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The power of electrification

Digital technology is positioning energy industry leaders for a future of decarbonized supply chains, energy resilience, and improved supply management.

Energy producers and providers—especially utilities—are at the front of the green energy movement. Renewable energy and the facilitation of rapid, cost-effective electrification across industries are critical imperatives.

Some utilities have stepped into a leading role in the energy transition, pursuing clean electrification and decarbonization while replacing fossil fuels with electricity from renewable sources such as solar, wind, and hydro. Others are challenged to address aging infrastructure and face difficulties adjusting to rapidly changing technology. Still others must balance growth and decarbonization—often requiring calculated trade-offs in the energy mix. Lastly, some in the industry appear reluctant to push the boundaries beyond what government regulations require.

But it is clear: aggressive action to decarbonize is needed. Granted, a huge impetus for utility industry decarbonization does, indeed, stem from government-imposed regulations. However, our recent survey of utility executives reveals a surprising finding: technology has overtaken regulation as a stronger driver of industry progress toward a low-carbon energy future.

Technology has overtaken regulation as a stronger driver of industry progress toward a green energy future.

To understand how electric utilities are currently responding to its many challenges, the IBM Institute for Business Value partnered with Oxford Economics to survey 800 executives across all utility segments (generation, transmission, distribution, and retail) in 34 countries. 

This study focuses on a group of transmission and distribution (T&D) organizations that we call Green Energy Movers (GEMs). They are more reliable, resilient, and decarbonized, leaving them better positioned for a greener future. Their technology roadmaps set them apart and provide a model around 3 key initiatives for others to follow: 

 

  • Decarbonizing the energy supply chain
  • Prioritizing stability, security, and resilience
  • Managing increasing demand and intermittent supply

Green Energy Movers are distinguished by their technology roadmaps, which are enabling their energy transition strategies.

Building a digital technology layer

GEMs seem to understand that establishing a digital foundation—or base layer of digital capabilities—creates a path toward accessing emerging technologies, which utilities are already putting to good use. Blockchain can help process green energy credits. AI can help direct ground cover removal. Customers can receive automated notifications of restoration efforts. Meanwhile, a security-rich digital infrastructure is essential to monitoring and managing the safety of the grid, its employees, and customers.

Expanding on these opportunities requires flexible capabilities that readily integrate with new solutions and assets. This means bridging the gap between the operational applications that create data with a digital technology layer that allows that data to be viewed and analyzed across systems. This base layer of digital capabilities supports AI, IoT, blockchain, automation, and other exponential technologies in a flexible hybrid cloud environment, positioning utilities to pursue their decarbonization, resilience, and reliability goals.

A strong foundation of digital technology can provide essential drivers toward decarbonization.

A strong foundation of digital technology can provide essential drivers toward decarbonization.

Download the report to learn more about the initiatives adopted by GEMs and the value these tactics can bring to other utilities as part of their energy transition strategies.


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Meet the authors

Bryan Sacks

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, CTO, Energy, Environment, and Utilities (EE&U) industry, IBM


Casey Werth

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, Global Cloud Solution Leader, Energy, Environment, and Utilities (EE&U) industry, IBM


Cristene Gonzalez-Wertz, Global Electronics, Environment, Energy, and Utilities Research Leader, IBM Institute for Business Value

Lisa-Giane Fisher

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, Leader, Middle East and Africa, and Global Benchmark Research leader, Utilities industry, IBM Institute for Business Value

Originally published 22 March 2022