The Digitalization of the Energy Industry

Advances in technology are changing the way we see everything, energy consumption included. With smart houses becoming the new norm, how will so-called Big Energy be affected?

 

Energy is currently experiencing what is being called “the fourth industrial revolution” – after steam came electricity after electricity came automation, and now it is time for the next chapter: digitalization. Oil drilling, for instance, is no longer the guessing game it used to be, with drills being poked around in the ground until they hit black gold. With all the data available today and powerful computers managing it, it’s a much more precise operation requiring vastly less time and expense. For their part, many little guys of the world are stepping boldly into a world that seemed like science fiction just a few decades ago, equipping their homes with smart technology to save as much time and money as possible.

 

The digitalization of the energy industry is already taking place. The graph below illustrates how much various other industries are being and will continue to be affected.

 

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Here are a few predictions.

1. Energy companies will adapt blockchain technology

The idea of an industry as old as the energy industry merging with one as new as the blockchain technology industry might seem a bit unlikely at first glance, but such a union could have an enormous amount of potential for companies and consumers alike. The unavoidable transparency that would entail would be quite a shock for companies that have rarely had to answer to anyone, but that transparency would also likely result in more trusting, loyal customers unafraid of contributing to corporate corruption. When every barrel of oil bought or sold is accounted for and its price a matter of public knowledge, there is little room for exploitation or bribery. With today’s consumers becoming increasingly conscious of the consequences of their actions on other their local communities and the rest of the world, being an open book would be a decided advantage over more secretive organizations.

 

In fact, several energy companies have already taken interest in the blockchain, including over 100-year-old British giant BP, and much smaller and younger companies such as European start-up Grid Singularity. As seen below, the American energy industry is becoming more and more interested in blockchain’s potential as well.

US2. Artificial Intelligence’s capabilities will be utilized to their full potential

Google has already been analyzing how much can be gained by using AI to manage energy usage – a recent experiment has shown that energy expenses could be reduced by 15% by just letting its own neural network, called DeepMind, optimize the energy management system of one of their data centers. IBM’s Watson has been learning to predict the weather and has so far been 50% better at making forecasts than anyone else. Electric cars, a bit clumsy at first, are slowly winning over increasingly conscious consumers who don’t want their personal comfort to come at the expense of the planet. Though the partnership between eons-old oil and coal and 21st-century software may have seemed unlikely at first, it is easy to see how the two could prove a revolutionary combination. After all, the more energy is saved in wealthier countries, the more can be used to help millions out of poverty in the Third World.

3. Quantum computing will take things to the next level

Quantum computing, a complex marriage of old school physics and cutting-edge technology, is expected to be capable of solving problems today’s computers cannot at unprecedented speeds within the next few years. Often called “natural” computing, quantum computing takes advantage of the unusual properties that matter exhibits at the sub-atomic, or quantum level, including the ability to move backward and forward in time. Today it’s big data and AI, but tomorrow holds things even more impressive, just as unimaginable to many as self-driving cars were just a few years ago.

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Sources:

https://www.bcg.com/Images/Reshaping%20Business%20with%20Artificial%20Intelligence_tcm9-177882.pdf

https://www.greentechmedia.com/articles/read/four-predictions-for-blockchain-in-energy-in-2018

https://www.ft.com/content/4b40be6c-0181-11e8-9650-9c0ad2d7c5b5