How Digital Technologies will Facilitate Energy Transition for a Sustainable Future

Written by Rakesh Patni, Associate Research Director, Energy Insights, IDC Asia/Pacific

The implication of the energy transition on the oil and gas industry is inevitable as the world looks at new sources of energy and technologies to deliver more sustainable generation and a reduction in carbon emissions. It is a global trend with commitments made by governments and corporations alike, with most organizations committing to reach net zero emissions by 2050.  But what will the energy transition look like and what are the foundations of this transition?

Although green, sustainable, energy production is the most desirable outcome of the transition, a pragmatic view of energy generation and consumption inevitably highlights that the world is still heavily dependent on oil and gas. It is clear oil and gas will still play an important part in the energy mix for years to come – the role of natural gas especially, which emits less CO2 than coal and oil, will be key during this transition. Regardless of the long journey ahead it is clear that several strategic investments by governments and corporations alike will deliver meaningful change.  There are 4 primary areas where this will play out:

  • Continued investment in renewable energies including solar, wind, bioenergy, and hydropower
  • Electrification of transportation (electric vehicles), the commercial and industrial (C&I) sector, agriculture, and residential buildings
  • Carbon emissions reduction and greater efficiency across the value chain:
    • Replacement/reduction of methane output and other highly polluting gases such as SF6
    • Carbon tracking and trading including the use of carbon offsets
    • Carbon capture, utilization, and storage (CCS) to capture and store carbon emissions in purpose-built facilities
  • The development of the hydrogen economy. Although currently in a nascent stage, hydrogen represents a massive opportunity for a clean energy transition, especially when adopted in areas where it is largely absent at present:
    • Industry (oil refining, methanol production, steel production, etc.).
    • Transportation (hydrogen fuel cell vehicles, shipping, and aviation).
    • Buildings (for heating and cooling purposes), and
    • Power generation (e.g., to store renewable energy and use in gas turbines)

As these investment areas evolve, there will be a corresponding need to innovate and develop the necessary digital technologies to ensure they are used efficiently and are scalable. For organizations to successfully mature these investments will require digital capabilities that can deliver optimal efficiency, resiliency, and agility. For example, in the asset-heavy oil and gas industry, predictive maintenance technology, powered by cloud platforms, IoT sensors, and artificial intelligence can ensure assets operate at maximum efficiency with minimal downtime. Robotics and drones will also play an important role by enabling remote operations and distancing the workforce from hazardous environments, while also reducing emissions caused by moving workers to and from distant job sites. Upgrading supply chain and logistics with autonomous, electric vehicles, to replace traditional fleets – supported with next-generation infrastructures like 5G networks, edge computing, and sensor technology – will also deliver significant improvements in the carbon footprint of oil and gas majors. Digital twins, by offering a digital representation of a physical site/asset, with real-time visibility and data of the environment will also drive efficiencies in industrial operations.

IDC’s FutureScape: Worldwide Oil and Gas 2022 Predictions states that by 2023, 75% of oil and gas companies will have enterprise-wide environmental, social, and governance (ESG) platforms that measure and report carbon emissions in real-time – measuring and managing carbon emissions using technology platforms will also facilitate sustainability goals. In the end, a combination of all these efforts will be required to attain the ambitious net zero targets that countries and organizations have set for themselves, and it is only with a steady and continued investment in digital technologies, capabilities, and a re-skilled workforce that will achieve a successful transition