The need for energy genealogy and accountability

We are in the midst of one of the most consequential energy transitions since humans discovered fire. The increasing availability of clean electrons has motivated businesses large and small to enhance their green credentials. And for good reason, writes Matt Tormollen, CEO of POWWR.

Being environmentally conscious attracts customers, appeases regulators, retains staff, and can gain monetary grants from government.

As the world moves to a new era of energy production, renewables’ share of the power generation mix is set to rise to over a third by 2025, with solar and wind driving most of the growth. In fact, the renewable energy market already estimated to be worth $1.21 trillion is expected to grow at a compound annual growth rate (CAGR) of 17.2% between 2024 to 2030.

Capturing even a sliver of this market represents a massive opportunity for energy suppliers. However, murky waters persist.

In their drive to appeal, certain energy suppliers have been guilty of greenwashing in the past to exaggerate their environmental credentials. However, consumers are remarkably savvy and those suppliers – like others within the industry – have recognised the need for greater accountability.

They are looking for ways to produce a certificate of authenticity – such as a Renewable Energy Certificate (RECs) – to prove that the energy they generate is indeed from renewable sources.

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The need for energy genealogy

The problem with producing such a certificate is that ensuring complete energy genealogy throughout the supply chain remains remarkably difficult.

One of the reasons is a lack of consistent data within the supply chain. The majority of energy production globally still runs on clunky and decades-old software. This makes data siloed and difficult to assess. Plus, the systems themselves have been designed for predictable assets like coal or oil, not dynamic assets like solar and wind.

This dynamism is only making the problem of extracting intelligence more difficult by increasing the amount of data that is produced. In fact, the energy industry is now thought to generate up to 200 exabytes of data per year. This is a huge amount equivalent to 200 billion gigabytes.

Thankfully, there is now technology available – underpinned by artificial intelligence (AI) and machine learning (ML) – that can sift through this mountain of data in a timely manner.

By doing so, it helps facilitate accountability by collecting the requisite data to produce the aforementioned REC.

Novel approaches to meet sustainability goals

Of course, as well as legacy suppliers looking to clean up their act to appease stakeholders and gain credits, there are also new entrants wanting to set themselves apart by being seen as an environmentally conscious alternative.

For some time, technology has been used to facilitate everything from providing an end-to-end connected journey for energy sales, to managing risk at a time of unprecedented price volatility.

Yet, recent advancements in technologies such as Internet of Things (IoT) sensors, robotics, and AI have helped create novel approaches to help meet climate and sustainability goals. However, accessing these devices and the data held within often involves manual and time-consuming processes. Plus, it must be remembered that technology such as AI is only as good as the data the flows into it. Therefore, it is not about collecting more data from such devices but collecting the right data.

Obtaining intelligence from this data is so important that the market for such big data analytics use within the energy sector is expected to grow from $8.37 billion in 2023 to $14.28 billion by 2028, at a CAGR of 11.28% during the forecast period (2023-2028).

Completing the circle

Suppliers that help the world access cheaper and cleaner sources of energy during the renewable energy transition we are currently experiencing will surely grow into enduring brands for years to come.

Yet, accountability will be key. Ensuring energy genealogy throughout the supply chain has been difficult in the past due to production of energy becoming increasingly decentralised as it has become decarbonised. However, technology such as IoT sensors can facilitate accountability by collecting energy data from a myriad of distributed devices.

For some time, data has been imperative in the energy sector to help predict weather patterns, production demand, and optimise operation process efficiency. But as regulators, stakeholders and customers look to hold energy companies accountable for the claims they are making, proving the energy they are producing is from renewable sources has never been more important. Or more difficult. Yet, using the latest in AI empowered technology can help complete the circle.

The benefits are twofold. As data becomes more prevalent and accessible, energy management solutions will also become more precise, amplifying the benefits businesses can derive from renewable energy. It will enable them to save on energy costs, whether by procuring energy from the cheapest supplier or facilitating energy use when rates are cheapest.

About the Author
Matt Tormollen, CEO of POWWR brings over 20 years of executive leadership in global, venture-backed businesses. His experience in building high-performing teams that deliver customer value in downstream energy through scalable cloud solutions drives POWWR’s strategic focus. He has a Bachelor of Science in Information Systems Management from the University of Maryland, Baltimore County.