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How IoT is Transforming the Energy Industry

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The energy sector is undergoing a massive transformation. Along with solar, wind, storage and other technologies, the internet of things is helping to drive this transformation. It's revolutionizing nearly every part of the industry from generation to transmission to distribution and changing how energy companies and customers interact. Here's how the IoT is transforming the energy industry.
How IoT is Transforming the Energy Industry
Image by Gerd Altmann from Pixabay
  • Remote Asset Monitoring and Management

Affixing IoT sensors to generation, transmission and distribution equipment can enable energy companies to monitor it remotely. These sensors measure parameters such as vibration, temperature and wear to optimize maintenance schedules. This preventative maintenance approach can significantly improve reliability by keeping equipment in optimal equipment and providing the opportunity to make repairs before it fails.

Digital twin technology, which involves creating an advanced digital model of an existing piece of equipment, could help with this as well. IoT sensors attached to the physical unit collect data about its performance, which they feed to the digital twin. In addition to supporting preventative maintenance programs, this technology enables virtual troubleshooting and support from remote locations.

IoT sensors can also help to improve safety. Affixing internet-connected sensors to pipelines can help detect leaks that, if left unaddressed, may result in fires or explosions. Leaks also amount to wasted resources and contribute to global warming.

  • A More Distributed Grid

The energy grid is becoming more distributed thanks to the rise of residential solar and other technologies. Residential solar capacity has grown rapidly in recent years and could grow by more than three times to 41 gigawatts by 2025, according to an analysis from Credit Suisse. Homeowners and businesses can now generate their own electricity by placing solar panels on their rooftops or even building small wind turbines on their properties. This increasingly distributed power system represents a major change for energy companies. In addition to managing a few large generators, they must also now manage a growing number of small generation resources located across the grid.

This presents a challenge to grid operators, but smart grid technology powered by the IoT is helping to enable this distributed energy transformation. A smart grid uses IoT technology to detect changes in electricity supply and demand. It can react to these changes autonomously or provide operators with the information they need to more precisely manage demand.

  • More Informed Customers

In addition to providing more information to utilities, IoT technology can help customers to be more informed about their energy usage. Internet-connected smart meters collect usage data and send it to both utilities and customers remotely. Thanks to smart meter technology, many energy companies now send their customers detailed reports about their energy usage.

Customers can also install smart devices in their homes or commercial buildings that measure the power consumed by each appliance and device. They can use this information to identify waste and especially power-hungry appliances to save on their energy bills. Other IoT devices, such as thermostats, can automatically optimize their operation to reduce energy use. Residential customers could potentially benefit the most from these technologies, as the U.S. residential sector represents 37 percent of energy usage. The commercial and industrial sectors, which use 35 and 27 percent respectively, could benefit substantially as well.

  • Improved Grid Management

IoT technology can enable the integration of more distributed resources into the grid, but it can also improve grid management in other ways as well. Placing sensors at substations and along distribution lines provides real-time power consumption data that energy companies can use to make decisions about voltage control, load switching, network configuration and more. Some of these decisions can be automated.

Sensors located on the grid can alert operators to outages, allowing them to turn off power to damaged lines to prevent electrocution, wildfires and other hazards. Smart switches can isolate problem areas automatically and reroute power to get the lights back on sooner.

Power usage data can also serve as the basis for load forecasting. It can help in managing congestion along transmission and distribution lines and help ensure that all of the connected generation plants meet requirements related to frequency and voltage control. This power consumption data can also help companies decide where to build new infrastructure and make infrastructure upgrades.

The IoT is transforming nearly every sector of our economy, including the one that powers — the energy sector. Over the coming years, the energy industry is going to get smarter, more efficient, more distributed and more reliable, thanks in part to the IoT.

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