Harnessing digital technologies to navigate Europe’s energy transition

In a European energy market heavily affected by geopolitical upheavals and volatility, energy companies face growing challenges when balancing profitability, energy security and sustainability.

 

Advanced digital technologies and AI-based solutions are now helping companies up and down the value chain navigate these competing demands and better position themselves for long-term success.

 

Geopolitical conflicts, such as Russia’s war in Ukraine, have highlighted the critical need for energy security in Europe. Simultaneously, the growing dependence on renewable energy has added new challenges to shaping a unified energy policy for the continent.

 

The challenge of decarbonisation and energy security

 

Solar and wind power, while essential for decarbonisation, are inherently variable, requiring sophisticated forecasting and real-time adjustments to maintain grid stability, particularly during times of low wind and low sunlight.

 

The energy mix used to generate electricity is changing, as some countries curtail or abandon traditional sources such as coal and nuclear power and prioritise renewables. Liquefied natural gas (LNG) has gained traction as a transitional fuel to generate electricity, thanks to its lower emissions and reliable supply. Oil remains a significant energy source, particularly for transportation and petrochemicals.

 

In this context, digital technologies have become indispensable for optimising efficiency, managing risks and advancing sustainability. Across the energy value chain, from exploration to retail, these tools are fostering innovation, improving efficiency and resilience and driving transformation.

 

Revolutionising upstream and downstream

 

The exploration and production of oil and gas face mounting challenges, particularly in Europe. Resource depletion, regulatory pressures and the push for net-zero emissions are reshaping priorities, and digital technologies are helping enable the transformation of the upstream sector.

 

The downstream sector, encompassing refining, chemical production and biofuels, is also turning to digital technologies to decarbonise and improve efficiency and safety.

 

AI tools are used to optimise refinery design, reduce energy consumption and lower emissions, while in biofuel production, AI is used to enhance feedstock conversion to increase yields and minimise waste.

 

Digital technologies help address skills shortages and safety concerns through automation. Remote infrastructure inspection can now be done by drones, robots can undertake the most hazardous operations, and wearables enhance safety by providing operators with real-time access to data they need to do their jobs in the field.

 

Advanced connectivity solutions permit the seamless operation of these various technologies to allow predictive maintenance, better monitoring and real-time decision-making.

 

Transforming electricity generation and distribution

 

The generation sector is being dramatically transformed by the drive to decarbonise electricity production. Renewable energy adoption is accelerating, and digital tools are playing a key role in designing and managing traditional and renewable generation assets. For example, building information modelling (BIM) is a process for enhancing plant development and construction using generative design with AI to create digital models of an asset.

 

Digital twins go further, providing a dynamic virtual model of a physical asset that can be used to simulate and optimise the performance of infrastructure in real time, thereby extending its lifespan and reducing costs.

 

Predictive analytics help generators forecast demand patterns and align generation schedules with market needs to minimise waste and possible blackouts. Machine learning models identify inefficiencies in production, enabling swift adaptation to changing grid requirements and enhancing overall profitability.

 

The integration of distributed energy resources (DER), such as solar panels, energy storage systems and electric vehicles, into transmission and distribution networks creates fresh challenges for operators. Smart grids, powered by AI, enable efficient integration and deployment of these resources, ensuring reliable power delivery despite fluctuations in supply.

 

Smart sensors monitor the condition of transformers and power lines in real time, while drones and satellite imagery enable grids to be inspected remotely. AI systems analyse this data to predict failures and optimise maintenance schedules, reducing repair costs and enhancing reliability.

 

Energy trading is an activity that has taken on greater importance in today’s volatile energy markets.  Traders’ jobs have become more complicated with today’s more complex energy mix and the arrival of new market participants, such as renewable energy producers and DER operators.

 

Specialist energy trading platforms, increasingly powered by AI, are revolutionising trading strategies by helping identify market trends, predict price movements and improve operational efficiency while mitigating risks.

 

Enhancing energy retail and service stations

 

For energy consumers, the liberalisation of Europe’s gas and electricity markets, which began in the 1990s, has created a much more competitive energy retail sector, although price volatility remains a common complaint, particularly in winter.

 

To compete in this highly competitive market, energy retailers rely on advanced software to optimise pricing and customer relationship management (CRM) systems to streamline customer acquisition and retention processes.

By adopting an omnichannel approach, energy retailers can ensure a consistent experience across all touchpoints while empowering customers with self-service options for account management and energy usage monitoring, so reducing the burden on traditional support channels.

 

For motorists, service stations are the final and most visible link in the energy value chain. Traditionally focused on fuel sales, the operators of service stations need to evolve to meet new needs and the disruption created by electrification. Many are transforming into multifunctional hubs that integrate convenience retail, biofuels and EV charging. Once again, AI is enhancing customer engagement by analysing consumer behaviour, offering tailored promotions and streamlining loyalty programs.

 

As electric vehicle adoption increases, service stations will rely on AI to predict demand, optimise charging infrastructure and reduce wait times, ensuring a superior customer experience.

The ongoing transformation of the energy sector highlights the strategic importance of digital technologies. What were once operational tools have become essential enablers of resilience, competitiveness and sustainability. The democratisation of advanced capabilities, increasingly powered by AI, is lowering barriers to entry, fostering innovation and creating a more diverse and competitive energy market in Europe.

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To find out the many ways that NTT DATA can help the energy industry adapt to the challenges of today’s market, contact us at www.nttdata.com

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Michael Lawrie, Energy & Utilities Executive Manager, NTT DATA