The future energy infrastructure puts high demands on the underlying IT architecture in the energy companies. The IT architecture must enable unhampered data exchange across older technologies, cloud services, meters, sensors, OT/IT systems, etc. The goal is a Smart Grid that transforms raw data into valuable knowledge on reducing our resource consumption as a society.
By Jens Cornelius, Senior Business Director in KMD
The Danish energy sector is in the middle of a transformation process. Sustainable energy sources such as wind and solar must account for a far greater share of Danish energy production in the future.
In 2020, the Danish government and a broad parliamentary majority agreed on an ambitious climate accord to ensure a green energy sector and essential steps towards a greener industry. The agreement contains several concrete initiatives. Some of them are constructing the world’s first energy islands totaling 5 GW – one in the North Sea and one in the Baltic Sea. The agreement also details investments in carbon capture (CC) and green fuels.
The focus on sustainable energy sources calls for an adjustment of the electricity infrastructure to handle the fluctuations in energy production caused by the changing wind and weather conditions. An intelligent infrastructure will help develop the electricity system and thereby create a reliable and efficient balance between production and consumption of electricity — a Smart Grid.
Data is a cornerstone in the green transition.
The intelligent utilization of data will make the base of the future electricity system in Denmark. Meaning that the shift from primarily fossil-based energy production to 100% green energy production – the target is coal, oil, and gas independence in 2050 – will be helped by automated processes and new technology. The raw material in both automated processes and new technology is intelligent energy data.
The vision is an international network of public and private players that exchange data in a secure, lawful infrastructure. The network will allow Denmark always to have the energy needed – energy produced green and sustainably using wind, solar, biomass, and geothermic technology.
The data-driven energy company
In KMD, we work with the notion of becoming a data-driven company. In the energy sector, being data-driven means that you – from a technology standpoint – use the insights of the past to determine the investments and actions of the future. Most energy companies have, for instance, vast amounts of historical data on energy consumption in Denmark. But these data are not activated due to, among other things, technological silos, outdated platforms, and the lack of system interfaces. The data sits there – unorganized and entirely too immense to be used meaningfully.
The data-driven energy company allows itself to – via data integrations – draw meaning from the historical data to build the intelligence needed to carry out an efficient green transition of the sector in a focused and prioritized order.
Avoid the Tetris structure.
I usually describe the system architecture of the past in energy companies by using the popular computer game Tetris. In Tetris, the idea is to place the falling pieces correctly. If you are skilled and quick on your fingers, the pieces will fall into place layer by layer in the grid. But if you fail at long-term thinking, more and more unintended gaps will form – gaps that you are stuck with until the game’s logic at the end catches up with you, and the game is over.
The analogy fits the system architecture of energy companies. Just like in Tetris, energy companies that have been around for many years risk that their technical debt comes back to haunt them if they fail to build their system landscape in a way that allows for new pieces to fall into place and take part in a greater architectural whole.
One of my colleagues describes the energy sector’s lack of data exchange across the application portfolio as “Accidental IT.” Over time the system landscape in many energy companies has grown wildly in a structure that today complicates the transversal exchange of energy data, which is a prerequisite to push the green transition. Overlapping functionality, data duplication, and even dependency on End-of-Life technologies are well-known challenges in these companies.
Distributed energy systems with high complexity require an IT architecture that can handle the increased complexity.
Scarcity of expertise is a factor.
One of the challenges for energy companies is their access to the right IT professionals. The digitization wave rolls in every part of society and not just the energy sector. Most companies with a digital plan are searching high and low for employees to help them define the exemplary target architecture and carry out the IT investments of the future in a business-led tempo and sequence.
It takes deep domain knowledge to recognize the organization of the energy sector and how it will evolve over the years to come. Combining deep domain knowledge and technical expertise is vital to create the right data integrations and strike a balance between on-prem and cloud because that is a delicate balance.
On the one hand, there is a need for protecting the historic investments in the on-prem-based system portfolio that comprise the foundation of the core business. It may be true that the technologies and systems are out of date, but they still contain a lot of valuable information on both users and the energy consumption of the past.
On the other hand, the company also needs to reach for new opportunities in cloud technology, as this is one of the keys to modernizing the system portfolio and innovating the company’s core outputs. For instance, we will not create intelligent customer journeys in old silo systems in the future. They will be built in the cloud using many exciting tools to strengthen customer loyalty and ensure our reason to exist in the market.
Data collection from every corner of the business
The energy sector will have access to more and more information in the future. Therefore, energy companies cannot use the data integration principles of the past – for instance, Batch Data Integration or file-based integration – to build the data structure of tomorrow. Instead, they must work with real-time integrations and API-based integrations. Integrations require that the companies work with a roadmap for the desired integrations not to get lost in feature requests from the business side but rather stick to a future-proof plan. Secondly, it requires access to the proper IT toolbox and the right IT craftsmen to realize the plan.
In data integration projects, KMD always emphasizes the importance of bringing all energy data into play. There cannot be parts of the business where data sources or meters cannot deliver data to the platform that collects and aggregates data. The company’s sweeping digitalization journey must be just that – sweeping. The value of data integration in an energy company lies in its contribution to the green transition, which becomes more precise when all the business is transparent through data access.
Launchpad for new business models
Creating the right data collection and data analysis capabilities in the system architecture can also work as a platform for utilizing new kinds of energy data from, for instance, IoT devices. In this way, energy companies can also use the digitization of the business to build entirely new business models. To stay in the ‘lingo’ of today, you could call these new initiatives Data Provisioning-as-a-Service or Data Sharing-as-a-Service. The opportunities to establish new lines of business are many when you use the coupling between a company’s local insight and a nationally covering Smart Grid to devise and develop new services.
Considering that 20% of energy consumers in Denmark (typical companies with production facilities) account for 80% of the total energy consumption, there is a considerable market for information that can help this ‘Top 20 list’ of companies intelligently reduce their energy consumption. A sort of Insight-as-a-Service that can point to the most apparent areas of optimization through data analysis allowing the company to reduce its energy consumption, save money and help the carbon accounting.
Data enrichment with OT/IT
If the energy companies are to harvest the benefits of the sweeping digitalization ultimately – even in the outermost parts of the company – it will also include the online access of machines, equipment, processes, and products. The technologies that bridge OT and IT already exist. And in KMD, we have even built the necessary governance structure that makes the data transmission across OT and IT a secure and compliant discipline.
The enrichment of, for instance, the SCADA systems with data from smart meter devices and vice versa is, in addition to the coupling of pumping stations, IoT devices, DataHub, etc., all part of the future’s Smart Grid. The new possibilities to calculate and predict the energy balance in the grid have derived effects that will spread far into society and point in a green, sustainable direction.
Have a pleasant journey.
KMD, one of the largest Danish IT companies, develops and delivers software and service solutions for local government, central government, and the private sector in Denmark and chosen segments in Scandinavia. The KMD Group has subsidiaries in Denmark, Norway, Sweden, Finland, and Poland.
KMD has more than 1,500 Danish and international customers from the public and private sectors, including around 800 Danish and international companies.
The KMD Group has an annual revenue of around DKK 4.8 billion and more than 3,000 employees. KMD is a subsidiary of NEC Corporation, a global leader in integrating IT and network technologies. Read more at www.kmd.dk