(WO) – Almost half of senior energy professionals plan to integrate artificial intelligence (AI)-based applications into their operations in the coming year, according to a new report by independent energy expert and insurance provider DNV.
DNV’s latest Energy Industry Insights special report, “Leading a data-driven transition,” is based on the 14th annual survey of nearly 1,300 senior professionals and in-depth interviews with industry leaders and experts.
Among other things, the survey highlights the crucial role of digitalization in the transformation of the energy sector, affecting generation, transmission, distribution and consumption. AI-powered technologies such as smart grids, predictive maintenance and real-time data analytics are already emerging in the energy sector and promise to further revolutionize it in the coming years.
However, successful digitalization requires innovation, strategic foresight and strong leadership. This makes it just as urgent as decarbonization, especially given that a timely and effective energy transition is not possible without it.
Digital frontrunners vs. digital laggards. The survey reveals a stark contrast between “digital leaders” and “digital laggards”. While 28% of respondents said their organizations are excelling in digitalisation and are more optimistic about achieving revenue, profit and decarbonisation targets, 37% reported the opposite. DNV referred to the former as “digital leaders” and the latter as “digital laggards”.
The frontrunners are well ahead in the use of digital technologies for decarbonization and the energy transition: 68 percent have quality data and 80 percent already benefit from digital technologies, compared to 21 percent and 33 percent of the laggards respectively.
For new technologies in general – such as AI (27%) and digital twins (34%) – around a third of frontrunners say they are already in use or well advanced, while this is only a single-digit percentage for laggards. In fact, most laggards say they are in the early development phase (planning or piloting) for all key technologies surveyed by DNV.
AI and data: driving the future. Almost 50% of the 1,300 senior professionals who participated in the DNV survey said they plan to integrate AI-powered applications into their operations in the coming year, with Digital Leaders leading the pack.
The top three data-driven applications for digital leaders are process optimization, system and database integration, and workflow automation. However, 50 to 60 percent of leaders also report large or massive impacts from a variety of other data-driven innovations, from predictive maintenance to supply chain management. Laggards lag behind in all areas, with the biggest deficits in key areas such as system and database integration, workflow automation, and consumer or customer empowerment.
The value of applications is often diminished by problems integrating systems and databases. Paula Doyle, Chief Digital Officer at Aker BP, describes that “companies typically have many legacy systems where data is trapped in the application” and explains that there is a need to “unlock and contextualize data from industrial systems to make it accessible to both humans and machines (for) better and faster decisions.”
AI and advanced data analytics play a central role in this transformation. The report estimates that by 2050, AI will help reduce the cost of generating clean energy by $1.3 trillion and reduce the cost of grid equipment by $188 billion. Overall, power system costs will be reduced by 6 to 13 percent. AI is now an indispensable building block of energy systems. 47 percent of respondents said their company will use AI-powered applications in its operations in the coming year – among Digital Leaders, this figure rises to 69 percent.
Paula Doyle highlights the challenge of becoming more data-driven, stressing that a specialised workforce is needed to effectively track and manage data. She notes: “Efficient automation of data delivery will become extremely important, and this is where AI can play a key role.”
Challenges and opportunities. Despite all the progress, significant challenges remain. Resistance to change is a major obstacle for both leaders and laggards, and there is also the need to balance security and agility in an industry where failure is not an option.
Digital Leaders stand out from the rest by putting digitalisation at the heart of their corporate strategy and using it to improve business performance. Almost all (90%) said digitalisation is central to their company’s strategy, compared to just 39% of Laggards.
The way forward. Lucy Craig, Director of Growth, Innovation and Digitalisation for Energy Systems at DNV, said: “As the energy sector tackles the twin challenges of digitalisation and decarbonisation, success will depend on the ability to adapt and innovate.”
“DNV’s survey identifies the key challenges companies face in leveraging digital technologies, while highlighting the opportunities that come with change. Digital Leaders are distinguished by putting digitalization at the heart of their strategy, fostering a culture of innovation and investing in the right technologies. In the next year, these companies are ready to build on their progress and maintain their lead by focusing on further digitalization and cyber resilience.”
