The energy industry is blessed with a simple, unchanging mission: to generate, deliver, and store energy cheaply, reliably, and safely. Every industry faces unique disruptions arising from the COVID-19 pandemic, with magnitudes ranging from short-term interruption to permanent transformation or existential threat. The fundamental importance of energy to the fabric of society means that the long-run trajectory of the energy industry and its clarity of mission will persist. We will also, however, exist in an environment with high uncertainty and acute societal pressures on capital and people; these new stressors demand a renewed focus on getting back to the basics.
A simple mission often obscures devilishly-hard details, and the energy industry is certainly not an exception. Energy companies are large, technically sophisticated, and capital-intensive enterprises. Long planning horizons and slow growth compared to the unicorns of Silicon Valley – and the associated constraints on investment – mean that it is not always easy to focus on implementing new tools or processes that will improve operations.
A hypothetical power plant built 50 years ago would have been around for the deregulation of energy markets, the integration of intermittent renewables, the advent of distributed generation systems, an evolving regulatory environment, and everything that comes with the digital revolution. Given constant, diligent maintenance and proper re-investment over time, such a plant would still be producing electricity but against a vastly different economic and technical backdrop. Looking forward, these new technologies will continue to evolve from niche applications to core building blocks of tomorrow’s grid. How does our industry ensure cheap and reliable power over the next 50 years? Are there durable innovations that enhance the core mission of our industry?
Modern analytics and the prerequisite data architecture offer drastic improvements in maintenance efficiency, measurable benefits in operations, new capabilities for customer outreach, and are a prerequisite of competition in the future grid. These measures have permeated into many industries sensitive to reliability concerns, and we now know they work. The ROI for IT improvements is generally a couple of years. The ROI for predictive analytics is often even shorter. The short investment timespans relative to multi-decadal returns on large capital projects give the energy industry flexibility to adapt to new circumstances in a way heretofore unimagined.
Investing in technologies and systems that can wring more value out of the data that operators already possess is low-hanging fruit for reliability and quality improvement. Migrating IT infrastructure to the cloud can save on fixed infrastructure costs and lower friction when integrating with cloud-savvy software vendors. Advanced predictive analytics can identify problems requiring maintenance before traditional heuristics might, increasing reliability and avoiding costly failures. Lowered IT friction drives a competitive marketplace for value-added software services, such as sophisticated forecasting and predictive maintenance. That means better products at lower costs. End users and public utility commissions will always be excited by enhanced value and reliability. More efficient use of existing assets is good for everyone. Enabling the use of diverse new technologies on an increasingly sophisticated network can drive our core mission today while enabling innovation to flourish in the future.
Chris Miller and Duncan Kushnir
Chris Miller is a data scientist who digs deep into interesting problems across many different disciplines including finance, medicine, the Earth sciences, and urban planning. At GridCure, Chris writes and tunes the models that power the platform. Duncan is at heart a system thinker that loves to tackle complex problems in diverse technical fields, which so far include energy and environmental systems, physics, batteries, resources, and heavy industry. At GridCure, Duncan writes models and connects wires.