Quality data will ensure green transition in the energy sector
The energy infrastructure of the future puts high demands on the underlying IT architecture in the energy companies. The IT architecture must enable unhampered data exchange across older technologies, cloud services, meters, sensors, OT/IT systems etc. The goal is a Smart Grid that transforms raw data into valuable knowledge on how we can reduce our resource consumption as a society.
By: Jens Cornelius, Senior Business Director in KMD
The Danish energy sector is in the middle of a transformation process. Sustainable energy sources such as wind and solar must account for a far greater share of the Danish energy production in the future.
In 2020, the Danish Government and a broad parliamentary majority agreed on an ambitious climate accord that will ensure a green energy sector and important steps towards a greener industry. The agreement contains several concrete initiatives. Among them the construction of the world’s first energy islands totalling 5 GW – one in the North Sea and one in the Baltic Sea. The agreement also details investments in carbon capture and green fuels.
The focus on sustainable energy sources means that the electricity infrastructure must be adjusted to handle the fluctuations in energy production caused by the changing wind and weather conditions. The development in the electricity system will be carried out with the aid of an intelligent infrastructure that can create a reliable and efficient balance between production and consumption of electricity. A Smart Grid.
Data is a cornerstone in the green transition
The future electricity system in Denmark will be based on an intelligent utilisation of data. Meaning that the shift from a primarily fossil-based energy production to a 100 percent green energy production – the target is coal, oil and gas independence in 2050 – will be helped by automated processes and new technology. The raw material in both automated processes and new technology is intelligent energy data.
The vision is an international network of public and private players that exchange data in a secure, lawful infrastructure, allowing Denmark to always have the energy needed, produced green and sustainably using for instance wind, solar, biomass and geothermic technology.
The data-driven energy company
In KMD we work with a notion of becoming a data-driven company. Within the energy sector, being data-driven means that you – from a technology standpoint – use the insights of the past to determine the investments and actions of the future. Most energy companies have, for instance, huge amounts of historic data on energy consumption in Denmark. But these data are not activated due to, among other things, technological silos, outdated platforms and the lack of system interfaces. The data just sits there – unorganized and entirely too immense to derive meaning from.
The data-driven energy company allows itself to – via data integrations – draw meaning from the historic data, to build the intelligence needed to carry out an efficient green transition of the sector in a focused and prioritized order.
Avoid the Tetris structure
I usually describe the system architecture of the past in energy companies using the popular computer game Tetris. In Tetris the object is to place the falling pieces correctly. If you are skilled and quick on your fingers the pieces will fall into place layer by layer in the architecture. But if you fail at long-term thinking then more and more unintended gaps will form – gaps that you are stuck with until the logic of the game at the end catches up with you, and the game is over.
The analogy fits the system architecture of energy companies. Just like in Tetris, energy companies that have been around for many years risk that their technical debt comes back to haunt them if they fail to build their system landscape in a way that allows for new pieces to fall into place and take part of a greater architectural whole.
One of my colleagues describes the energy sectors lack of data exchange across the application portfolio as “Accidental IT”. Over time the system landscape in many energy companies has grown wildly in a structure that today complicates the transversal exchange of energy data, which is a prerequisite to push the green transition. Overlapping functionality, data duplication and even dependency on End-of-Life technologies are well-known challenges in these companies.
Distributed energy systems with high complexity require an IT architecture that can handle the high complexity.
Scarcity of expertise is a factor
One of the areas where energy companies are really challenged is in their access to the right IT professionals. The digitisation wave rolls in every part of the society and not just the energy sector. Most companies with a digital agenda are searching high and low for employees to help them define the right target architecture and carry out the IT investments of the future in a business-led tempo and sequence.
It takes deep domain knowledge to recognise how the energy sector is put together and how it will evolve over the years to come. The deep domain knowledge must be combined with technical expertise to create the right data integrations and strike a balance between on-prem and cloud. Because that is a fine balance.
On the one hand there is a need for protecting the historic investments in the on-prem-based system portfolio that comprise the foundation of the core business. It may be true that the technologies and systems are out of date, but they still contain a lot of valuable information on both users and energy consumption of the past.
On the other hand, the company also needs to reach for the new opportunities in cloud technology, as this is one of the keys to modernising the system portfolio and innovate the company’s core outputs. The intelligent customer journeys of the future will, for instance, not be created in old silo systems. They will be built in the cloud using many exciting tools that can strengthen the customer loyalty and ensure the company’s reason to exist in the market.
Data collection from every corner of the business
The energy sector will have access to more and more information in the future. Energy companies can therefore not use the data integration principles of the past – for instance Batch Data Integration or file-based integration – to build the data structure of tomorrow. Rather they must work with real-time integrations and API-based integrations. This requires first of all that the companies work with a roadmap for the desired integrations so as to not get lost in feature requests from the business side, but rather stick to a future-proof plan. Secondly, it requires access to the right IT toolbox and the right IT craftsmen to realise the plan.
In data integration projects, KMD always emphasises the importance of being able to bring all energy data into play. There cannot be parts of the business where data sources or meters are unable to deliver data to the platform that collects and aggregates data across. The company’s sweeping digitalisation journey must be just that – sweeping. The value lies as an energy company in the fact that you can contribute to the green transition much more precisely when every corner of the business is made transparent through the access to data.
Launch pad for new business models
Creating the right data collection and data analysis capabilities in the system architecture can also work as a platform for utilising new kinds of energy data from, for instance, IoT devices. This means that energy companies can also use the digitisation of the business to build entirely new business models. To stay in the lingo of today, you could call these new initiatives Data Provisioning-as-a-Service or Data Sharing-as-a-Service. The opportunities to establish new lines of business are many when you use the coupling between a company’s local insight and a nationally covering Smart Grid to devise and develop new services.
When taking into account that 20% of energy consumers in Denmark (typically companies with production facilities) account for 80% of the entire energy consumption there is a considerable market for information that can help this Top 20 list of companies reduce their energy consumption in an intelligent way. A sort of Insight-as-a-Service that can point to the most obvious areas of optimisation through data analysis allowing the company to reduce its energy consumption, save money and help the carbon accounting.
Data enrichment with OT/IT
Lastly, the digitalisation and data agenda within the energy sector is naturally linked to the OT/IT relationship.
If the energy companies are to harvest the benefits of the sweeping digitalisation completely – even in the outermost parts of the company – it will also include the online access of machines, equipment, processes and products. The technologies that bridge OT and IT already exist. And in KMD we have even built the necessary governance structure that makes the data transmission across OT and IT a secure and compliant discipline.
The enrichment of, for instance, the SCADA systems with data from smart meter devices and vice versa is, in addition with the coupling of pumping stations, IoT devices, DataHub etc., all part of the future’s Smart Grid. The new possibilities to calculate and predict the energy balance in the grid have derived effects that will spread far into society and points in a green, sustainable direction.
Have a nice journey.
KMD, one of the largest Danish IT companies, develops and delivers software and service solutions for local government, central government and the private sector in Denmark as well as chosen segments in Scandinavia. The KMD Group has subsidiaries in Denmark, Norway, Sweden, Finland and Poland. KMD has more than 1,500 Danish and international customers from the public and private sector, including around 800 Danish and international companies. The KMD Group has an annual revenue of around DKK 4.8 billion and more than 3,000 employees. KMD is a subsidiary of NEC Corporation, a global leader in the integration of IT and network technologies. Read more at www.kmd.dk.