Key questions about cloud in the power industry: Q&A with GlobalData thematic analyst

Amna Mujahid is an analyst in GlobalData’s Thematic Intelligence Team. She contributes to the analysis of technologies across various sectors, notably mining, power and packaging sectors. She takes a keen interest in themes such as cloud computing, cybersecurity, robotics, social media and supply chains.

Amna Mujahid: Power companies have many current and emerging challenges to face. It is a volatile geopolitical and economic time for all companies, but the power sector is also dealing with a prevailing energy crisis, an aging workforce and pressure to speed up the energy transition and meet the demand for a decentralised power grid.  

The pressure to speed up the energy transition is likely the biggest challenge for power companies, but one with the greatest reward. The energy transition is a major structural shift towards a cleaner energy mix in response to climate change. This transition has implications for all aspects of the energy industry.  

It involves reductions in fossil fuel use in favour of cleaner energy sources, improvements in energy efficiency and many other aspects. And now more than ever, power companies are being pushed by governments, regulators and customers to push forward on the energy transition.

Amna Mujahid: Power companies are already benefiting from the inherent advantages of the cloud (its flexibility, scalability and cost-effectiveness). This addresses much of their operational challenges, but only power companies that also embrace more innovative use of the cloud and its capacity to enable other emerging technologies will best address all their challenges.  

For example, cloud enables the masses of data collected from internet of things networks at power plants to be gathered and analysed on shared and real-time online platforms. Power companies can use the insights from these cloud-hosted platforms to monitor key assets remotely, spot any machinery faults early and extend the life of costly infrastructure.  

This will be especially useful in addressing the challenge of an aging workforce as quality of hands-on training and maintenance can still be made available despite the decline in human capital.

Amna Mujahid: Cloud computing has many use cases that stretch through all aspects of the power value chain. For example, cloud computing is essential in making equipment management efficient with data gathered, stored and displayed on shared and real-time cloud-hosted platforms.  

The cloud also enables improved customer experience offered by power companies, for example Pacific Gas and Electric's partnership with Amazon Web Servics (AWS) greatly improved the company’s customer service with cloud-based application programming interfaces reducing customer response times even during periods of high traffic.  

Another more disruptive use case of cloud computing is in tracking of energy consumption and creating flexibility in the grid as seen in EDF’s powershift platform, which moved from an Excel spreadsheet to an AWS platform allowing business customers to take control of their energy consumption, monetise any flexibility and, in turn, balance consumption and generation on the grid.  

There are many further use cases for cloud computing from facilitating the functioning of collaboration tools, to advanced data analytics and the piloting of emerging technologies.

Amna Mujahid: Companies in the power sector are well-positioned for extensive cloud adoption. The Covid-19 pandemic catalysed some of this adoption as cloud helped many power companies transition to remote operations rapidly.   

However, the biggest winners in the power sector are companies that continually evaluate their cloud usage, for example by assessing if they are using the best suited cloud environment (whether that be on-premises, hybrid, private, etc.) and those that try disruptive use cases of cloud to prepare for the future.  

The ‘Cloud Computing in Power’ report notes the key winners in the sector currently. One such company is Engie, a French multinational utility company, that has worked on several projects with public cloud providers to accelerate the energy transition through innovative means.  

For example, Engie partnered with Google Cloud to launch an AI-based optimisation platform for wind power hosted on the cloud. The pilot project used AI to predict how much wind power should be sold on which power market and at what price, providing actionable solutions to pricing on complex short-term power markets, addressing the challenges of unpredictability in wind power generation and making wind power a more reliable and competitive option.  

Contrary to this example, the biggest losers regarding cloud adoption in the power sector are companies that do not explore the potential of cloud computing to transform their operations and have a digitalisation strategy that does not pilot new and innovative cloud solutions.

Amna Mujahid: There are classic barriers to implementation of technologies, such as cloud computing, for example competing business needs and priorities. However, the key barrier for power companies in adopting cloud computing is a slowdown of digitalisation plan due to cost and gap in tech-savvy talent. This can make migration to cloud computing tricky and mean power companies miss out on compelling use cases of the technology.  

Therefore, in remedying this barrier it is essential that power companies invest in professional cloud services, such as cloud integration and managed cloud services, to fully understand their cloud computing needs and the best suited solutions.  

Power companies can harness the knowledge of cloud experts through these professional services and in turn track their cloud usage, potentially migrate to new cloud environments, or access any post-deployment support required.  

Any adoption of cloud computing by power companies can run smoothly regardless of the cloud-literacy levels of their workforce.

GlobalData, the leading provider of industry intelligence, provided the underlying data, research, and analysis used to produce this article.

GlobalData’s Thematic Intelligence uses proprietary data, research, and analysis to provide a forward-looking perspective on the key themes that will shape the future of the world’s largest industries and the organisations within them.