Energy Sector Raises ICT Budgets Globally

The positive contribution of ICT to energy efficiency is being recognized by the energy sector.
Published: Thu 13 Feb 2014

Information and communications technology spending in the energy sector has increased, reports research firm Kable. The firm carried out a global survey of 128 energy companies which revealed that 45% of energy companies raised their ICT budgets by 8% in 2013. This was in comparison to 2012 statistics.

In order to increase operational efficiencies, energy companies have also invested 50% of their external ICT budgets in hardware and software in 2013. Analysis of the core technology investment priorities of energy companies shows that spending on enterprise applications is central to their ICT strategies.

With IT emerging as an essential tool for improving productivity, CEOs and CFOs have also been taking a more active role in ICT decision-making. Kable believes that favourable relationships at board level are necessary to develop suitable IT strategies for energy companies. This is important given the increasing reliance of these companies on technology.

A different world with greater expectations

Today, the utility has broad ICT needs as a result of the many changes taking place in the power industry. This includes migrating to modern IT platforms, piloting smart metering/advanced metering infrastructure, and reworking the supply chain to regulatory compliance. Customers are also expecting more from their utilities.

With the emergence of big data, social, mobile, cloud and analytics are fundamentally changing the way in which we live, work and interact. These digital forces are resetting customers’ expectations and forcing utilities to rethink end-to-end customer experiences. We covered this recently in our article Utilities Should Invest In Their Customers.

ICT roles

ICT plays a daily part in the production and use of electricity, from the operation of power plants to electricity transport. It is used to improve energy efficiency and reduce costs. More interestingly, ICT is used to model, simulate and optimize these processes.

While there are a wide range of ICT projects globally, here are a list of practical examples of energy efficiency initiatives involving ICT from local and regional authorities across Europe:

  • Energy savings through an ICT-enabled building automation and energy monitoring system at Aalst General Hospital in Belgium

  • Awareness raising through smart meters in Amaroussion Greece

  • Virtualising data centres in Copenhagan, Denmark

  • The Ecoffi ces building energy challenge in Cote d’Azur, France

  • Energy savings from intelligent metering and behavioural change in Leicester UK

  • ICT-supported centralised energy management system for municipal buildings in Maribor, Slovenia

  • Improving energy efficiency in public buildings in Tipperary Ireland

  • Demand side management for energy efficiency in buildings — SAMS in Växjö, Sweden

ICT plays a major role in delivering energy efficiency-this was recognised by the European Commission in its recommendation of 9 October 2009 ‘on mobilising information and communication technologies to facilitate the transition to an energy-efficient, low-carbon economy’. ICT has great potential to assist in the delivery of a wide range of energy efficiency and sustainability initiatives in a myriad of ways.

Efficiency of ICT in question

However, while ICT aims to support energy efficiency, it is also important to note that the sector also consumes a lot of electricity. It is estimated that the 1.5 billion computers in the world consume about 90 000 MW of electric power, which is about 10% of global consumption. It is therefore critical that enough power is saved by ICT in order for it to be viable.

Further reading

European Commission-Energy Efficiency of the ICT Sector

European Commission-The Contribution of ICT to Energy Efficiency: Local and Regional Initiatives [pdf]