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Why Digital Transformation Is Crucial for the Energy Sector

Oct 5, 2021 | Research

The energy sector continues to undergo transformations across the world. So how is digital transformation part of the greater future for energy production? If you’re looking to learn a bit more about why digital transformation is crucial for the energy sector, read our piece below.
Digital transformation for the Energy sector

Why Digital Transformation Is Crucial for the Energy Sector

What Is Digital Transformation?

Digital transformation is the term we use when the industry shifts its focus to making energy providers’ products and services more accessible and flexible for customers while also making them more efficient, secure, and environmentally friendly.

Some of the core benefits associated with digital transformation include real-time communication with customers and stakeholders, value-added services such as remote monitoring of equipment and data, increased capacity, enhanced operational efficiency, security, responsiveness, and improved customer retention.

The world’s energy sector is a significant part of the economy. With two-thirds of the world’s total GDP, it is a vital sector for economic growth and development. The energy sector’s future is digital.

Why Is It Crucial for the Energy Sector?

Digital transformation is inextricably linked to the future of the energy sector. The continued focus on developing solar power and wind farms does provide the industry a solid path forward, but the ways in which we produce and use energy, and even its effects on the environment and on society as a whole, has not changed in quite some time.

In fact, the pace of technological advancement has been accelerating over the past decade, putting pressure on the energy sector to increase efficiency and stay ahead of the competition in the increasingly competitive energy market. If the energy industry is to continue to grow and prosper, the industry must be able to adapt to this new age.

How Can Energy Production Benefit From It?

One of the key parts of your job in the energy industry is to get to know your customer. This might seem like an obvious part of your job, but understanding your customer means know what they’re trying to achieve both today and onwards into the digital future.

With a world that is increasingly digital, digital transformation in the realm of energy will help providers stay more connected to consumers. On top of this, internal operations will also improve with greater technology and outlets for speedy, frictionless communication between entities. The energy sector will also benefit from digital solutions that decentralize the reliance on a single power source and empower consumers to take a more active role in their energy usage.

The Future of the Energy Sector and Digital Transformation

What we’re seeing in the energy sector now, especially with the industry’s predicted uptick in demand due to population growth and the rise in electric cars, is the rise of the software-defined grid. This is due to the increasing need for flexibility across the energy industry. This need is being driven by energy storage systems (ESBs) and software-defined appliances, which are being introduced as part of broader energy management systems.

Software-defined appliances can help utilities manage distributed energy resources (DER) and could potentially have a major impact on the ability of the energy sector to mitigate losses and other economic inefficiencies. When we talk about digital transformation and how it applies to the energy sector, one of the things that we focus on is that the overall impact is going to be very powerful for those who are thinking about it. Looking forward, we don’t anticipate that’s going to change.

There are a couple of big reasons why. One of which is in terms of the necessity of both the business and the user. We are seeing companies that are not doing enough for their customers, in terms of the need to stay up-to-date on any kind of energy products and services that they’re providing. This is where a combined, forward-thinking business model becomes critical. Energy companies can’t be successful if they’re not serving the needs of both their customers and of themselves.

The world of energy solutions and digital transformation are quickly joining forces in the modern world. We hope our guide has helped to prepare you for this. Contact Saab RDS today for help with all of your energy and technology needs.