Energizing the Low-Carbon Future 2024

In the wake of COP28 and the promises made there, the international energy sector is under pressure to move quickly to advance initiatives meant to elevate low-carbon, alternative energy sources to the forefront of the market. Energy businesses will need to priorities the implementation and scaling of innovations rather than just identifying them if they are to make progress in areas like the energy transition, decarbonisation, and the expansion/integration of renewables.

In the process, cooperation becomes clear as essential to the success of these kinds of projects. For energy businesses to maximise overall impact and business value, they need to cultivate an ecosystem of partnerships and technology.

The trends that follow outline important areas of attention for energy companies in 2024 and beyond, showing how profitable new business models that support sustainable growth may be developed with the help of an integrated approach to digitalization.

Renewed Focus on Industry 4.0

Oil and gas firms are under significant pressure to modernise ageing assets and raise operating standards due to new regulations and market expectations. For example, the increasing need for regional energy supplies forces countries to modernise their deteriorating infrastructure and strengthen their cyber defence, all the while coordinating capacities that have been gradually built up over time. National industrialization standards, like those found in Germany and India, act as a catalyst for digital transformation, causing increasingly complex digital activities that require compliance with regional laws and policies.

Government agencies are scrutinising the environmental impact of industrial operations more closely, so suppliers throughout the value chain are under more pressure to invest in Industry 4.0 technologies for improved data collection and transparency. This means that resource efficiency and thorough reporting are becoming more and more important. Additional digital operations optimisation could allow businesses-early and late adopters alike to save expenses and devote more resources to big, ambitious projects.

Embracing Technological Innovation in Shifting Business Models

Businesses can investigate new products and business models with advanced technologies, such as converting plants to create related items with reduced carbon footprints. Digital twins, AI/ML, and data analytics are enabling the creation, testing, and study of novel models and products. Furthermore, it is expected that blockchain technology will be crucial in supporting the creation of distributed energy resources and improving traceability between molecules, goods, purchases, and credits.

As these services save clients' upfront capital costs, it is anticipated that the popularity of Energy-as-a-Service (EaaS) offers would increase and encourage the use of low-carbon energy sources. For energy providers, this is a huge potential. As such, an evaluation of current technology programmes is necessary to make sure they have the necessary capabilities to enable managed service offers. Cloud computing, 5G, linked edge, and remote sensing are crucial technologies in this context.

Technology collaborations for systemic decarbonization

Decarbonizing value chains necessitates energy businesses to engage with various technologies, innovators, and service providers across their operations. Collaborations with fuel distributors, battery manufacturers, vehicle producers, and technology service firms play a crucial role in constructing the infrastructure, platforms, and electric vehicle (EV) capabilities required to facilitate the energy transition. Visionary enterprises integrate data analytics, Internet of Things (IoT), and responsible General Artificial Intelligence (GenAI) to analyze distribution patterns, thereby fostering more energy-efficient supply chains and the production of less carbon-intensive products. Moreover, the integration of robotics, AI, and machine learning enhances asset operations by automating inspections, improving predictive maintenance, and aiding in the detection of issues such as flares and methane leaks. With a focus on enhancing emissions capture, energy companies utilize modeling platforms to explore alternative operational approaches for decarbonization. Global coordination underpinned by responsible AI principles is essential to drive these efforts forward.

Scaling and Integrating Renewables

Energy businesses are expanding their portfolios by incorporating renewable fuels and renewable power assets, thereby influencing Scope 1, 2, and 3 emissions. As these companies revamp their business models to align with ambitious sustainability objectives, they must enhance and integrate capabilities to introduce products such as hydrogen, sustainable and renewable fuels, as well as wind, solar, and geothermal assets. This necessitates fostering adoption of standardized practices across entities within the value chain, akin to the transition witnessed in the sustainable aviation fuel sector. Companies will be required to leverage their existing digital capabilities to drive the advancement of renewable energies and the associated platforms and integrations essential for navigating emerging operational environments and business models.

Continued transitions to data platforms and open standards

In order to scale new business models and enhance the performance of current assets, companies need to transition from siloed data to platforms that offer greater accessibility and flexibility. Utilizing cloud platforms and adhering to open industry standards will empower companies to leverage new capabilities by facilitating data consumption and applications tailored to meet industry-specific requirements, such as security protocols and reporting standards. This transition to more accessible data platforms will also assist companies in addressing challenges related to knowledge management and cross-generational training. Moreover, there is an increasing reliance on AI-driven training, which utilizes data points from employee experiences and other sources to develop programs that shape the workforce of the future in the energy industry.

Energy companies find themselves presented with a distinctive opportunity to redefine the industry by exploring alternative fuel sources and business models. This endeavor is no small feat, and 2024 marks just one step in an ongoing journey. Through strategic implementation and coordination of technologies such as AI, industry cloud, 5G, IoT, and data analytics, these companies can expedite returns on investment and amplify their impact at a critical juncture where the industry stands poised for transformation.