Nov 28, 2022

Digitizing the utilities industry and enabling the net-zero journey


Security, resilience, and sustainability remain top priorities for utility firms as they pursue digital transformation to improve safety and performance, reduce costs, and manage risk.

Transitioning business and operational processes foster buy-in, address market challenges, and transform mindsets with the help of industry best practices. True transformation occurs here, allowing digitalization to fully realize its benefits. 

As global climate awareness grows, several geo-specific regulations and policies have influenced utilities to seek out new ways to digitize, decentralize, and decarbonize.

Utilities set to invest more in Technology

Gartner predicts that global technology spending in the energy and utilities market will reach $223.7 billion by 2025. By 2025, 35% of energy utilities will drive at least 30% of their businesses through digital platforms based on cloud-native technologies, according to IDC.

As major providers aim to become net-zero energy firms by 2050 and drastically reduce emissions from operations as early as 2030, the sector is steadily making investments in digital transformation to support safe operations, boost productivity, increase sustainability, and improve emission monitoring.

In the Utilities technology landscape, operational technologies (OT), such as supervisory control and data acquisition (SCADA) systems, distributed control systems (DCSs), and programmable logic controllers (PLCs), are already in place. However, to optimize automation, Utilities enterprises will soon have to introduce more cloud adoption, which becomes core to support assets and operations. 

Utilities are responsible for crucial infrastructure and the reliable distribution of energy and water to millions of customers. Cloud technologies are core for facilitating a more comprehensive energy system, which entails managing DERs, regulating renewables, and enabling deeper insight and control into energy usage. Beyond strengthening the energy system, the cloud provides the opportunity to harness data and design platform energy economies and open innovation.

Regardless of industry challenges, Utilities are increasingly deploying hybrid cloud infrastructure to improve operational efficiencies. Utilities can store critical and sensitive data on-premises while implementing cloud-based visualization and analytics with the help of robust integration. This allows Utilities companies to consolidate all relevant ESG data into a single source of truth, which can subsequently be distributed, analyzed, and reported to fulfill sustainability goals.

Energy and utility organizations are being transformed by the cloud, which also has an impact on business operations and how companies respond to customers’ demands. The cloud increases business flexibility and scalability while improving asset reliability.

Furthermore, environmental standards and regulations are driving enterprises to become more sustainable, and energy providers are learning that automation is one of the best approaches to attain higher efficiencies and move towards distributed energy sources.

Why is digitalization becoming crucial for the Energy & Utilities industry?

Cloud computing and cybersecurity saw an uptick during the COVID lockdowns as the number of remote working arrangements increased.

According to a report from the technology intelligence organization, ABI Research, businesses worldwide are anticipated to spend up to $15.6 billion on digital technologies by the end of this decade alone as they attempt to address existential, operational, and commercial challenges.

Utilities can leverage digital to assess the health of their assets, and support initiatives to boost low-carbon operations and renewable energy production. The sector, which also aims to proactively prepare for the energy transition, has identified the safety of operations and protecting assets against cyber-attacks as a top priority. However, network security is rapidly becoming more crucial for the C-suite and governments alike.

Digitalization could be an enabler of net-zero

The digital revolution is fostering rapid decarbonization across the energy sector. As per World Economic Forum, digitization has the potential to reduce greenhouse gas emissions by 15%. And, since the world's remaining carbon budget is extremely limited, every reduction counts. Modern technologies are allowing Utilities companies to cut their emissions, paving the road for a net zero future.

One such technology is the Cloud, which is key to lower emissions. A report by Accenture Research estimates that faster migration to cloud computing could result in carbon reductions equivalent to removing 22 million cars from the road.  Several utility providers have already begun their cloud journey by gradually implementing infrastructure and software solutions. Security, data, and control concerns were mainly aspects of the past. Through modern ways of working and disruptive technological innovation, moving certain workloads to the cloud will improve business agility, and resilience, optimize IT spending, accelerate transformation, and elevate enterprise security for Utilities.

One of the most efficient ways to reach ESG goals smartly and efficiently is through a scalable, uniform tech stack that leverages the best possible cloud platform across the enterprise. A connected cloud strategy is an answer that most utility firms are turning to. This enables leaders to track sustainability goals alongside the standard business KPIs from now through 2050.

The ambitious net zero targets will necessarily require significant infrastructure investments. Organizations must progress from siloed IT systems to cloud-based platforms strategy that provides real-time data for real-time results. According to IDC, with modern infrastructure in place to manage utility assets, field services support, and personalized customer engagement, utility providers will see productivity gains by up to 18%.

Working together to reach net zero

Recognizing the imperative for lowering greenhouse gas emissions, energy authorities around the world are establishing and amending their policies and regulations. Even with tougher regulations, the International Energy Agency's (IEA) report indicates that net zero-emission targets will be practically possible only by 2070. Focused CO2 emissions reductions through diverse measures such as demand reduction, hydrogen use as a fuel, and electrification are required to meet clean energy targets by 2070. To attain net-zero emissions by 2050, the Utilities sector will need to make significant investments, fundamental structural reforms, and accelerate innovation.

To successfully adapt for the future, it is reassuring to see companies across all industry sectors proactively investing in key technology fields, particularly securing cloud adoption and advanced data analytics, which can assist them in making sense of their incredibly challenging environment and making informed business decisions.

With a net-zero future now a realistic possibility, utility providers, investors, and respective leaders must increase collaboration and partake in industry-wide data exchange to promote the energy transition agenda. Digital disruption is a trend that is certain to continue at an unprecedented rate, and long-term digital partnerships are fundamental for building and establishing ecosystems that recognize emerging transformation drivers, successfully deploying innovative technologies, and unlocking new digital decarbonization opportunities.

Microland’s Secure and Compliant Cloud (SCC) for utilities

We have established that going digital is certainly one of the solutions to address challenges faced by utility providers. To accomplish this, a robust cloud strategy is essential. For most digital transformations to happen, whether they involve assets, clients or even the workforce, it requires a secure cloud strategy at their core that complies with laws and regulations. 

Regardless of where they are in their cloud journey, security is still the top priority. The increased number of assets in a decentralized, distributed grid, and the required digitalization for synergy make utility networks more complex and completely change the threat environment.

Taking all of this into account, Microland has designed a Secure and Compliant Cloud for Utilities that provides a strong cloud framework and a much higher level of resilience and compliance, enabling Utilities enterprises to manage vulnerabilities by ensuring compliance, saving on operational expenses, boosting reliability, and enhancing customer experience, helping them power head in their sustainability journeys.