Harry Bigwood, JD Ross Energy, Associate Director

Technological developments have been a significant focus for the power industry for many years. Progress has shown technology has evolved within a small number of designs, to now include nuclear, solar, wind, hydro-power and other energy sources. Digital technology continues to become more available and costs are reducing considerably, particularly with sensor devices and the relevant software. Data and analytics provide the potential to improve many areas of the power industry, to reduce the costs with existing and new projects and enhance overall technical performance and competition. What is also becoming more essential is the importance of renewable energy within power systems worldwide. An essential opportunity for utilizing digital technology in the power industry is the ability to integrate power systems with renewable’s.


Digital technology can improve the performance of power plants, not only benefiting power businesses but also the entire power system, the energy customer and our environment.

The benefits of data and analytics in power industry.

Data and analytics can significantly reduce costs in power systems in several ways. These systems can decrease the overall operation and maintenance costs through the development of predictive maintenance tools, lowering the costs for plant owners, the network and the overall price for electricity for customers. This can only happen with the provision of real-time detailed information which is only really affordable and capable with the use of sensors. The IEA suggests that operation and maintenance costs in power generation exceeded $300 billion in 2016. The IEA explain that a reduction of just 5% in overall operation and maintenance costs through data and analytics would save both businesses and customers approximately $20 billion every year.

Data and analytical tools can create higher efficiency levels by enhancing planning and overall performance of combustion in power plants and improve reduction loss rates within the network. Efficiency improvements in power facilities reduces the proportion of fuel used and carbon dioxide emitted. Industry experts believe that increased efficiency levels are capable for power plants using digital technology. Remote monitoring tools allow power plant equipment to operate more effectively within its optimum conditions. Monitoring via smart technology will also detect any other potential energy losses.

Data and analytics can decrease the frequency and potential of unplanned outages by improvements in monitoring and predictive maintenance technology. Additional tools can be used to assess specific points of failure to enable quicker response times. These processes will reduce the overall costs and improve the reliability and resilience of power generation. The IEA believes that overall savings from all digital technology measures could exceed $80 billion every year, which is about 5% of the total annual power generation costs.

Looking ahead, one of the most crucial benefits of digital technology in the power industry is the potential to extend the overall operational lifetime of power plants and its associated facilities. This can be achieved by integrating digital tools that can improve the maintenance and decrease the stress and impact on supporting equipment. Creating a longer lifetime will generate higher revenues to plant operators and reduce the overall investment required for the entire power system, reducing the prices for power customers.

One concern raised by this benefit of extending the lifetime, however, is how this will reduce the transition towards lower carbon sources of energy generation.

If the lifetime of all power technology was to be improved and extended by up to five years, the IEA believes that approximately $1.3 trillion of combined investment could be saved from now until 2040. This would mean investment into the power industry would be reduced by nearly $35 billion every year.

Barriers to digital development in the power industry.

Industry experts believe there are fewer barriers existing to halt the development of digital technology within the power industry. Business owners and power plant operators have specific incentives to invest as they will directly benefit from overall fuel costs savings, reduced operation and maintenance expenditures. However, a differentiation in financial incentives can prove to be a barrier to really utilise the benefits of data and analytical technology. Within regulated markets, the investment into physical assets is incentivised, whereas investment into digital technology lacks the same incentives.

The other potential barrier within the power industry relates to obtaining the data due to potential commercial confidentiality issues. The data collected from power plants and associated infrastructure is essential but there is a challenge that owners and operators may not wish to share and distribute this information. Introducing disclosure requirements can protect confidentiality and potentially solve this problem.