The state of the 'Industry Cloud' in the energy sector
When the team at Locus Energy started their company, their primary mission was to monitor the core components of solar photovoltaic (PV) systems to provide better insights into kilowatt hours, equipment, and maintenance. Solar technology was just starting to emerge, and they wanted to serve their clients, who were mostly solar providers.
But as the solar industry has grown, so has the potential for Locus Energy's services. By utilizing cloud technology and building a more intelligent solar monitoring and analytics platform, the company expanded their reach and started providing insights into PV systems that were incredibly beneficial to the many players involved in the process -- from investors to installers to leasors.
With an intelligent analytics platform, maintenance crews don't have to visit solar sites unnecessarily, so money is saved. Better investments and improvements will be made because problems are more easily specified. Today, Locus Energy has more than 400 customers and more than 60,000 solar PV systems it monitors -- and even has clients who don't use its monitoring systems, but use the analytics platform.
"The cloud is allowing us to repurpose and communicate with a much broader set of constituencies than in a non-cloud world," said Dan Loflin, VP of business development for Locus Energy.
Locus Energy now offers solar forecasting and grid insights, making utility providers and smart grid operators natural partners in analyzing the impact solar has on the grid. Other potential collaborators include investment banks, rating agencies, and companies in other facets of the solar industry, which all want the same thing: ways to better analyze and improve their solar PV systems.
"It started with core data and now we're building greater analytics and gleaning better insights from that data," Loflin said.
As the technology for clean energy matures and solutions gain momentum among the mainstream crowd, startups and investors are becoming more interested in the cleantech industry from a service perspective. Changing from a centralized to a decentralized business model is key for both clean energy providers and utility companies. It's personalizing data to connect people with their energy usage, and making sure the processes become more efficient.
SEE: How cleantech-as-a-service will drive renewable energy adoption
The state of the energy industry
In 2014, Gartner published a report listing the top industries adopting cloud technologies, and energy was one of the lowest on the list. It's well-known that utility companies are often slow to adopt new technology, but as people start to produce their own power, this mindset is changing, albeit slowly.
"The energy industry is naturally asset-intensive, given the infrastructure required for production and delivery of utility commodities (electricity, gas, water) as well as oil and gas infrastructure," said Randy Rhodes, research director of energy and utilities advisory service at Gartner.
According to Rhodes, Gartner predicts that by 2018, 30 percent of energy and utility companies will have put asset data in the cloud to support asset performance management (APM). "Many of the earliest benefits will come simply from data that is already being captured," he said.
In the next decade, as solar PV, energy storage systems, and hybrid electric vehicles (EVs) advance into the mainstream, what has been a centralized system will become increasingly distributed, so these types of cloud-based analytics will play a key role in managing those monitoring and control systems, he said.
But in this industry, cloud providers have to be more specific -- the same solutions for oil and gas companies obviously won't work as solar or wind companies. And, because the field is so new, there are many small players competing and working to find the right niche. That's not necessarily a bad thing, as there are many areas where cloud-based services can bring value in the clean energy sector.
Here are a few examples to give a better idea of types of services throughout the cleantech industry:
- Charge Point is the largest network provider of EV charging stations. It has more than 21,000 spots across the US and provides real-time data on the usage of them. It also provides cloud services to other companies who make chargers.
- Greensmith provides energy storage software and services with a battery-agnostic platform. They offer services for the grid, like frequency regulation and peak energy management, and they also have behind-the-meter applications, like smart metering, backup power management, and microgrid management.
- Sunlayar uses big data to improve the solar installation process. Using AI, wearables, and mobile devices, this startup is trying to make solar installations much more efficient, faster, safer, and more reliable. It's still in beta, but looks promising.
- Folsom Labs makes HelioScope, the company's solar design software. It generates proposals, analyzes design decisions, and streamlines workflows. By automating the process so much, it cuts down on time for solar design.
Cloud services in the oil and gas industry
Although the world is moving toward clean energy, oil and gas companies aren't going anywhere anytime soon, and they have had to update their own processes to keep up with the rapid pace of technology. Oil and gas companies have massive operations -- and therefore, massive amounts of data aggregated from the fields and processing plants.
According to a 2013 Accenture report, oil and gas companies are utilizing software service systems much more than most people realize, especially as environmental concerns have become a bigger part of the conversation. For example, Continental Resources in Colorado uses Enviance, which makes a cloud-based Environmental, Health, and Safety software it uses to manage compliance processes in hydraulic fracturing, or fracking, operations in the area. YouSendIt (now HighTail) is another company that offers a way for Tullow Oil employees to send oil well data, maps, and GPS information securely through its cloud platform.
Another example is Chevron, which uses Locus Technologies' Environmental Information Management system, to manage environmental data.
This slow adoption among oil and gas companies extends to utility companies, which are only beginning to connect people with their energy use. As more of the US moves to renewables, utility providers are starting to realize that people want to know how much their energy use is costing them, their communities, and their environments.
"Utilities in particular are naturally risk averse (with good reason), so adoption of cloud will be slower than in other sectors," Rhodes said.
Of course, the point of all this progress is to move past fossil fuels and non-renewable energy sources to renewable ones. Still, at least oil and gas companies are trying to move into the 21st century with tech applications that can make them more efficient.
What the future looks like
Gartner reported that by 2018, 30 percent of global utilities will use the IoT to partner with outside entities to deliver uninterrupted energy service. "Cloud will provide the fabric within which operational technology (OT) meets IoT, enabling the integration of clean energy technologies with traditional energy provisioning," Rhodes added.
However, it won't be without its challenges, especially when it comes to utility providers adapting and cooperating. And in the US, federal regulations restrict the sharing of information related to critical infrastructure, so failure to comply with these restrictions or meet cybersecurity requirements means heavy financial penalties, Rhodes said. And as always, privacy and security are concerns with cloud technology. Luckily, as we develop a smarter grid -- or microgrids -- in the US in conjunction with cloud-based technologies, these risks could lessen.
Perhaps the biggest challenge is the adoption rate of clean energy technologies. But what the cloud allows companies like Locus Energy to do really well -- and what Loflin said will be increasingly important as renewable energy is adopted by a wider range of people, businesses, and cities -- is to leverage the data and integrate it with other partners throughout the investment, installation, and maintenance processes.