The Energy, Utilities and Resources (EU&R) sector continues to prioritize digital transformation to drive meaningful operational efficiencies while meeting the growing rise in energy demand and tackling climate change. In 2024, we will see how the industry accelerates their digitalization with integrated systems and leveraging disruptive technologies such as AI and automation.
Carol Johnston, VP of Energy Utilities and Resources, offers valuable market insights into the industry, outlining the three predictions that will have a profound impact on the EU&R landscape in 2024.
PREDICTION #1: In 2024, demand for integrated systems with embedded AI and automation will increase by 50%
| Digital transformation continues to be a central point of focus for the industry. In a recent PWC report, “digital transformation” ranked second only to hiring and retaining talent as a top growth driver for the industry.
This makes good sense, especially with the rapid adoption of AI, IoT, and other intelligent technologies. |
59% EU&R companies increasing investment in digital transformation initiatives |
As we move into 2024, the Energy, Utilities & Resources sector will continue its evolution towards a composable, integrated environment, one that is capable of supporting the innovation and rapid change underway within the industry.
While many organizations already rely on system data to help inform business insights, intelligent, integrated systems will drive new use cases in 2024.
No longer limited to supporting “go/no-go” decision-making, intelligent systems will generate plans and recommendations to address disruptive events (outages, sick leave, supply chain issues, etc.) before productivity is impacted. The approach is comprehensive, identifying possible constraints (limited parts inventory, resourcing, etc.) and other considerations within the proposed response.
For example, an intelligent system uses data from an asset performance management (APM) solution to flag that an asset is likely to fail within the next three months. Along with an alert of the impending failure, the system also utilizes data from other modules (scheduling, ERP, etc.) to make resource and scheduling recommendations that optimize uptime and lower overall costs.
Another example is where the parts inventory is insufficient, or the necessary components are located at a different facility. The system factors this into the schedule, along with supply chain constraints, so there is adequate time to ensure all of the required parts and people are available for the planned work.
IFS customers leverage a data-rich environment with insights to assets, skilled workforces, parts inventories, and additional considerations—such as carbon footprint reduction and other enterprise KPIs that impact decision-making.
These integrated systems have access to full operational intelligence to ensure the business maintains and optimizes productivity while delivering on its commitments across the enterprise.
PREDICTION #2: Water management will become a business imperative in 2024, with sensor and smart meter deployments increasing by 100%
| Clean, potable water isn’t a privilege. It’s a life necessity. With only 0.5% of water on the planet useable and climate change dangerously affecting the supply, managing this resource is one of the industry’s most important responsibilities.
Yet, according to the Federal Energy Management Program, the US loses 2 trillion gallons of treated drinking water yearly, often caused by undetected leaks due to water mains that were not adequately maintained. |
2 trillionGallons of treated drinking water lost each year in the US |
Without immediate and effective management, our water supply will continue to shrink. A good example is Rio Verde Foothills, a master-planned “desert living” community just south of Scottsdale, AZ. After wells ran dry and no new wells were located, over 500 properties in Rio Verde had to rely on water hauled in from Scottsdale. But in January 2023, Scottsdale stopped supplying water due to new drought provisions. The controversial move left hundreds without access to water. An interim measure was implemented in October 2023 as a temporary fix while the future of Rio Verde Foothills hangs in the balance.
In 2024, the industry will be under increasing pressure to manage the water supply proactively, with smart meter deployment increasing substantially to improve leak detection. This will result in an increase in revenues utilities can invest in new infrastructure and technology.
IFS utility customers are implementing a range of strategies to combat water scarcity:
- Reduce water usage and waste
- Develop water filtration systems
- Protect wetlands
- Improve irrigation efficiency
- Increase water storage in reservoirs
- Desalinate seawater
Utilities must also teach communities and businesses to become better stewards, sharing best practices to conserve water, including oversight to curtail excessive use and ensure demand doesn’t exceed supply.
PREDICTION #3: In 2024, carbon capture and storage (CCS) practices will increase by 30%
| Most people know that the planet’s future is at risk due to global warming and climate change, primarily driven by greenhouse gas emissions.
According to the Paris Agreement, global warming must not exceed 1.5°C above pre-industrial levels. However, the planet is already 1.1°C warmer and emissions continue to rise. To keep global warming to 1.5°C, emissions must reduce by 45% by 2030, reaching net zero by 2050. |
45%↓Required reduction in carbon emissions by 2030 to combat global warming |
Unfortunately, experts are already predicting our current efforts will not be enough. A recent International Energy Agency (IEA) report advises that the path to net zero is narrowing, requiring greater ambition and implementation, with stronger international cooperation to turn things around.
In 2024, we will see new practices implemented in an effort to get us back on track—specifically, on carbon capture and storage (CCS). According to the Environmental and Energy Study Institute, increasing the storage and recycling of CO2 are critical imperatives to stabilize the climate for continued human development.
CSS involves the capture of carbon dioxide (CO2) emissions from industrial processes, such as steel and cement production, or from burning fossil fuels in power generation. The carbon is transported from the point of production (via ship or pipeline) and stored deep underground in geological formations to prevent it from returning to the ground surface or seabed.
Within the industry, some power plants have already implemented CCS strategies. For example, an ethanol plant in the US is recycling CO2 to produce algae, processing it into livestock feed, biofuels, and food and nutritional supplements. The program has succeeded, and the utility plans to install the technology at all nine ethanol refineries.
The success of these progressive CCS programs relies on a unified cloud platform, capable project management, and technology that precisely tracks ESG objectives in real time to meet carbon reduction goals.
IFS customer Hafslund Oslo Celsio, Norway’s largest district heating and cooling provider, selected IFS Cloud™ to help it reach its climate goals. The technology will drive efficiencies across its green energy production processes, develop carbon capture and storage capabilities, and reduce waste.
“With a new company structure in place, together with a need to accelerate the delivery of new carbon capture and storage initiatives, we needed a solution that could drive our push for digitalization and generate operational efficiencies. The flexibility and versatility that IFS Cloud offered us in supporting ERP, EAM, and FSM on a single platform, as well as accelerating the delivery of digital capabilities, made it ideally suited to our needs.” – Jonny Lotten, Head of IT and Digitalization, Hafslund Oslo Celsio
Navigating what lies ahead:
The Energy, Utilities and Resources sectors have an interesting journey ahead of them. With critical developments at play, like global warming and the effects of a shrinking water supply they must actively incorporate AI and automation into their organizations.
By leveraging these technologies, organizations in the EU&R sector will be well-equipped to strategically utilize operational intelligence across all areas of their operations. This will enable them to not only maintain optimal levels of productivity but also demonstrate a strong commitment to excellence and success across the enterprise. While at the same time driving forward sustainable practices.
