Jan 03 2023

2023 Tech Trends: What to Watch for in Energy and Utilities in 2023

Cybersecurity for critical systems, edge computing and the growth of artificial intelligence will shape the market this year.
Tech Trends 2023

Energy and utilities companies are shifting gears to embrace renewable energy sources and distribution following the August passage of the Inflation Reduction Act, which many experts regard as the most significant climate change legislation the U.S. has ever passed. The law includes billions of dollars for increasing energy efficiency in homes, the construction and modification of electric transmission facilities, and incentives for electric vehicles.

As the energy and utilities industry responds to the law, it is also contending with persistently high inflation, the need to make electric grids and infrastructure more resilient and secure, and the rise of newer technologies such as artificial intelligence.

In the year ahead, experts say, the sector is likely going to be shaped by several technology trends. These include the need for firms to secure supervisory control and data acquisition (SCADA) systems, the growing adoption of edge computing, and the use of AI to forecast energy needs, manage assets and efficiently store energy.

1. IT and OT Convergence Will Be Important for SCADA Security

Cybersecurity is by no means a new concern to the E&U industry, but worries are likely to grow as more assets become connected to the internet, and as firms converge their IT and operational technology (OT) systems.

Many E&U companies in 2023 and beyond will be moving to a platform approach to their OT to “kind of plug in all of these large applications and critical asset applications on the one single platform to have a holistic view” of what is going on, says John Villali, research director for IDC Energy Insights. That could include everything from enterprise asset management systems to asset performance management systems and even advanced distribution management systems.

That is going to require firms to have a more holistic cybersecurity view of IT and OT, as well as SCADA systems, according to Villali. It also means energy firms are going to need a clearer view of where all their data resides, since it is often siloed.

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That will require both a cultural change and hiring staffers that have that kind of cybersecurity and data management expertise, Villali says, as well as bringing on “third-party vendors with that type of expertise.”

With threats increasing from nation-state actors and cybercriminals, it’s not surprising that cybersecurity was cited in in PwC’s 2022 Global Risk Survey as a top concern for power and utility leaders by 25 percent of power and utilities respondents.

“The pressure to reduce vulnerability to threats related to the convergence of IT and OT shouldn’t rest solely on the shoulders of CISOs,” says Danny Whigham, who leads PwC’s U.S. energy, utilities and mining practice. “This needs to be an enterprise-wide effort, with buy-in from leaders across every corner of the organization.”

UNDERSTAND: Why the future of energy and utilities depends on technology.

Energy and utilities leaders should do the following, according to Whigham:

  • Tie the cyber risks to overall enterprise risks and, ultimately, to effects on the business.
  • Validate segmentation controls for critical industrial control systems and improve monitoring capabilities to detect future attacks. Segmentation uses tools such as firewalls and virtual local area networks to split networks into segments so that unauthorized traffic cannot travel between points on the network. A similar strategy, microsegmentation, breaks the network down into even smaller pieces, restricting more granular traffic.
  • Build a strong data trust foundation, including an enterprise-wide approach to data governance, discovery, protection and minimization. To guard against network downtime, businesses should deploy advanced monitoring tools and increase network redundancy with backup networking equipment.
  • Take a risk-based approach to cyber budgeting, technology implementations and other business objectives.

Click the banner to learn how energy and utility companies can secure their SCADA systems. 

2. Edge Computing Will Help with Consumers and Assets

Energy and utilities firms have been investing in edge computing technology for years to process and act upon data faster by putting computing power and networking closer to where assets are in the field. This trend will grow in several ways in 2023 and beyond, Villali says.

Customer engagement is one. As more utility customers adopt smart energy meters, solar panels, electric vehicles and other distributed energy technologies, he says, edge computing will help companies determine how customers are consuming energy and when they might be able to sell energy back to the utility.

Whigham says that edge computing can help enable a “two-way grid,” which is becoming necessary as new technologies and solutions around distributed generation and storage become more prevalent.

FIND OUT: Why innovation is happening around data management centers now.

On the operational side, edge computing will aid firms as they deploy more grid-scale renewable energy resources and assets, including wind farms and arrays of solar panels, many of which are in very remote locations. Edge computing will likely help energy and utilities companies monitor, manage and optimize these assets by collecting and analyzing data from the edge, Villali says.

That could include both making sure those assets are operating as efficiently as possible and getting analytics from the grid and distribution systems, Villali notes. For example, a wind farm needs to be monitored for how it is sending and storing energy, since the wind is not always blowing, but edge computing can also help companies determine the timing on sending energy to the grid.

“We are seeing a lot of use of edge computing around predictive maintenance and remote monitoring, to avoid disruptions in supply and reduce outages and customer cost,” Whigham says. “We see this continuing in the future and expanding into areas that further connect stakeholders in the energy ecosystem, in particular better connecting the customers with the assets that they are served by and the field crews that serve them.”

LEARN: The biggest cybersecurity threats expected for 2023.

3. Energy & Utility Firms Will Continue to Study AI

AI represents a growth area in 2023 for energy and utilities firms, Villali says, but there is still a learning curve around the use cases. In IDC’s recent Future of Operations Worldwide Survey, more than half of utilities surveyed said they are still learning about how to best deploy AI.

There are clear use cases for AI in the E&U market. One is on the operational side, including the deployment of AI-based tools for predictive and preventative maintenance for assets. “Basically, tracking history and work orders to understand the historical issues that assets have had” to get ahead of problems before they occur, Villali says.

Another AI use case is in analyzing market data around energy supply and demand fundamentals. Neural networks have been used for a long time on demand management or demand forecasting, which will continue to improve.

AI can also be used for both short-term operational decision-making, such as responding to real-time supply and demand fundamentals, and long-term forecasting about future energy demand patterns as well as consumers’ interests in green energy programs, helping providers prepare.

“To date, it seems that AI is a great complement to existing, human-initiated ways to perform the analysis, largely leveraging existing data sets with traditional analytical ability,” he says. “Over time, it is very possible that AI becomes the ‘first chair’ in these areas, with human interaction being the review point, analysis and final decision-making in the process. It may take some time for this to occur, but over time, this seems inevitable.”

Illustration by LJ Davids

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