How Data Will Power the Future of Energy

3 min read

Throughout history, we’ve equated energy with the consumption of natural resources such as oil, natural gas or coal.

In the coming decades we will start to think of data and software as a source of energy.

What do I mean by that? Software won’t generate electrons, but it will let us leverage the electricity we are already generating in a more efficient and productive way.

Instead of building new power plants, we will take advantage of the search engine-like analytics of software-based controls to lower emissions and reduce costs. In other words, data will enable us to use power wisely and proactively.

The situation is dire. Over 1.3 billion people around the world who are still not connected to the grid are clamoring for cheap and reliable electricity. In India, Prime Minister Narendra Modi has promised to bring at least one light bulb in every home over the next 5 years. The demand for energy will continue to grow with the rise in living standards around the world. In 1995, only 10 percent of the homes in Mexico had an AC. Now, more than 80 percent do.

Building new power plants to meet all of this new demand would be a financial nightmare and environmental catastrophe. We will need an intelligent use of data to more effectively utilize our existing infrastructure, to lower the cost and environmental impact, and use those savings to bring electricity to more people around the world.

Look at the glittering skyline when you go home tonight. Who is working late inside those well-lit offices? Probably very few people. The EPA in fact estimates that more than 30 percent of the energy used inside buildings is wasted through activities like lighting and cooling empty rooms. Sensors and software linked to intelligent building management systems can unobtrusively control power consumption, saving businesses and individuals money without them even noticing.

The extra energy is there: the U.S. wastes enough energy every year to power the U.K. for seven years. FERC, the Federal Energy Regulatory Commission, in the U.S., has estimated that the U.S. could avoid building 188 GW of power plants through dynamic peak power controls. Just like airlines use big data systems to optimize flight patterns and schedules, utilities and their customers can orchestrate a complex, multi-layered flow of electrons so that everyone benefits.

Analytics will also prevent power theft. Power theft sounds like an obscure crime, but it isn’t. The World Bank estimates that $88 billion worth of power gets pilfered annually. Electricity is actually the third most stolen commodity in the United States, outpaced only by jewelry and cars. In many parts of Brazil, India and Africa, energy theft regularly exceeds 30 percent, leading to safety hazards, blackouts and fires. Intelligent analytics can be used to cross-check consumption against monthly bills and similarly situated homes to pinpoint thieves. In Romania, right now, one utility has nearly tripled the number of power thieves it has identified with analytics.

This is not just a dream at this point. Utilities such as Oklahoma Gas & Electric and Austin Energy, have implemented programs that can curb power demand for air conditioning by 30 percent or more, without the customers even noticing a change, except for a lower monthly bill, and have avoided hundreds of megawatt of new power plant construction. Now imagine the impact if programs like these are rolled out broadly across the world. This simple idea of software controlling energy more intelligently can save more power than all the nuclear plants and hydroelectric dams of the world combined produce. And, this is only one of the many ways in which software can help.

Data doesn’t fit squarely at first glance with other forms of energy, but we have the opportunity to make it an integral element of our power system. Apart from being clean there is another big difference between data and the other resources.

It’s the only one that is growing.

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