How will the Internet of Things transform energy?

Imagine managing a major utility company. It’s late Friday afternoon and weather forecasters are predicting severe thunderstorms packing hail, high winds and possible tornadoes. Or, how about if you employed thousands of workers across a vast oil and gas supply chain whose productivity depended on uninterrupted production capabilities. These are the kinds of everyday business situations in which the Internet of Things could be the difference between manageable inconveniences versus major disasters.

As early as last August, Gartner analysts positioned the Internet of Things(IoT) at the “peak of inflated expectations” on its latest Hype Cycle for Emerging Technologies. Well into 2015, the market fervor has yet to sink into the trough of disillusionment. Every industry is poised for transformation, including oil and gas and utilities. Not surprisingly, IoT is one of the big topics industry luminaries are hashing out this week at two SAP-sponsored events being held in Berlin: the International SAP Conference for Oil and Gas, and the International SAP Conference for Utilities. Energy companies at both events will rub shoulders with industry peers, SAP experts, and partners, for performance benchmarking, to hear lessons learned and gain strategic advice on using the latest innovations to power competitive advantage. To get the inside story, I talked with Peter Maier, General Manager for Energy and Natural Resources at SAP, who is keynoting at both events. You can read my entire interview here.

The way Maier sees it, business processes and networks will no longer be powered by people, but equipment connected through IoT. Today people control machinery and initiate maintenance, controlling shut-downs and ordering replacement parts and repairs. Inventories may be unnecessarily inflated and workers often scramble to ensure safety and uptime. In the near future, machines will take on those tasks, sparking full-fledged industry transformation in the oil and gas industry.

“With the Internet of Things, machines will say, ‘my oil pressure is a little high and filter is clogged. I’m ordering a service technician’,” said Maier. “The technician then cleans and replaces the filter. But that technician doesn’t necessarily work for the company that owns and operates the compressor. The machine has automatically sensed the problem and sourced the business network to find a qualified technician viaFieldglass, contingent workforce management software.”

In the utilities industry, combining big data from the smart-grid with weather forecasts will allow companies to minimize outages, control costs and better serve customers.

“If you know that storm will hit on Friday, you have the data from sensors to estimate the potential for customer outages and can reroute maintenance staff to ensure there are sufficient maintenance engineers available to make repairs quickly,” said Maier. “Imagine what happens when your dishwasher, air conditioner or freezer are exchanging data with your electric utility to take advantage of cheap energy generated by wind and solar power plants. Overall, the Internet of Things will help companies dramatically improve reliability, safety and security.”

Clearly, this kind of transformation cascades across the entire supply chain with far-reaching impact. Having a real-time view of assets and operations may be technology-driven, but when it comes to the energy industry, people will enjoy the tangible results of transformation every day.

This article is published in collaboration with SAP Community Network. Publication does not imply endorsement of views by the World Economic Forum.

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Author: Susan Galer is a Communications Director at SAP.

Image: Internet LAN cables are pictured in this photo illustration taken in Sydney. REUTERS/Tim Wimborne.