Energy Sector (B2B) | I.O.T. Powering The Digital Economy

IOT powering the digital economy brought to you by Schneider Electric [Music] navigating the complicated world of the Internet of Things is a tough prospect for companies yet to embrace new technology but innovation in the energy sector is genuinely powering the digital economy so how do energy companies are saddled with working practices of the past innovate quickly enough to compete with the disruptors energy supply is changing to meet increasing demand with the decarbonisation of the sector and the increasing use of renewable energy new industries and technologies are being developed to make more efficient use of the energy we use the big change is the increasing role of the consumer generating their own energy and that is driving growth competition in the energy sector is high so in this program we're focusing on how the big energy companies are adapting to the digital revolution we'll find out what challenges they faced what were the missteps and above all will terr the opportunities that lie ahead and how about the energy companies falling in the digital age what risks are they taking to stay ahead I'll also be talking to the regulators who keep the energy conglomerates in check and find out what the future holds for the world of energy disruptive technology is shaking up the energy industry it's driven by consumers by regulation and by the innovators who develop it in the Internet of Things where everything's connected it's digital technology that's making the biggest impact in the most unlikely locations Glasgow based matrix is owned by the energy giant Eon matrix manages the energy consumption of many large companies such as supermarket operators where big savings can be made by switching equipment off during peak times and switching them back on when energy is cheaper it's called demand side response and it's saving companies lots of money it's all part of Yuans business strategy headed by their chief digital officer Matthew Terry's he's been looking after eons b2b operon since 2016 yeah so what we're seeing here is actually the consumption that are coming off of the buildings and the team here then work with the customers to actually try and put in place actions that they can take to actually improve the savings reduce the energy it's a fantastic example of Internet of Things the digital innovation is actually really I suppose more like a data or a machine learning pulling all of the data out of the systems of our customers and then actually using that data to help them be more efficient we work with a number of the the largest supermarket chains in the UK we're able to bring in all of the information all of the data from the locations that they're present on the high street or maybe even off the high street and actually be able to see how those those locations those buildings are actually performing are the lights on in the building do the lights need to be on in the building can you turn off the lights and you can actually do all of that type of things centrally and some customers we can save up to 40 to 60 percent of their energy services and save them producing more co2 which obviously is harmful to the environment so where does Ian see the business opportunity in rolling out digital innovation so we see it right across our business actually we're applying digital in all areas of of our business and ultimately it's just about our business it's about how can we engage better with our customers how can we make our employees work more efficiently how can we deploy our assets in a better way and we can also use digital to actually look at whole new business models which is really where we come in with things like matrix because matrix is really a software business now so we're actually delivering software to our customers to help them be more efficient Ian's a large company but with stiff competition from up-and-coming disruptors how have you adapted to the challenges that they have posed to you as a large organisation in a fast changing market when you move into into software and you're building new parts of your business out the time to market nowadays has significantly decreased so we as a company have to adapt to that we have to build new skills in our business we have to become far quicker in terms of delivering these type of these type of activities so we keep our engineering heritage our fantastic security and that we build into all of our products as well as then actually to be more agile more adaptive to the market what might be holding you back while you're doing that because as you said big organization legacy systems legacy infrastructure in place what we can do when we look at some of the new advances in technology is look at how we can also rebuild our existing business with digital at its heart so that it becomes really a more digital first business the way that we engage with our customers is it's it's supported in a wholly different way it's more as more of a radical approach to the way that that we can work so yes I think you know we get a lot of opportunities for that within the business from digital the US Energy Information Administration has predicted a 48% increase in global energy consumption by 2040 securing that supply so we can keep the lights on has got a lot of people scratching their heads but the answer could be microgrids islands of power generation that can operate independently when national grids become vulnerable Karen Morgan of dynamic energy networks thinks micro grids are the future well micro grids are discrete energy systems that can run in parallel or independent of the utility grid the excitement around internet technology and Internet innovation enables these micro grids to be deployed faster and transform the electricity markets you'll developing these micro grids these platforms sometimes in quite remote areas it sounds like there's no one-size-fits-all we can't rely on the infrastructure of today so we have to we have to think about the opportunity to be independent of the grid whenever we can we've had in the United States several incidences of security breaches in the utility markets well what happens if there is a security breach in a utility you have to be able to keep up and running the cost of of your other business going down can impact the business significantly not just in terms of revenue and profitability but has in some cases taken companies out of business so some of the technology that's very interesting that's underlying these microgrids enables us to do things like dispatch energy from my micro grid back to the utility it why is that important if you have two weeks of 105 degree weather in Texas and the utility grid is going to go down or they can't dispatch enough energy they look to the micro grids or the independent grids to provide that energy so it created this interoperability among in between micro grids and with traditional grids enables as much more flexibility for the end-user whether it's healthcare or institutional campuses or other it provides them with a long-term predictable price of their electricity which allows them to manage their business better it provides them resilience in whenever they need it provides some stability and security I'm maintaining this new energy infrastructure so that it does give us the power we need when we want it is essential thankfully there are new technology companies on hand to do just that so right now we've got a remote pilot who's actually flying the drone and always looking at the drone we have an inspection engineer who's operating the camera so the most important thing is the data not the actual drone so James Harrison is CEO of sky futures they've been in business since 2009 and used drones to inspect energy infrastructure in parts of the world initially their focus was on the oil and gas sector but now they're carrying out maintenance surveys on any vertical industrial infrastructure so we work with large engineering firms that may work in renewables or oil and gas and so we enable them to fly drones to collect visual static and thermal data of those assets we enable them to use software to extrapolate information from that so they can identify the anomalies the cracks the defects and then to predict the maintenance schedules so they can be more efficient and run them better in the future what is it about the digital innovation you're using that makes it different and unique because really think about it a drone it's a tool isn't it it's not itself a smart device they collect metadata so they collect the GPS position of the drone the angle of the camera and a bunch of other things as well and so what we do is we mesh that together with a video data which makes it completely different from other items today so this is pretty fantastic really set up for one of your rigs one of your drones would then have identified these these spots talk us through what we can see so here you can see there's a red dot obviously it's a severe issue you can simply with the mouse click on a high severity item here it takes you straight to the bit you're interested in so this is the flare tip this is what it tells you the problem is there's a short video associated with that problem and then a static image you can click on the still photo and then you have it right in front of you so it's really simple today we're doing kind of risk based analysis or risk based inspection so you say last time we looked at that oil rig you know the there was a crack it was this big we think according to engineering theory we need to go back in three months time you've taken one data point in in space and time what if you said what about the last 10 instances of the same problem you can then predict what it's going to look like in the future so it actually changes the whole maintenance lifecycle when you're spending hundreds of millions maintaining all in gas rig if you can tweak it by 20% they're very very big savings the energy sector is undergoing fundamental changes to the way it operates and those changes are being driven by the digital innovation that sweeping through all industries but the pace of that change could mean that some energy businesses fall foul of the regulators or find out how after the break energy companies are powering our hopes of businesses and our imaginations but to do that they need to stay on the right side of the regulators in the UK the energy regulator is often they monitor the energy market to ensure fair treatment of consumers and to do that they have strong enforcement powers Antti Burgess is associate partner for the energy systems division at off gem he joined the regulator in 2002 mates from the Office of Rail Regulation where he looked after European policy Andrews also chair of the European regulators smart goods coordination Task Force when it comes to a demand side response what's the digital innovation that that's really motoring that side of the sector the biggest innovation is software and the ability to do things in real time without people having to worry about where and when they're using energy and what we're seeing is more and more independent aggregators and other other businesses coming into this space and making life easy for businesses by developing software and developing technology which means that the businesses can concentrate on their own commercial timescales our own commercial deadlines and leave an independent entity to manage their energy use and save the money overall another area we're seeing a lot of digital innovation is when it comes to infrastructure maintenance so other regulators offering any incentives to businesses to help them along the way so that applies to all the network companies the companies that run the pipes and wires and the people that manage the system they have a network innovation allowance which is a pot of money they can spend on innovative ways of solving different problems we also run an annual competition so that network companies in partnership with parties such as universities or or startups even can bring forward ideas which could benefit consumers and can get consumer funding to develop those ideas where they can benefit the system we also have particular mechanisms to try to avoid a traditional bias towards investing in infrastructure when there are smarter ways of doing things through storage demand side response flexibility more active network management and we're starting to see a real change in the role of those companies and the way they act and that should decrease consumer bills over time where do you see the role of monopolies networks in this evolution and where does digital innovation fit into the bigger picture so we want the monopolies Network to harness the benefits of smart technology new ways of doing things but essentially they are buyers of services and we're saying that they should be neutral market facilitators what we don't want them to do is own storage and operate storage or owned some of the options they're having to weigh up because then immediately people start to think there's a conflict of interest or there isn't a level playing field a level playing field is exactly what big players like Eon want that's difficult to achieve when they have to satisfy regulators wherever they supply the consumer in all the markets that we operate in we will obviously work directly with a local regulator so there isn't really global regulators in that sense it's all pretty much actually decentralized down to the local governments in some cases actually regions as well depending on which country that you're that you're operating in so we'll be working with the regions or with the governments to ensure that we're complying with all the necessary regulations and what impact might that have on your digital solutions so I think that actually quite often you find that digital innovation is ahead of the regulatory changes so we're always there keen to work with the regulations try and bring it up to date with what's happening in the in digitization so if you can imagine if you're if you if you think into the future and you look at something like blockchain now blockchain is a totally decentralized system of being able to try and let's say transfer value between different parties without a central entity so it's quite interesting I mean who's going to tax it who's going to be regulating those those interchanges between the different different people so when you look at some of the changes in in the actual technologies you find that your regulation will have to probably adapt to catch up I mean we see that already in different industries like what we've seen with uber in London one of the challenges for us is obviously to be aware of what's out there so we've introduced an initiative called the innovation link and a regulatory sandbox we have initiatives where people with ideas who were maybe hitting up against some barriers in the industry can come and talk to us and if necessary work with us about how they can get their idea into the energy sector and into them market and maybe we can derogate from some of the rules that are there and that helps us in understanding what's out there and it obviously helps them to see how they can navigate their way through these sometimes tangled industry rules that you find in the energy sector sky futures isn't regulated by off Jim but James Harrison doesn't take his obligations any less seriously when it comes to the Internet of Things you just think of there's loads of data out there and we've got to keep that data safe so what do you do to make sure that that data was protected I think in any b2b environment today you have to be security first you have to absolutely think what what could happen to us you only have to look at people like Yahoo mass data breaches and the kind of damage that makes to corporate so for us everything is security first you know we are highly paranoid about what could happen and so we look to the the newest cutting-edge technologies to make sure we stay ahead so by using different cybersecurity initiatives we can look and see if someone tries to do a mass download of data if it's an employee or someone with the access permission so we take it a step further and so that's how we start and because we work with the biggest companies in the world from day one as a start-up which is pretty unusual we had that drilled into us from the very beginning it's fascinating to see this drone at work even though it's just another tool gathering data like a smartphone I cut tablets became to how all businesses will operate in the future would be how they interpret all that data and I'll find out how they'll do that after the break new technology is driving business forward in ways a few could have predicted a decade ago that innovation is changing the digital economy and business is embracing it but what about the wider world what are the implications on this new technology for society as a whole [Music] when you look at the energy sector I mean we're being impacted by a number of areas one is the the whole push to decarbonization and I think that that's an amazing opportunity for energy companies to really help the planet help the environment and and actually help support customers decarbonize we're also looking at decentralization so decentralization is is that we're not having huge generation in a central location it's moving more out to the customers so customers that are producing their energy it could be a customer that's putting solar panels on their roof or having a battery in their in their garage to a a business customer who's producing energy for their business activities but they don't need it at certain times so they can then just push that back into the grid so overall we're looking at a future where the grids become a lot smarter the devices that are sitting on the grids that that are either consuming energy or actually producing energy like a CHP a combined heating and power unit can actually decide when they push energy back into the grid so that it's maximizing the the efficiency of the consumption of energy at any time and as you're looking to the future what was going to drive that is it going to be artificial intelligence is it going to be machine learning is it going to be a combination of everything that you're already using to some extent now so I think definitely machine learning artificial intelligence is is definitely the the buzzword it is the one of the very interesting new technologies that's that will allow companies to actually change the way that they work and apply smarter algorithms to their assets they're the way that people are working in fact so if you look as a great example would be as is that when we're running our wind farms we want to be able to maximize the energy that we're able to produce from those wind farms by actually using artificial intelligence we're able to manage each individual turbine on an on an individual basis so they're all maximizing each other they were kind of talking to each other to be able to say right actually you need to sort of offset yourself a little bit so that well I get more energy or produce more energy from the wind and from the turbines that sit behind it so I mean I mean it's such a it's very very cool stuff and it's just a for us it's a technology that we want used to try and improve our business will it be customer expectation or the availability of the technology at your fingertips that's going to drive digital innovation in the future so I think it's it's both customer expectations are increasing all the time the way that we run and manage our lives is becoming totally connected and ultimately I think everybody's expectations keep increasing ratcheting up all the time we're so connected in our day to day life that you know that's just become a norm now and in companies that can't adapt to that or can't provide those same levels of service they fall behind and that's something that we really need to avoid for the king of the drones James Harrison his focus is on the gadgets that capture the data he'll use in the future so it's interesting we're talking about drones and Internet of Things but it's actually not just drones that really changing the Internet of Things so we've got clients now that don't even use drones right so we're clients they're using cameras they're in GPS denied environments and actually we can take that data and put it through the software and it works in exactly the same manner and we're linking it all together so they can visualize their asset so if you've got if you're doing a tunnel for example you can recreate a 3d model of that tunnel and you can tag where exactly the anomaly is our facade contractor needs to go fix it they can just log straight in with the permissions see in 3d and go I know exactly what I need to go fix they take the right tools and they can have done an efficient manner so that's also what we're kind of working on as well so it's it's not just drones it's your smartphone it's a helmet cam everyone is a data collection device you know anyone who hasn't wears a hard hat for work in the future will no doubt have a small camera on which is continually inspecting their work site it might suddenly see a problem that they're about to walk into and virus SmartGlass tell them to stop it's unsafe to proceed any further that's where we're going now a lot of what you're talking about is technology that we've got at our fingertips now and but that is being used by big corporations big energy companies with big budgets it sounds like in the future it's the technology that's going to be able to be applied to organizations large and small absolutely I think you need to focus on the big companies because they're the ones who actually pay for this development and actually as you've already heard they've the ones who save lots and lots of money today if you've got big infrastructure big business you can save bigger line items that then translate it down as a technology matures and hardens everyone can then use it from the person who just wants to have a look at their own roof they don't even have to do anything it might be a community drone that just flies around and looks everyone's everyone's roofs when the when the sun is shining when the when the wind is really you know they're hardly moving so they will choose the best possible time to capture all this data to in to interfere or to not interfere at all with with people and just get on with the job so you'll never know what's happening these things will just happen on their own in the background so where do you see your business in ten years time so will be the key enablers for this for this whole market so we want to kind of be sitting in the background enabling all these businesses to do incredible things and to make everyone's life much more efficient and to bring down the price of energy ultimately it sounds like all of this technology is going to have an impact on society as a whole in what way do you think that's correct and that your company's going to play a role in that well simply in terms of the Industrial Revolution took people from you know handweaving things to machines doing it everyone thought oh my goodness we're gonna be out of a job and have the Luddites smashing up the factories this is another revolution towards AI so I think what we're seeing now is that people are worried about oh my god I'm not going to have a job I'm not going to be able to you know create my inspection reports actually one engineer will now be quality assuring 2050 maybe a hundred reports a week and using that expertise absolutely where they need it rather than spending their time and focus on things that actually a computer can do much better so I think it's it's creating much more highly skilled jobs and making things more efficient I mean we got enabling us to do much much more in the energy sector supply and demand is everything increasingly Internet of Things devices are being used to gather the data to manage that supply efficiently to maintain existing infrastructure and to give the businesses using it the best deal that digital innovation is powering growth in economies around the world and if it continues it could help secure a cost-effective energy supply in years ahead [Music] [Music] IOT powering the digital economy brought to you by Schneider Electric

Channel: CNBC International TV

Views: 8,964

Rating: 4.9459457 out of 5

Keywords: CNBC international, CNBC Life, energy internet of things, energy iot, iot energy, internet of things energy, internet of energy, energy sector, energy sector 2018, energy sector tech, energy sector technology, energy sector technologies, energy sector news, energy business, energy business technology, energy business internet of things, energy business intelligence, iot, internet of things, energy digital revolution, digital revolution, digital revolution energy

Id: n3RFxBwNI2s

Length: 25min 20sec (1520 seconds)

Published: Wed Feb 14 2018