Helping Ireland’s energy sector power ahead

A major new report, KPMG Global Tech Report: Energy Insights, shows that when it comes to technology investment the energy sector is both more resilient and more willing to take risks than other sectors, but that it needs to increase investment in data capabilities and AI in order to fully benefit from digital transformation.

Globally the sector is at a pivotal crossroads, facing unprecedented challenges and opportunities.

Here in Ireland, addressing those challenges and seizing the energy transition opportunities will require a unified approach that integrates technology, data and strategy, it finds.

That’s because it is now imperative for energy leaders to leverage advanced technologies and data driven insights.

Global vision

The report, which is based on a survey of 2,450 global technology leaders, examines the experiences of energy technology leaders in 19 countries.

It finds that energy companies, by methodically experimenting with AI use cases and leveraging cyber security frameworks, are able to protect against the threats that could hinder their digital innovation.

But while the sector matches or surpasses other industries in many IT disciplines, its achievements are often confined to isolated functional areas rather than spanning entire organisations or ecosystems.

As innovation opens up new potential in the sector, a balance urgently needs to be struck between rapid adoption of, and a strategic approach to extracting genuine value from, new technology. 

Much done, more to do

Energy companies are already experimenting with AI use cases in a methodical way.

But a sizeable proportion are taking a cautious approach and are still at the proof-of-concept stage of AI experimentation, with data maturity gaps making it harder for the sector to prove the true value of this technology.

In every data management category measured in the research, the energy industry lags behind the cross-sector average on data maturity — especially regarding data interoperability, security and the extraction of meaningful insights.

There are reasons for optimism. For a start, the energy sector is skilled at getting financial value from cyber security. 

The energy sector is also bolder than others on technology, and doesn’t let influences such as economic uncertainty, complex regulatory developments or market competitiveness dampen its confidence in exploring new technologies.

The report also finds that growing market competitiveness has dented the investment confidence of other sectors more than it has the energy industry.

But to successfully navigate what is a turbulent landscape with both confidence and clarity, energy executives must build resilience through targeted technology investment and innovation, it finds.

They must also build a strong data backbone.  As the industry evolves, robust data infrastructure will be essential for evaluating the impact of new technologies.

They must mitigate technical debt too, addressing legacy systems and outdated technologies. Establishing structured plans to manage and reduce technical debt can help maintain scalability and interoperability while avoiding bottlenecks during digital transformation.

Power of AI
 

AI can dramatically improve efficiency within energy systems and drive the rapid scaling of renewables. Embracing AI fully, with a strategic focus on sustainability, can position companies at the forefront of the clean energy transition, it says.

But the industry must also enhance its partnerships and ecosystem collaborations, working with new technology providers, research institutions and startups to co-develop innovative solutions and access expertise in cutting edge technologies.

This will accelerate AI-driven advancements in renewable energy, grid management, and predictive maintenance.

Empowering teams by building AI literacy and fostering cross-functional collaboration to scale pilots responsibly is also important.

Digital transformation, which includes the convergence of information and operation technology (IT/OT convergence), is an area in which KPMG has significant experience. For energy, putting all these steps in place is now vital, as the sector is at a tipping point.

Ireland’s energy sector
 

In Ireland, as elsewhere, the national grid is the enabler of economic growth. “Every business in the country relies on the grid and the ability to pull power from the system in order to meet their demands,” says Rodney Doyle Managing Director, Energy Transition, KPMG.

But while the national grid is set to expand massively, it will take time.

“In the meantime, we have to utilise the existing grid better. The way to do that is to understand the performance of your network, for generators it is about understanding the performance of your generator, and if you’re a large demand site, it’s about understanding how your business can be more efficient. The way to do all that is to utilise your technology better – and data opens the door to doing that,” he says.

“It’s why building a strong data backbone is key. That is what allows the grid operators, the generators and the energy supply companies to make decisions about what products they can offer and about how flexible they can be.”

“It’s about being able to get the data out of measuring devices such as smart meters and back in centrally – whether from houses, businesses, or from the grids  – and then being able to analyse it. It’s a huge amount of data, running constantly in very fine timeframes, which is where AI has a huge role to play. The computational ability it brings is what will enable you take all this information in and use it to make decisions in a timely fashion,” he says.

Building the grid while running it
 

Right now many organisations must balance old technologies and applications with upgrading to new technologies such as advanced distribution management systems. At the same time they must build new niche partner ecosystems.

Because the demands on the power system have increased, and the grid is coming under so much pressure, enormous flexibility is required of what have traditionally been monolithic systems provided by well established, traditional providers.

"We're seeing a growing demand for traditional IT systems to support greater flexibility by enabling applications to integrate with them and extend their capabilities,” says Doyle.

“Organisations need to build resilience into the core systems they’ve got, make sure they stay current as they start to bring on new AI solutions, and, with the new ecosystem of partners they need, to ensure they are not creating technical debt.”

On top of all that, “ensuring those solutions are scalable and that they have interoperability with existing systems is key.”