Digitisation is gaining traction in energy sector but is Africa paying attention?

The International Energy Agency (IEA), a Paris-based think tank reports that digitalisation is increasingly having an impact on energy systems, bringing both the potential for substantial efficiency and system improvements and raising new policy issues.

It was the focus of a recent two-day workshop organised by the IEA that brought together more than 120 global experts who examined the relationship between digitalization and energy.

Through its work on smart grids, system integration of renewables, electric vehicles and smart charging, and the use of technology in the oil and gas sector, the IEA has been analysing the impact of digitalization on the energy sector for many years and concludes it may not be easy to wish away.

Digitalization is already paving way for increased efficiency in operations throughout the energy supply chain, thanks to better analytics, the use of virtual facilities, the introduction of automation and artificial intelligence, and the use of quantum computing technologies.

Through the use of sensors, remote analysis and drones, for instance, operators can use predictive maintenance to extend the life of power generation, transmission and distribution assets, reports the IEA.

Big data in seismic mapping has significantly increased recoverable resources in oil and gas. Digital technologies are starting to enable new linkages and interactions between energy supply and demand. Remote control of energy assets such as distributed generation and storage resources within smart grids is enabling better electricity load management.

Energy producers in Africa without dynamic regulatory and governance systems will feel the most shock from upheavals being created by digitisation in the sector. The impact of technology is affecting businesses, work programs and forcing policy reviews.

Advanced energy systems and the impact of digitisation is helping shale producers improve speed to market rate, generate more yields from shale formations through Horizontal Drilling technologies and has trimmed their break-even costs such that they can keep producing at sub $50 barrel oil and make tidy profit margins.

This impact is not lost on the energy sector in Africa’s largest oil producing nation where sector reforms often move at snail pace. The Nigerian National Petroleum Corporation’s recently published monthly financial and operations report states that the organisation deplored the AspenOne Engineering’ Software to optimize its engineering operations as part of efforts to keep the nation’s three refineries up and running.

“The benefit of this software is to achieve increase capacity, improve margin, reduce cost, become more energy efficient and achieve excellence in operational goal,” says the report.

Clearly, this does not begin to scratch the surface on what is required in the sector. How big an impact will digitalization have on energy systems? Which companies and business models are best positioned to take advantage of opportunities presented by digitalization? How can governments and regulators make sure that businesses and consumers benefits from digitalization? And what are the most significant challenges and obstacles?

These are some of the questions IEA workshop participants attempted to answer which still keep many big players up at night.

Big energy producers are already having conversations around significant challenges from digital disruption to existing energy business models, and how various market actors can position to take advantage of opportunities.

Some energy producers are also exploring key policy challenges, including data privacy, ownership, and standardization to strengthening digital resilience, as well as requisite regulatory environment for dealing with quickly-evolving technology and workforce challenges.

The growing use of information and communications technology is increasingly permeating modern life, from the way people work and travel to the way they live and entertain, so it is only normal that energy systems too will be affected. What is not normal is for African energy producers not to be strategising to articulate a response.

ISAAC ANYAOGU