Post - Blog
Redefining IT to address sustainability in the energy sector
- 2 years ago (2021-12-13)
- Junior Isles
Simon Reynolds , Energy & Utilities Lead, Coeus Consulting
World Energy Congress
The Energy industry is undergoing significant transformation, whether due to the shift to decarbonisation, new approaches to energy retail, or changes in energy consumption points.
At least 73 countries globally have a target to become net zero societies by 2050, with some nations even aiming for 2045.
This means that the green revolution is happening now, and energy companies must continue to innovate, transform, and adapt to meet such demanding goals. For all organisations, it is about taking personal responsibility, gaining awareness, and digging deep to uncover potential improvements across various departments down to the finest of details.
Take IT for instance. According to the Global e-Sustainability Initiative (GeSi) Smarter 2030 report, IT can help keep global carbon-dioxide equivalent (CO2e) emissions well down, decoupling from a previous pattern where each one percent of growth in gross domestic product resulted in a half-percent rise in CO2e emissions.
If managed properly, IT can be a key business enabler, helping organisations of all shapes and sizes to reduce emissions, meet their sustainability goals and demonstrate how they are innovating for a low-carbon future while providing choice and value to customers.
Here are five ways in which redefining IT can help to meet the modern sustainability challenges facing energy firms.
1. Implementing the right technology solutions
For distribution network operators (DNOs) facing several interlinked challenges in the move towards net zero, selecting the right tech can help reduce and, over time, eliminate fossil fuels, increase low-carbon generation, and deliver against a range of responsibilities and accountabilities.
Deploying appropriate IT infrastructure and applications can help by enabling energy and utility firms to benefit from better data and analysis of that data. Indeed, data-driven insights are key to improving efficiencies, enhancing an organisation's ability to manage dynamic, even sprawling systems and networks.
When business decisions can be made from a sound and solid foundation, energy companies and other utilities are in the best possible position to reduce energy consumption and wastage – thereby cutting emissions and boosting their sustainability credentials.
2. Beyond keeping systems running - achieving real efficiencies
In many cases, savings that further empower operations by maximising energy efficiency can also be achieved.
Fundamentally, IT looks entirely different today than it did 15 years ago. Data volumes have risen tremendously, requiring more storage, while the technologies and applications involved have also become more complex, requiring greater resource allocation.
These rising demands have seen an associated rise in energy usage – in 2018, data centres alone accounted for 1% of all the energy consumed on earth .
Here, IT can work to modernise, streamline, and enhance its use of energy by conducting process audits and reviewing structures to ensure that IT is operating as efficiently and effectively as possible, boosting efficiencies and cutting consumption.
3. Stepping forward to sustainability – without sliding back on costs
Some may be tempted to argue that deploying and implementing greater levels of digitisation costs more, potentially countering any sustainability gains. However, the right suppliers will ensure the benefits outweigh the costs.
The IT department stands ready to help deploy flexible systems and operating models while preserving agility and reducing complexity for users.
IT-focused consultancies can assist with roadmaps and business cases – including for the replacement of energy management and distribution systems with more sustainable, cost-effective, and energy-efficient alternatives. Studies of an existing system can confirm the best ways to go about these opportunities.
By predicting functionalities and business outcomes, valid conclusions can be derived from a full inspection and analysis of the technology stack and support model, resulting in a clear pathway for systems replacement.
4. Bringing advantages back home
IT can also enable firms to better reach domestic consumers at home (this market is responsible for some 25% or so of energy consumption) with energy-efficiency initiatives that work, all while preserving business validity.
Building DevOps capabilities and transforming supplier management will streamline the processes needed to enable larger customer volumes, further freeing up resources while improving utilisation and efficiency, making a large, diverse customer base easier to manage.
For one energy retail customer of ours, a project which examined their IT requirements delivered savings of more than €50 million and the pruning of sub-optimal supplier siloes. Further, with the introduction of a software as a service (SaaS) vendor management function, additional savings of circa €40 million were also achieved.
Much of the focus that energy firms have will be channelled towards energy transition and improving their product/service offering so that it is increasingly environmentally friendly. However, they must now also consider the impact of their operations internally.
5. Sourcing
IT departments can become a role model of sustainable sourcing, as well as both minimising waste creation and negative environmental impacts across the whole value chain.
This can include everything from extending the length of life of key assets and adopting more sustainable and conscious purchasing patterns within the IT department, to vetting external IT partners, such as cloud providers, in their own sustainability practices.
The key is ensuring the right questions are asked during IT considerations to ensure the programmes, processes and activities put sustainability at the forefront of the agenda.
According to a 2021 survey conducted by IT research agency Vanson Bourne, 77% of respondents rate environmental and sustainability considerations as ‘extremely important’ when selecting a supplier for IT equipment or services.
Ensuring that the correct questions are asked and scored when engaging suppliers in sourcing activities is therefore critical.