When talking about the advantages offered by the cloud, expressions such as efficiency, flexibility, leverage innovation, and cost control may appear. According to IDC, the adoption of cloud strategies will experience a compound annual growth rate of 21.9% until 2025. Evidently, the energy sector is relying on the digital transition for its development and activity, adopting cloud services as part of the necessary change in the paradigms of energy production, distribution, and consumption in favor of sustainability.
One of the most widely associated benefits of moving to the cloud is measured in purely economic terms. By migrating one’s own server infrastructure to the cloud, cost savings can be achieved by eliminating the hardware procurement and maintenance factor. In addition, migration can also positively affect agility throughout the value chain by enabling automation in production cycles, which in turn leads to efficiency gains.
Among the most interesting examples of this model in the energy sector, it would be interesting to talk about Repsol’s case. The company has managed to save more than €800 million per year thanks to the implementation of digital initiatives, including the transition of more than 2,500 of its servers to the cloud.
Digital Transition Engine
However, while this is an important factor, economic advantages are not the most important. The cloud is also the driving mechanism for all desired digital transitions. Its scalability and flexibility allow for increased business resilience, which is particularly important in the current high-inflation socio-economic context. At this time, this flexibility can help other energy companies in the search and evaluation of new resources as well as having the ability to increase or decrease their capacity according to current customer needs.
Furthermore, it is important to point out investment in research and development of new technologies and processes to improve productivity and sustainability plays an important part when it comes to creating value for energy companies. Cloud services open the door to new technologies and areas of innovation. This could be the case with General Electric. The USA giant, starting with its migration to the Amazon Web Services cloud in 2017, has developed and implemented different technologies to increase its own digital capabilities in the way to satisfy the demand for low-carbon electricity emissions.
The migration to the cloud increased five times the company’s service deployment, setting a pace in line with customer needs and the industry growth,” said Brian Case, CDO of General Electric.
Efficiency and Sustainability
Sustainability and energy efficiency are also key in the energy production process and the cloud plays in favor of achieving these goals. A great example is the current trend in the process of refining or transforming energy resources into final products. The case of oil is paradigmatic: until now, traditional refining was a costly and unsustainable process; in fact, One Earth magazine’s 2021 global inventory revealed that CO2 emissions in oil refineries amounted to 1.3 gigatons during 2018, a consumption that could be twelve times higher by 2030.
Currently, there is a trend involving both the cloud and the use of artificial intelligence: the transformation of refineries into multi-energy hubs. This brings two main advantages. On one hand, the ability to transform resources and generate the final product with a very low CO2 footprint, and on the other hand, thanks to the reuse of waste, there is also a boost to the circular economy. In this quest to reduce CO2 emissions and increase energy efficiency, it is also worth noting the impact of the cloud on the conveyance and final sale of products. Today, according to data from the Spanish Ministry of Transport, Mobility, and Urban Agenda, freight transport is responsible for 23% of total carbon emissions in our country. Undoubtedly, the energy transition is also digital, and this implies the radical transformation of the logistics model.
Moreover, according to The Future of Trucks by the International Energy Agency (IEA), the application of solutions such as communication between vehicles and power plants or feedback monitoring can reduce the energy used by 20% to 25%.
In addition, everything related to distribution and marketing is a very competitive arena, and going for sustainable energy is always an advantage over third parties.
Lastly, we cannot forget to mention the improvement offered by the cloud – compared to traditional in-house systems – with respect to everything related to the security and privacy of hosted data. It is true that the use of cloud infrastructures requires specific security tools and models, different from traditional ones, but the current range of providers offers adequate protection against vulnerabilities and guarantees the privacy of sensitive data and an adequate level of compliance. On top of that, their distributed model provides an additional degree of resilience against disasters to ensure business continuity.
The challenge of the sector’s energetic transition, recognized as the structural evolution of the energy system, has found a great ally in digital transformation. But this relationship is also reciprocal. In fact, since 2019, the European institutions have been talking about the twin or hybrid transition, and the need to promote the two processes in conjunction in order to achieve the objectives, in terms of climate neutrality, proposed for 2050 in the European Green Pact.
The evolution towards digitalization and cloud models, next to the use of artificial intelligence, is the key that will open the door to the development of a more sustainable, resilient, and environmentally friendly future, especially in today’s complex socio-economic environment.