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How industrial IoT is Impacting the Energy Industry

How Industrial IoT is Impacting the Energy Industry

The Internet of Things has catalyzed a revolution of sorts in almost every industry with its capabilities. Today our machines have become smarter, faster, and more precise because of their connectivity with the internet. Because we can now connect our machines to our phones, computers, and other peripherals, the extent of management is amazing. A similar impact is seen in the energy sector, where the insertion of IoT has led to the development of several types of machines with the prefix “Smart.”

We have smart meters, smart electrical devices, automated systems, smart grids, sensor-driven networks, etc. Between 2018 and 2026, the expected CAGR of IoT in the Energy sector alone is estimated to grow by 10%, taking the total market value to $298.26 billion. This article will explore how the energy sector can leverage IoT to build even better machines and systems.

What Does Energy Optimization Comprise?

Energy optimization is using and not using electricity in a closed and built-in environment for the purpose of maximizing the benefits to the climate and people. Technically speaking, energy optimization is about creating energy-efficient systems, managing the demand response responsibly, and fuel switching to reduce the burning of fossil fuels inside the homes and switching to electrically powered systems.

Both residential and commercial establishments can benefit from energy optimization techniques and systems. Energy optimization is like an energy usage intervention and building up the required systems to scale-up performance and manage the excessive burden with smart management.

All these aspects are delivered with three components of energy optimization;

Measurement: Smart metering solutions deployed with Advanced Metering Infrastructure (AIM) help take control over the energy costs. Moreover, it helps sustain a reliable energy supply to the consumers.

IoT takes this measurement to the granular level, collecting data from the source and interpreting it to facilitate effective management. We can set building, level, floor, and section-wise energy consumption metrics to build high-impact and precise plans.

Monitoring: Under monitoring, IoT-enabled devices can deliver multiple aspects of energy utilization and consumption. Leading with demand monitoring, IoT generates data that becomes fodder for analyzing energy consumption and creating predictive models for the future.

Effective monitoring is required to continuously identify the demand loads and setting different alert parameters to reduce the risk of critical peak consumption while managing the demand and load accordingly.

Another type of monitoring in energy optimization is power quality monitoring, which is also important for a sustainable future. Poor power quality can reduce efficiency and lead to higher energy costs, not to mention the damage done to appliances and machines.

With IoT integrated into the energy utilization system, you can identify power quality problems. Knowing about voltage swags, swells, and harmonics becomes easier, which can help with predictive and preventive maintenance.

Management: With Measurement and Monitoring delivered successfully, Energy Management is automatically achieved. An IoT-enabled system can also help with fault management and device management delivered via smart reporting.

Plus, enterprises and organizations can ensure policy standards compliance and following of the regulations.

In totality, the combined impact of these three components is that we can optimize energy consumption leading to lower usage and lowering the impact on the environment. The environmental benefits of energy optimization are crucial at this point as we are struggling to keep the Earth warmer.

Furthermore, you will experience a reduction in energy demand due to optimization, which is a cost-saving procedure. The lower demand mainly comes from effective management, predictive, and preventive maintenance.

Lastly, there is the benefit of risk management, where the electrical circuits, meters, and peripherals are monitored regularly.

Integration of IoT in the Energy Sector

With IoT integrated into the energy sector, the latter has stepped into the Industry 4.0 dimension and stands to reap the benefits that come along with it. In Industry 4.0, machines and plants are built to adapt to the changing behavior outside of their network, for instance, energy or electricity.

These changes are not manually interpreted but facilitated via self-optimization and reconfiguration, leading to intelligent systems and processes. Within this, the required engineering models, methods, and tools will become a key factor in implementing the advanced systems and facilities.

When IoT comes into the energy sector, it allows the machines and connections to communicate with each other and the outside world. This ability to communicate becomes a critical factor in driving energy production, consumption, and delivery.

The integration of IoT and energy has several potential benefits (which we will discuss later in the upcoming sections). From the top, understand that IoT can help the energy sector realize the importance of data gathering and capitalize on it to build innovative systems.

With IoT integrated into the energy sector, we can successfully create a fully automated sensor-driven network. Such a network will support quality monitoring, demand monitoring, fault management, device management, smart reporting, and provide access to advanced analytics and quality monitoring.

While we have discussed some of these concepts in the sections above, it is essential to mention them here as they are also a byproduct of the integration.

What This Integration Leads to…

The inclusion of IoT leads to optimization, which is a key factor in energy management. You must understand that energy optimization and management are insanely connected here, and they both help build an energy-intensive production system in the industry.

Another key component required to make this association fruitful is data, which is also supplied via IoT. Until now, the specification of data and the ability of the machines in the network to acquire the same is still a challenge.

But even with this challenge, we have been able to achieve outstanding results in terms of refined energy consumption and building energy efficiency.

Benefits of IoT in the Energy Sector

Benefits of IoT in the Energy Sector

In the energy sector, interconnection and interoperation is important. An energy consumption model that operates on the foundation of these components is beneficial. IoT has become the key driver in this merger of two systems and is bringing reforms in the industry that we are experiencing today and will continue to do so in the future.

Here are some key benefits of the integration of IoT in the Energy Sector;

  • Remote Asset Monitoring

45% of the energy companies operational today have deployed IoT to monitor assets and performance. And these organizations are performing the functions required remotely.

IoT sensors can be attached to the generation, transmission, and distribution equipment. These sensors can supply the required data, which can be used for remote monitoring of the same divides. The sensors affixed here will measure vibration, temperature, and wear or tear.

All this leads to predictive and preventive maintenance, which ensures zero device downtime and effective device management. The companies will benefit from reduced sudden maintenance calls and costs. They can provide good customer service and ensure the reliability of the equipment, ensuring that it always gives optimal performance.

Another benefit of IoT here is creating advanced digital models with the Digital Twin technology. The data supplied and collected by IoT-enabled devices can be used to create virtual models of the devices in a remote location. This can help provide preventive maintenance programs and troubleshoot devices from a remote location.

Lastly, such a system can help detect leaks in the wiring and the entire infrastructure, improving overall safety and ensuring resource optimization.

  • Distributed Grid

With the arrival of solar energy generation at the rooftops of houses and commercial buildings, the energy companies are finding it hard to manage all the resources. But IoT-enabled systems have come to their rescue and helps build the required infrastructure to monitor and manage the small energy generation resources.

The distributed smart grids can be set up to manage energy generation and consumption from a single establishment. This will reduce the manual work required to keep a record of the energy usage and creation, along with the ability to detect changes in the electricity supply and demand.

More importantly, an IoT-enabled smart monitoring system can supply energy companies with the required information they need to manage the demand and supply.

  • Informed Users and Customers

Where smart meters and grids can benefit the companies, they can also be useful for customers from several areas. They can view the energy consumption requirements on their mobile devices. Companies can now send detailed information about energy consumption to their customers and create an informed customer base.

Energy optimization is achieved with this setting as the customers can measure the power consumption of each device and select the range of appliances in the future accordingly.

Household devices like thermostats can be automatically controlled via IoT peripherals and optimize their performance to ensure the lowest possible energy consumption.

  • Better Grid Management

As an energy company has to take care of the entire grid, IoT can help them effectively manage the same via advanced reporting and data generation. With sensors and systems installed at different substations and distribution power lines, they can easily leverage data to make decisions on voltage control, load switching, network configuration, and other systems.

Sensors can also send alerts about the potential risks to the grid and their impact on the systems. Furthermore, smart switches are utilized to automatically control the energy flow, especially in the problem areas, and reroute the power to maintain the required equilibrium.

The power usage and consumption data supplied by the sensors can become the core information for load forecasting and managing energy congestion along the transmission lines.

  • Sustainable Energy

Lastly, if we were to collaborate on all the benefits and capabilities provided by IoT-enabled systems, we can easily look forward to implementing sustainable energy systems in the future.

When we talk about sustainable energy, it is about saving energy today and implementing good consumption practices to save energy for the future generation.

IoT can help us achieve the same by helping introduce smart energy generation, management, utilization, and consumption systems. We can build an entirely new system to consume energy smartly or implement changes in the existing systems to ensure the best possible performance and output.


Energy optimization, as a technique, is about saving energy via implementing smart consumption practices and leveraging the latest technologies to monitor, measure, and manage energy consumption. Companies are readily using IoT systems, and 47% of the energy company executives say that they have implemented IoT in almost every function. IoT has the potential to transform every sector of our economy, including energy. In the coming years, we can only expect to see systems and peripherals which are smarter, more efficient, more distributed, and lastly, more reliable than what we have today



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