One in five power plants to become digitalised by 2025

Posted on 19 Sep 2017 by Jonny Williamson

Increased digital investments by power plant owners are expected to create significant generation efficiency gains, driving down both operating costs and CO2 emissions.

Power Station Chimney Power Plant Gas Industrial Energy Environment Electricity Atmosphere Steam Fuel Power Generation – image courtesy of Pixabay.
Power plants with digital technology will see 27% lower production costs, with individual plants saving £15.6m ($21m) each year on average – image courtesy of Pixabay.

Over the past five years, coal and gas-fired energy businesses have invested an average of $330m in digitalising their power plants.

Continued investments could see almost one in five (19%) become digital plants by 2025, operating with approximately 27% lower costs and together, contributing to a 4.7% reduction in global carbon emissions from power generation.

The figures have been published by Capgemini following a study of 200 executives at director or higher level in global utility firms.

The study, which surveyed utility leaders across China, France, Germany, India, Italy, Sweden, UK and US found the increased production efficiency achieved from digitalisation will enable utilities to bring down energy generation costs.

Power plants with digital technology will see 27% lower production costs, with individual plants saving £15.6m ($21m) each year on average. As the price of renewable energy continues to reduce, these savings could enable organisations with gas and coal-fired plants to remain competitive.

With global electricity demand increasing year-on-year and ambitious global carbon reduction targets to meet, these digital investments will ensure that traditional power plants can continue to contribute to an energy ecosystem increasingly shifting towards renewable energy sources, noted Capgemini.

The research also provides an optimistic outlook on the environmental benefits of digitalising power plants. Utilities expect that digital investments will enable them to increase the energy produced from fossil fuels with a resultant decrease in carbon emissions.

By 2025, digitalised plants will annually produce 625 million metric tons less carbon emissions – equivalent to a 4.7% reduction in global emissions from power plants, 28.6 billion more trees or 133 million less passenger vehicles on the planet.

Despite the huge potential gains from deploying digital plants only 8% of utility organisations are currently digitally mature and just 19% of power plants are expected to be digital within five years. 

If more utilities were to prioritise digital investments then the benefits to the industry and climate could be much greater. However, businesses need to acquire the digital maturity required to plan and manage digital power plant projects.

For example, a ‘digital beginner’ organisation typically achieves 33% less in productivity gains from digitalising operations than one classed as ‘digitally mature’.