Today’s energy sector still faces unprecedented change — global energy consumption is expected to sky-rocket over 30% by 2040 and even triple by 2050. All the while, rising demands for a sustainable grid continue to compress the industry.
A diminishing skilled workforce and finite capital has meant resources are more limited than ever before, and so it’s no wonder that energy companies are increasingly turning to predictive asset maintenance solutions that will extend the life-cycle of existing assets, keep optimization to its fullest, and remain agile in an extremely asset-intensive sector. In fact, 29% of energy and utility organizations worldwide argue that the adoption of enterprise software systems has been key to improving asset lifecycle management and operational efficiency.
Buying brand new isn’t always the most viable route: The clue is in the data!
Currently in the U.S., most assets in the EUR field have surpassed their original intended lifetime, with over 70% of assets now more than 25 years old, but still operating. Energy assets remain under immense pressure. Climate change has given rise to extreme weather conditions with heat-waves and wildfires that have damaged infrastructure and sub-zero temperatures have triggered countless outages and failures. Despite all this, energy assets are required to keep pace with ever-rising consumer demands, alongside expensive failure and maintenance costs — it’s meant that having a predictive EUR asset maintenance program is no longer an option, but a necessity. Organizations are catching on. Over 60% of energy organizations in North America state that it is now important to move from scheduled to predictive asset maintenance to improve asset maintenance and monitoring.
The key to asset lifetime optimization lives within the data — collected via sensors, scanners, or customer demands reports. When data is coupled with artificial intelligence (AI) based predictive analytics, organizations can make confident investment decisions on the most critical areas of the business. Extending asset lifespans is now the most important KPI for 35% of North American energy companies when looking for an enterprise solution—27% want to improve asset reliability and a further 24% are keen to improve resource utilization. For energy organizations, a full and complete understanding of their asset position helps check for condition updates and expose harmful trends such as performance degradation. Forward-thinking organizations will ensure that asset investment strategies harness this data to decide whether asset lifetime extension, replacement, recycling, or redesign is the most viable route.
For example, the average life expectancy of a solar panel is 30 years, but research from Greenmatch suggests that after 25 years the panels will remain 80-94% efficient. If decommissioned correctly, 96% of the panel can be recycled to produce more units. This is where data will provide energy organizations with the insights to make a strategic decision on the most practical route for the solar panel.
Mitigate unprecedented events by unearthing meaningful data insights
For many energy organizations, the vast amount of circulating data can be overwhelming, particularly as most have no automated filtering system capable of extracting meaningful information. Data collection from smart meters does offer business intelligence, yet currently most don’t use the information beyond billing purposes. Research suggests that as of 2021, over 43% of U.S. households now use a smart meter, which gives them a huge scope of meaningful insights on consumption. Data such as this can then be used effectively to underpin strategic asset investment and predictive maintenance programs.
Over half of EUR companies now consider data analytics to be an important or very important emerging technology for future digital transformation strategies. For example, automated monitoring and reporting can analyze smaller outages and frequent micro-events that can indicate early warning signals of major weather issues which can be harmful for both consumer confidence, brand reputation, and revenue. Areas deemed high risk, such as locations with extreme heat, can leave ground powerlines prone to wildfires, so may benefit from financial modeling — software that can estimate the total cost of ownership based on maintaining existing infrastructure or replacing with buried linear assets.
The journey to a sustainable grid made possible with a tech helping hand
Keeping pace with accelerations in energy demands won’t be the only movement on energy company radars — research from McKinsey predicts that by 2050, the energy mix will be 80-90% hydrogen, this is a major leap towards a decarbonized economy. But the drive to reach net-zero emissions will require sustained year-on-year investment in renewable infrastructure and modifications to existing assets, before the opportunities and benefits of solar, hydro, wind and hydrogen power can be realized.
Forward-thinking North American EUR companies have already begun initial plans, with nearly 50% planning to establish a dedicated ESG practice team as sustainability continues to be a key business driver—but technology adoption barriers such as a lack of skills and knowledge and changes in legislation, stand in the way of this progress. Alongside this, research suggests that electricity transmission systems must expand 60% by 2030, and even triple by 2050.
As a result, organizational structure and asset ownership is seeing significant change. Joint ventures are the biggest focus for applying emerging technologies, with just under a fifth of North American EUR organizations pinning the spotlight on new business opportunities and joint ventures. The shared ownership of grid assets, in addition to community and private micro-grid utilities are all also increasing in popularity, as the sector battles to keep pace with rising costs and the need for continued investment.
Additionally, the move to renewables, micro-girds and use of power beyond the grid has caused businesses to lease transmission and distribution networks, instead of being grid operators. Technology such as digital twins can be a key facilitator for ensuring all stakeholders co-exist and communicate to become more agile and innovative in seizing new opportunities. By providing a software-based replica of business assets, processes and systems, digital twins can increase predictability while lowering risks and supporting the overall strategic vision of the business.
Data visibility begins at the software infrastructure level
The solution lies in the correct enterprise asset management cloud software, with data visibility and modeling capabilities that give organizations a real-time, 360-degree view into their asset position. To retrieve accurate analytics, energy companies must move to one, centralized version of the truth and this information must be made visible to multiple stakeholders and joint entities to allow for faster decision making and increased control. Tight integration and collaboration across multiple entities of the business is a crucial and leading factor for over a third of EUR organizations when adopting enterprise software systems — it provides the platform for them to plan for ‘what if’ scenarios and transform them into ‘what next’ scenarios for infrastructure and assets.
It’s about optimizing what businesses already have and an effective asset management solution will help drive decisions on how and when assets should be managed, replaced, refurbished, scrapped, or renewed. An unpredictable landscape of new investment projects, complex and linear assets, net-zero goals, and rising energy demands poses many challenges. The success of energy organizations will depend on a solution that automates the management, optimization, maintenance, and overall performance efficiencies of existing assets into a single, seamless platform.
Asset optimization in the energy sector—challenges and opportunities for a new era
Projects within the energy sector are complex and translating plans into action will require complex orchestration across the business. As energy demands continue to rise and new assets are deployed, existing assets have their work cut out to operate in conditions they weren’t originally designed for and for longer lifespans.
Underlying technology can hold real value when looking to create an effective and proactive asset management program—from increased reliability and asset performance to well-informed and data-driven decisions, the benefits on offer for energy organizations are clear to see.
