, the Evergen app). Based on our domain expertise and in-house research, we believe the impressive growth of the IoT energy market can be attributed to the business benefits IoT, which extend to energy companies.
In this blog post, we’re listing the main applications of IoT energy solutions, ones that already offer energy operators significant value. Think of it not as an overview, but an attempt to convince you to join the progressive IoT community. Before we go any further, let's clarify the IoT concept.
What is IoT?
The Internet of Things is a network of connected devices: tools, machines, and sensors that communicate with each other, as well as with cloud storage, where information is aggregated. Connected devices can also receive remote commands, for example, you can switch on a hoover at home while in the office. To get a full picture of what IoT is, let's examine its main components:
- Hardware – Various sensors and devices that collect data from the environment and/or perform an action. For example, a security system with a motion sensor that detects movements and heat (data collection) and security alarms for detected irregularities (performing actions).
- Connectivity means – Hardware data needs to be transmitted to the cloud, and the hardware needs to be able to receive commands. This is accomplished thanks to traditional forms of connectivity, such as WiFi, or with more recent technologies including 5G or LoRa.
- Cloud-native software – Simply put, this is a complex management system that analyses data from sensors and makes decisions. Let's take an automatic irrigation system as an example. If the sensors detect rain, this information is relayed to the management system, which, based on received data, doesn't activate the sprinklers that day.
- User interface – Users need a convenient way of interacting with IoT systems, like a web or mobile app. For example, Samsung sells smart household devices: fridges, TVs, and so on. To complete the offer and help users take full advantage of smart technologies, the company created its SmartThings app. Through this app, one can remotely monitor, manage, and control IoT Samsung devices.
By combining these components, you get a smart system that’s not only fun (try remotely controlling your grandpa's TV for a giggle) but a system that offers a lot of business benefits. Think effective asset and operation management, improved work safety and productivity, and so on.
Like many others, the energy sector has increased its adoption of this advanced technology. In Europe, IoT in the energy sector even has its own name: Internet of Energy (IoE).
Six uses of IoT in the energy sector
During the second half of 2021, IoT energy projects garnered 4% of total investments in the sector, a number that’s forecasted to grow progressively. With the help of technology, providers are able to move forward in a number of ways. Here are some examples of how IoT works for the energy market:
1. Smart asset monitoring improves grid reliability
IoT technology permits real-time automatic equipment monitoring, virtually eliminating human error. In this way, equipment breakdowns are spotted and corrected immediately.
Using IoT technologies, Florida-based power company Duke Energy created a self-healing grid system that reconfigures itself automatically in case of outages. The company says that when a problem arises, their system automatically locates faults, isolates damaged pieces of line, and reroutes power. Digital sensors at substations and on powerlines detect problems and communicate with the control system. Once a problem is detected, switches isolate the affected section.
2. Helps prevent breakages
Intelligent IoT systems detect potential issues before they actually arise so operators can take preventative measures instead of having to deal with actual damage. This helps reduce repair costs and it increase productivity. It also helps providers stay on schedule and meet delivery expectations.
One example is Chevron, a multinational energy corporation based in the United States. Chevron relies on IoT development for predictive maintenance that helps identify damage to pipelines and corrosion. Throughout the pipeline, sensors track pH levels, aqueous and gaseous CO2/H2S concentration, and the pipe's internal diameter and thickness. Data from real-time sensors is fetched and sent to the cloud platform for evaluation, analysis, and future predictions.
IoT for predictive maintenance. Source: Jemully
3. Enables advanced energy management
When coupled with AI and machine learning (ML) algorithms, IoT can predict power supply and consumption, as well as manage energy demand. Companies can use these insights to develop data-driven strategies for energy production and storage.
For a better understanding, let's consider MadAppGang's recent project, Evergen. Our team developed an AI-powered platform that uses weather and satellite data, numerical weather prediction models, and statistical analysis to make energy consumption predictions. These predictions help the system to store enough solar power and then distribute it during rainy days.
The Evergen app.
4. Brings automation to the next level
The energy industry is already highly automated but with IoT and new computing technologies, we can create cutting-edge automation solutions. For instance, UK power and gas supplier E.ON uses IoT to control even the most hard-to-reach facilities such as wind farms in the Scottish Highlands.
Another example is Hive, a startup that, in collaboration with British Gas, created an IoT solution to control electricity, heating and hot water remotely from a mobile app. If you've ever worried you forgot to turn the iron off before you left the house, you know how this system can offer peace of mind (and save your money, too).
Hive, British Gas’ IoT solution. Source: British Gas
5. Promotes clean energy economics
IoT brings the advanced concepts that once seemed unrealistic to life. For instance, it helps sell solar power from one household to another. The TransActive Grid project created a connected microgrid network using a combination of IoT and blockchain technology, enabling the first peer-to-peer energy exchange. In the experimental grid, smart meters and blockchain are used as hardware and software layers respectively. Smart meters connect homes to the blockchain-powered software to monitor electricity consumed and generated, as well as manage neighbourly transactions.
TransActive microgrid network for energy. Source: ScienceDirect
6. Facilitates regulatory compliance
Combining IoT with analytics tools helps organisations comply with current energy and environmental regulations. By having sensors across your site, you can make informed decisions (or leave this job to an Al-powered energy program) and control facilities remotely. For instance, selecting assets that will be switched off during peak periods. This could be especially useful for compliance regulations like P272.
Challenges of using IoT in the energy industry
Despite the benefits of IoT for the energy sector, there are some challenges to deploying and using IoT solutions. Let’s name a few:
- Connectivity – Since current solutions primarily rely on centralised cloud systems, it's difficult to synchronise thousands of IoT devices and machines that make up an enterprise-scale energy IoT platform. Meanwhile, the world's IoT ecosystem is growing at an exponential rate, making connectivity a big challenge for the next decade.
- Security – Most IoT-based energy systems are deployed across large geographical regions and rely on centralised cloud systems, making them vulnerable to cyberattacks. Blockchain and distributed control systems may offer a way to overcome the challenge.
- Compatibility and integrity – To connect a single device to a large number of devices, IoT uses a variety of technologies with different standards. Such inconsistency between devices can be addressed by defining common rules, information models and protocols that are accessible to everyone.
- High cost – Spending on sensors and advanced software is just the tip of the iceberg. Many organisations find equipment upgrades the most expensive part of fully benefiting from IoT solutions.
There’s no doubt that most of these challenges will be overcome in the near future. This will accelerate IoT adoption and advancements towards a safer, cleaner, and more economical energy industry.
Today’s realities and trends show that the entire energy sector will eventually rely on IoT in every aspect, from microgrid safety monitoring to automatic energy-saving systems.
If you’re still considering whether to incorporate IoT into your organisation and facilities, don’t hesitate. You need it to save money, human and natural resources, to improve security, and to provide better customer service. For those concerned with the complexity of undertaking an IoT transformation, remember that partnering with experienced professionals will help.
You can count on MadAppGang for consulting, helping your in-house team, or engineering an IoT platform from scratch. To bring real value to your business, we employ cloud technologies, AI, ML, and other sophisticated tools and services. Aside from developing advanced IoT software, we can also help you reduce your cloud costs and ensure that your processes align with the cloud-native ethos.