IoT in energy02 July 2018

Utility and energy companies are keen to advance towards Internet of Things solutions, research shows. However, there are also some key challenges that need to be faced, as Adam Offord reports

The global population will near 10 billion people by 2050, according to research by the UN. This means that we will need new production methods to feed everyone, mass urbanisation will challenge how we connect our cities and transportation, and demand for energy will increase, putting strain on the need to improve sustainability and energy efficiency.

The Internet of Things (IoT) – the network of physical devices and items embedded with electronics, software, sensors, actuators and connectivity – can play a major role in all of the above.

British satellite telecommunications company Inmarsat commissioned Vanson Bourne, a specialist technology market research company, to interview 500 respondents in the energy, agritech, mining and transportation sectors about their use of, attitude to, and predictions for IoT within their organisations.

In total, 82% of respondents in all sectors said that they will have adopted some form of IoT within the next two years, but as well as significant benefits, there are also significant challenges that need to be overcome as a more connected world brings a host of issues.

Looking to digital transformation
According to Inmarsat’s report ‘Future of IoT in Enterprise’ (, IoT adoption is fast advancing among energy companies which are looking to further reduce costs and improve productivity and safety.

Vanson Bourne interviewed 100 energy companies from across the world and found that 47% cite identifying cost-saving opportunities as one of their top priorities for the deployment of IoT, ahead of other drivers such as improving health and safety (37%) and increasing automation (37%).

In addition, energy businesses reported that the top benefit they expect to see from the deployment of IoT is greater workforce productivity (48%), further underlining the role that IoT will play in improving the profitability of operations within the energy sector.

“This adoption of IoT technology can largely be attributed to the benefits of remote monitoring of equipment and production sites,” the report says. “By combining different components in energy systems with sophisticated sensors, companies can collect important data remotely and therefore gain essential insights into the overall health of their operations and areas that can be optimised.”

The continuous monitoring of oil rigs, solar panels, and wind turbines is one example. By using IoT solutions, companies can ensure that systems are working at the maximum possible efficiency and gain real-time insights to ensure that equipment is reacting appropriately to environmental conditions. “Given their typically remote operations, the ability to do this from a central control point and without manual intervention promises to be a benefit for the industry,” the report adds.

Gary Bray, director of energy at Inmarsat Enterprise, says: “Rather than energy businesses extracting as much fuel as possible, we are increasingly seeing a focus on profitable volume, which can be extracted and distributed at the lowest possible cost to boost margins and improve profitability. It is no surprise therefore that oil and gas producers are looking to the technologies of digital transformation to help them reduce these extraction, distribution and operational costs.

“Rapid digitalisation of the sector will create an ‘Internet of Energy’ network that incorporates interconnected, intelligent measuring and monitoring systems with real-time visualisations of consumer usage data. This can be integrated into automation systems that instantly adapt to fluctuations in availability or demand and enable predictive maintenance of assets that will extend their lifespan, maximise resources and minimise wastage. With the oil price likely to stabilise at $62 per barrel through to the end of 2019 – a long way from its 2012 peak of $112 – energy businesses that embrace IoT and automation stand to gain a significant competitive advantage, operating with greater efficiency, lower costs and higher profitability.”

A connectivity challenge
With change comes challenges, and energy companies are aware of the key challenges that IoT can bring. A major concern, as highlighted in the report, is connectivity, which it says could leave some unable to capitalise on this technology’s transformational capabilities.
Over half of energy companies surveyed stated that connectivity is a challenge that they face and 24% believe that connectivity issues could derail their IoT deployments. The report says that for IoT deployments to succeed, connectivity must be constant enough to collect and transmit data between multiple devices. If it isn’t, companies will be unable to suitably monitor their assets.

“Effective connectivity is also necessary to ensure the safety of personnel in more remote locations or where safety or environmental hazards might be an issue, by ensuring availability during difficult times or emergencies,” the report says. “This is where satellite connectivity comes into its own, providing not only connectivity for remote locations but also a highly reliable and resilient service on a global scale.”

Bray concludes: “It is clear that IoT holds the key to unlocking huge cost savings for the energy sector. However, for energy companies to access the full benefits of IoT they must have reliable, robust communication networks that can gather data from remote, hostile environments and transmit it back to control centres for analysis.

“Locations such as offshore platforms, as well as more remote land-based rigs and infrastructure, may be outside the range of terrestrial networks, so energy businesses must look to satellite connectivity to gather the vital data that will optimise their operations and reduce their costs across the full chain of upstream activities.”

Box out: Security must be at the top of the agenda

Security must be at the top of the agenda for those looking to take advantage of IoT, according to the ‘Future of IoT in Enterprise’ report.
It warns that cyber threats are persistent, well organised and constantly evolving, with the energy sector a prime target as it “underpins every country’s society and economy”.

As more data flows outside of an organisation’s immediate defensive layer, this presents hackers with a larger surface area
to potentially compromise, it adds.

As any breach could have disastrous consequences, it is worrying to see that even 2% of energy companies surveyed say
that data security and IoT “creates no new challenges” and “existing approaches to data security are adequate to meet IoT security requirements”.

“While many energy companies are well aware of the security challenges that accompany IoT deployments, success will be largely dependent on board-level support and understanding,” the report explains. “Without a solid appreciation of IoT and its security necessities at a leadership level, it’s almost impossible to enforce the appropriate security measures across the business – and this is something that is currently lacking in too many organisations.

“As is the case with any technology, nothing is ever static, and energy companies will therefore need to continuously learn and evolve through a recurrent cycle of improvement to ensure security risks are constantly reduced. Organisations must remain alert and diligent; this might involve monitoring networks more closely and ensuring the right questions are asked to ensure secure IoT.”

Adam Offord

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