IoT In Energy Management — Benefits, Applications, And Future Trends
The Internet of Things (IoT) is blooming in various industries, but the energy sector gains special attention attracting more and more customers, businesses, and government authorities.
IoT energy management systems (EMS) are applied to create new smart grids and are advantageous to the electric power supply chain. In addition, these systems help enhance efficiency, improve IoT security, and save time and money.
In this article, you will learn the connection between IoT and energy efficiency, and discover the benefits of utilizing IoT in the energy sector, and we will cover some IoT energy solutions available in the market.
Advantages of IoT smart energy management
It’s been a while since IoT was introduced to the energy sector for us to start noticing its benefits. Smart energy grids in cities or EMS in an office building or industrial plant are some examples of smart energy management.
Below you can find some notable benefits of IoT integration into the energy management and monitoring processes.
Companies across the globe are adopting smart energy management systems to increase sustainability. The reason is these systems are around 50% more energy efficient than conventional technologies.
Ecosystem preservation is every company’s responsibility but it is not the only motivator. The fact is that many customers are concerned about sustainability, and they will surely be happier knowing that you are prioritizing sustainability in your operations.
Green energy integration
With the help of energy monitoring sensors, power consumption data, and utilities, you can better figure out ways to maximize renewable energy usage in different services. It will also help you implement solid practices for energy conservation.
Asset maintenance optimization
Data analytics and sensors can be used for measuring the performance and condition of equipment and machinery in distribution networks and power plants. It’s similar to how connected technology is used in industrial facilities.
Smart energy management using IoT is not the only reason why power distributors and electric utilities invest significantly in modernization. In addition, they aim to optimize labor costs and enhance automation by rebuilding their operations.
For example, producers can improve their maintenance operations and automate their on-site asset management with the help of IoT-enabled monitoring systems.
Reduce operational expenses
Evolution of energy prices, Oct 2020-Jan 2022. Source: IEA
The past two years have seen a historic rise in energy costs. Depending on the region, the electricity price increased from 13% to 135% between the mid-2021 and mid-2022 periods.
Due to this significant increase in energy costs, companies are now prioritizing energy saving and trying to reduce electricity spending with the help of the Internet of Energy Things.
Energy consumption predictive analysis
Pairing an energy management system with machine learning algorithms and IoT technology will provide you with a tool that can predict your future energy consumption. Using the insights from the tool, companies dealing with energy can create a solid, data-driven strategy to produce energy. They can also help utilities enhance their pricing models based on the demand.
Predictive algorithms help identify probable issues in your operations before they happen. As a result, you can take preventive measures beforehand, instead of wasting time and resources trying to deal with the malfunction’s aftermath.
For instance, energy providers can take insights from energy consumption trends and predict load spikes. This way, they can plan strategies to prevent overloads and balance demand.
Effectively address outages and accidents
If you can’t apply a predictive measure in a scenario like blackouts or accidents by natural causes, you can still leverage smart analytics systems. These systems are used extensively to locate issues and reduce damages.
For example, if you use sensor data, operators can find the root cause of a problem, assess the severity of the damage, and develop an effective restoration plan.
Top 5 applications of IoT in energy saving efforts
These were the key but not only benefits of IoT integration in the energy sector. Now, let’s explore the five main areas where IoT power management and energy control are applied today: smart lights & controls, energy management systems, green energy, energy storage, and connected plants.
1. Smart lighting, air conditioning, and temperature controls
Smart HVAC System. Source: Euristiq
Cutting down on energy wastage is the most obvious way of saving energy. Systems like thermostats, smart lighting, new-gen sensor-based HVAC systems, etc. can automatically maintain optimal conditions in homes, offices, and other spaces while optimizing energy usage.
These systems are equipped with various sensors (light, CO2 level, humidity, motion, etc.) that can dynamically adjust the power consumption profiles to changing conditions to avoid energy wastage.
A good example of an IoT energy management solution is Philips Hue. The company offers various smart LED lighting solutions outdoors and indoors that can adjust to users’ routines and preferences. Philips Hue family products were proven to consume 85% less energy compared to traditional bulbs.
Other examples of IoT energy-saving systems are Ecobee’s smart thermostats. Similarly to Philips Hue, the Ecobee thermostats can automatically decrease energy usage when it’s the most costly which results in 33% of additional energy savings.
2. Energy management systems
Digital systems for energy management enable businesses, households, energy professionals, and governments to monitor, control, and manage their processes, resources, and assets in supply chains. These digital systems usually consist of meters, controls, sensors, analytics tools and applications, and so on.
For instance, smart meters can provide real-time energy consumption monitoring, measure spending dynamically, and share this data among utility companies and end users. The data, in turn, is helpful for suppliers to act proactively and create tailored demand-response programs, and adjust pricing. At the same time, consumers can control their energy usage with the help of applications to limit electricity wastage, and respond quickly to sudden load changes.
Furthermore, sensor-enabled assets, whether they are household boilers or heavy machinery at industrial plants, can report load levels in real time and forecast overheating damages or energy outages happening on the line. Safe to say that preventing damage to costly pieces of equipment like heavy machinery can result in significant savings.
By using data analytics, your management team can balance energy usage and maintain equipment performance, and wear and tear at an optimal level to ensure your assets’ prolonged life.
Sensital’s IoT energy management system for commercial and industrial spaces provides energy-saving mechanisms to maximize productivity and optimize energy usage through the data coming from a network of meters and on-site sensors.
Another good example is a smart metering system for households by Sense. It connects to an electric panel to provide users with full visibility and control of their energy use so they could take a proactive part in energy management efforts.
3. Green energy management
In the present day, it’s far more convenient to adopt and expand the use of green energy with the help of IoT. IoT-enabled wind turbines and residential solar systems can provide free power to fulfill the energy demand of a household, fully or partially.
As a result, residential renewables can reduce the average energy bill by up to 100% allowing a household to go off-grid completely in the full convergence scenario.
Apart from helping save energy, adopting residential renewable energy systems can also reduce carbon footprints contributing to environmental conservation.
Panasonic is a good example of leveraging IoT in green energy management. It offers many solutions like solar systems for smart buildings, homes, industries, and commercial users.
4. Energy storage solutions
Battery Energy Storage System. Source: IOT Insider
Energy storage is a brand new market, drawing huge attention in this age of growing IoT use in smart homes and IoT adoption in the smart city concept.
Generally, energy storage allows users to become energy resilient and independent during power outages and other problematic scenarios in line. Smart energy storage enables efficient and controlled energy backup while providing the residents with management controls.
Energy storage systems help residents make better-informed decisions on how much energy to spend off-grid and which loads to protect. Integrating smart storage systems will help users of renewable energy like wind or solar to effectively manage the generated power. In addition, they will be able to control the surplus and achieve maximum performance in their energy network.
To put it simply, energy storage is an IoT energy-saving system allowing residents to control the volume and source of their energy while responding to problems on the line dynamically.
Lumin Energy Management Platform is an example of smart energy storage as well as an electricity metering system. It allows users to monitor and manage their energy consumption and simplifies solar adoption in residential buildings.
5. Connected power stations
IoT can be used to optimize operations related to power production, thereby, saving energy in the process. Power plants, wind turbines, stations, etc. consume considerable energy and need maintenance along with resources and effort to run them.
For example, using sensors to perform conditional monitoring of wiring and equipment continuously can help balance the load on the line and prevent overloads. Predictive maintenance also ensures timely equipment repair and mitigates costly downtimes, accidents, and blackouts.
In certain scenarios, network-connected renewable grids and power plants provide consumers with a transparent view of where the energy is coming from. Using this information, the end users can also get the option to choose the cleanest energy source available.
Whatttime is a non-profit organization that develops an IoT platform for enabling automated emissions reduction. Simply put, it’s a system that can monitor grid networks and dynamically shift to the energy source which leaves the smallest carbon footprint.
Internet of Things in Energy Market is expected to grow at an annual CAGR of 25.1%
What consumers can expect in the next 5 years from IoT in energy management? Due to the many advantages of IoT energy management, this market is growing at an exceptional rate with an expected compound annual growth rate (CAGR) of 25% and reaching USD 75.3 Billion by 2026.
However, the market growth has introduced some challenges in the compatibility department. If different IoT devices are incompatible with one another in your system, you might have to buy additional software or hardware to enable communication between those devices.
Finding ways to make devices compatible with each other may be time-consuming and inconvenient. Ultimately, incompatibility is a frustrating problem in energy management using IoT, which can delay energy-saving technology adoption.
Consequently, the most prominent IoT trend currently is a focus on increasing interoperability among different applications, devices, and systems. That means each part of an IoT system must communicate with every device on a plug-and-play basis which won’t require any additional configuration, hardware, or software.