Johnston, VP Industries, Energy, Utilities and Resources, IFS
companies in the energy, utilities and resources (EUR) sector, an effective
asset management strategy will be vital to stay ahead of the curve of an
unpredictable and volatile marketplace.
reacting to unprecedented climate events, looking at equipment lifetime
extension, redesigning, replacing, or making the power grid more sustainable,
asset reliability and performance will ensure success. Data and cloud solutions
will prove their worth in keeping assets optimized, now and in the future.
energy sector still faces unprecedented change – global energy consumption is expected
to sky-rocket over 30% by 2040 and even triple by 2025, according to McKinsey & Company’s Global Energy Perspective
2022. All the while, rising demands for a sustainable grid
continue to compress the industry.
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 lifecycle of existing assets, keep optimization to its fullest, and remain
agile in an extremely asset-intensive sector.
fact, IFS data shows 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.
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.
assets remain under immense pressure; climate change has given rise to extreme
weather conditions with heatwaves and wildfires that have damaged
infrastructure and sub-zero temperatures have triggered countless outages and
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
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.
key to asset lifetime optimization lives within the data – collected via
sensors, scanners, or customer demands reports. When data is coupled with
artificial intelligence-based predictive analytics, organizations can make confident
asset lifespans is now the most important key performance indicator 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
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.
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.
collection from smart meters does offer business intelligence, yet currently
most don’t use the information beyond billing purposes. Research by Statista suggests
that as of 2021, over 43% of U.S. households use smart meters, 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
than 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.
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.
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 – a major leap toward a decarbonized economy.
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
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.
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.
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.
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.
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.
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
integration and collaboration across multiple entities of the business is a
crucial factor for more than 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.
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.
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.
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
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. P&GJ