Rakesh Kalsi
Transitioning to a net-zero world is one of humanity’s greatest challenges, requiring a fundamental shift in our energy production, consumption, and transportation systems. The energy sector is a significant contributor to greenhouse gas emissions, and renewable energy sources, such as wind and solar power, offer a sustainable alternative to fossil fuels. By replacing polluting coal, gas, and oil-fired power plants with renewable energy infrastructure, we can significantly reduce carbon emissions and move closer to achieving our net-zero targets. The increasing share of renewable energy in the primary energy mix is a positive trend that aligns with the goal of reducing our reliance on fossil fuels.
However, realizing this transition requires substantial investments. It is estimated that around USD 26 trillion of investments will be needed in renewable technologies by 2050 to achieve the desired goals. These investments will support the development, installation, and maintenance of renewable energy assets worldwide. Effective asset management is crucial in this context. As the number of renewable energy assets continues to grow, optimizing their performance, ensuring long-term profitability, and aligning with sustainability objectives becomes essential. Technology will play a critical role in revolutionizing asset management practices in the renewable energy sector.
Data Analytics and Predictive Maintenance
Technology in asset management enables us to collect, analyze, and leverage vast amounts of data. Through sophisticated data analytics tools, renewable energy asset managers can gain valuable insights into the performance and health of their assets. Data analytics can reduce operational costs by 10-12% in renewable energy projects. Predictive maintenance algorithms further enhance efficiency by proactively identifying potential equipment failures, reducing downtime by up to 10-15%, and lowering maintenance costs.
Remote Monitoring and Control
Remote monitoring and control systems have become critical tools in renewable energy asset management, especially given the fact that most of these energy assets are in remote locations. Employing IoT (Internet of Things) sensors and cloud-based platforms enables asset managers to remotely monitor and optimize performance parameters. Real-time alerts and notifications enable swift responses to any anomalies or issues, ensuring prompt troubleshooting and minimizing losses. The global market for remote monitoring solutions in renewable energy assets is projected to reach $3.2 billion by 2026 from $1.3 billion in 2020.
Artificial Intelligence for Decision Support:
The use of AI and machine learning algorithms have enabled advanced decision-support capabilities. By leveraging AI-powered insights, asset managers can make data-informed decisions, fine-tune asset operations, and maximize energy generation while reducing costs. Additionally, AI algorithms can facilitate intelligent energy forecasting, and weather forecasting, enabling better planning and grid integration. AI-driven asset management solutions could potentially increase energy production by up to 10-12% and reduce operations and maintenance costs by 5-10%.
Blockchain for Transparency and Trust
Blockchain technology can ensure transparency and trust in transactions offering immense potential for enhancing transparency and trust in the renewable energy sector. With distributed ledger technology, stakeholders can securely record and verify transactions, ensuring accurate tracking of renewable energy generation, consumption, and trading. Blockchain-based platforms enable greater transparency in renewable energy certificate (REC) trading, guaranteeing the integrity of green energy attributes. This transparent and decentralized approach fosters trust among stakeholders and encourages investments in renewable energy assets.
Augmented Reality (AR) for Enhanced Asset Inspection
With Augmented Reality (AR), asset inspection can be simplified. Technicians can overlay digital information onto physical assets, facilitating real-time visualizations, maintenance instructions, and remote expert support. This reduces human error and improves efficiency by minimizing the need for physical presence and manual documentation. The global market for AR in energy was valued at $670 million in 2020 and is projected to reach $2.63 billion by 2026.
Cybersecurity for Asset Protection
According to a study by Accenture, the average annual cost of cyberattacks on energy companies is estimated to be $12.8 million. Asset managers must safeguard critical systems and data from potential cyber threats. Implementing robust cybersecurity protocols, including secure communication networks, encryption, and continuous monitoring, helps protect assets from unauthorized access, data breaches, and operational disruptions. This can instill confidence among investors and stakeholders, safeguarding the long-term viability of renewable energy assets.
Overall, the potential for the use of technology in the management of renewable assets is huge and is at a pivotal point. The emergence of fully integrated platforms and advanced software solutions is revolutionizing asset management practices. An integrated tech-enabled asset management system can help save at least ~3-5% of revenue loss. Technology-driven asset management practices will be instrumental in optimizing the performance and profitability of renewable energy assets, contributing to the overall success of the net-zero transition.
The author is Managing Director, Infrastructure Practice at TruBoard Partners, and the views expressed in this article are his own
