While many countries are already taking decisive steps to try and reduce their carbon footprint, the global cost of inaction on climate change is estimated to reach US $23 trillion a year by 2020. But what more can the energy industry be doing to help bring about change?
Investment in new and emerging technologies as a way to change consumption habits has increased in recent years, however high-profile cyber-attacks are causing concern, with global business leaders holding back on their digitization strategies as a result.
In recent news, the UN Secretary General declared that the world is facing a grave climate emergency, while cities such as New York and Sydney have called for an immediate response to the climate crisis, urging residents to make necessary adjustments to help slow the pace of change. This marks a seismic shift in the way governments, businesses and communities are talking about climate – we’re now facing a very real and immediate risk to our planet.
IoT and 5G, blockchain, machine learning and AI technologies
For energy businesses, playing their part in this mobilization on climate change means delivering on a time old dilemma – supplying affordable, reliable and, most importantly, sustainable solutions to customers. To do this, the industry must be willing to invest in and bank on developing technologies such as the Internet of Things (IoT) and 5G, as well as blockchain, machine learning and AI, which are already creating significant changes in the way companies operate.
An interesting example of this change is the growth of peer-to-peer energy trading in countries such as Germany, Australia and Canada, brought about by advancements in blockchain. This specific solution allows people who have renewable energy supplies to “sell” surplus power directly to those around them. Local power generation is indeed expected to become more and more widespread, however greater connectivity and infrastructure is required in order for this to work in the long term.
The challenge? Research by Osborne Clarke has found that 74% of energy companies are reluctant to adopt new technologies because of privacy concerns and the increasing threats around data security. The recent cyber-attack on Norsk Hydro, for example, highlighted the huge economic impact incidents like this can have, with the overall cost expected to reach almost US $75 million. While the financial consequences have proven severe, the bigger issue is the impact that cyber security breaches could have on progression. Businesses are in very real danger of falling behind the curve if they don’t move with the times and embrace breaking technologies.
Ensure that digitization continues
To ensure that digitization continues, there are three important steps companies operating within the energy industry should be taking. The first is to continue raising awareness of not only the climate emergency, but the 21st century security threat. We cannot continue to look at these issues in isolation. With increased digitization across sectors, the cyber risk also becomes more acute.
To counteract these threats, governments must also look at the regulations they currently have in place and whether more work needs to be done to keep up with the advancements in technology, and safeguard against the risks that accompany them. Only by creating a level playing field between the energy and technology sectors will companies feel comfortable to continue taking long-term action to slow, and perhaps even reverse, the climate emergency.
Finally, it’s important that energy businesses change their thinking when designing and planning their next asset or solution. It’s no longer enough to just consider the immediate challenge. Instead, companies will need to remain flexible so that they are able to endure the unknown threats of the future. By futureproofing – either when retrofitting existing assets or designing news ones – businesses will ensure they are agile enough to keep pace and evolve.
To hear more on this topic, you can listen to Mathias’ recent podcast – Clean energy vs cyber-crime – as part of DNV’s new podcast series Face the Facts, which aims to share opinions and insights on the latest global news stories from the world’s leading energy experts.