Have you ever been shocked by the amount of your utility bill?  It could be a function of the high cost of power during peak usage times.  This is because traditional power plants are notoriously slow in responding to demand changes. But that is starting to change. The Internet of Things is helping power plants respond quickly to demand changes.

According to GE, giving a power plant up-to-the-second information about demand on the grid and instructions on how to meet anticipated demand would add $50 million to the value of its output over its 25-to-30-year life. Equipping a new generating plant with this capability from the outset would add $230 million to its lifetime valued compared to the preceding generation.[1]

The Boston Consulting Group is predicting a fourfold increase in IoT spending in the power and transport sectors from 2015 to 2020, driven by the increasing digitalization and complexity of infrastructure, the need to reduce costs, and more stringent environmental regulations.



Power generation is becoming increasingly dependent on the complex interaction and integration of different technologies such as natural gas and wind power installations, or floating solar panels deployed on hydropower reservoirs. A great example of this is on King Island, Australia.

King Island, population 2000, lies off the coast of Australia, over 100km from the mainland. It has no connection to the nation’s grid and for many years relied on costly diesel generators for its electricity.

That is until power company Hydro Tasmania built an integrated solar, wind, battery, flywheel and diesel system that is supplying 65 percent of the island’s electricity from renewable sources, reducing diesel consumption from 4.5 million liters per year to 2.6 million, and greatly reducing CO2 emissions.

It’s a great example of the metamorphosis of global energy systems enabled by IoT. Monolithic grids delivering predictable energy supply from large fossil fuel powered generators is being replaced by more fragmented infrastructure producing power from intermittent and unreliable weather-dependent renewable sources.

This makes management of demand and supply more challenging, and more important. IoT is a key enabler of manageability and unlocking the value of the data that energy networks generate.

IoT can also help improve the balance between demand and supply by providing more accurate data on usage peaks and troughs, empowering suppliers to manage generation and distribution more proactively.



In Nigeria, Shell faced the challenge of monitoring oil wells and pipelines across a large and remote part of the Niger Delta. It spent $87,000 installing sensors to measure pipeline pressure, temperature and flow, and communicate this wirelessly to a central location. Before that, data was collected manually.

The company estimates it saved almost $1 million in the system’s first year of operation, with the added benefit of continuous monitoring and more data is being captured to be analysed for improving efficiency.[2]

The infrastructure required for electricity, oil and gas production and distribution is highly complex, vital to society, and often in hard-to-reach places.  Add growing security threats and the advantages of automated asset monitoring, efficiency optimization and security management through IoT become obvious.

IoT offers the promise of complete visibility and control over assets, operations and the associated status, performance and risk indicators.

The collection and analysis of data from sensor-enabled machinery and other ‘things’ can boost oil extraction through: drilling site identification and viability analysis; predictive maintenance for wells, pipelines, rigs, etc.; and smart surveillance of pipelines and refineries.



According to US company Hi-G-Tek, theft of fuel from road tankers cost the US fuel distribution industry $8 billion in 2008.[3] In Australia, tanker drivers for one gas station operator, Caltex, were caught siphoning fuel from tanks and selling to a rival gas station operator at heavily discounted rates in a million dollar scam.[4]

To combat this fuel theft, Hi-G-Tek has developed sensor-based technology that enables road tanker operators to monitor the opening and closing of valves, hatches and other control points on the truck and determine exactly when, where and how much fuel is discharged.

Road tankers delivering petroleum fuels are essential to keep the economy and society running, so keeping them full is a critical function.  Also critical is getting fuel to gas stations before they run dry.

Gas stations run out of different fuel products at different times which makes it challenging to plan the optimal route to enable tankers carrying different fuels to deliver the right fuel to the right gas station at the right time. By equipping tankers with GPS and sensors on each fuel compartment, delivery routes can be optimized.

IoT will have a huge impact on transport efficiency, not just with road tankers but through the digitalization of private vehicles and the enhancement of logistics. As trucks, vans and cars become ‘devices on wheels’, the opportunities to make them run at maximum efficiency will increase significantly – particularly if they are driverless.

Software can regulate vehicle operation far more accurately than a human, making adjustments in real-time based on information from sensors in other vehicles, roads, parking spaces, weather stations etc.

Software enables vehicles to take the most energy efficient route and avoid accidents and dangerous conditions. Fuel consumption and pollution will be reduced, journeys will be faster and deaths and injuries fewer.



We have discussed a few of the ways IoT is transforming energy production, distribution and consumption.  They are part of what research firm Navigant Consulting believes is an ‘Energy Cloud’ that will “usher in widespread disruptive changes in the way energy is produced and consumed globally.” [5]

This transformation, it says, will entail a shift away from a one-way power system to “a dynamic energy ecosystem that leverages ubiquitous connectivity, intelligent sensors and devices, information and operations technology, and data-driven machine-learning functionality across the grid value chain.”

Hopefully we will see the results of this in our energy bills soon.



[1] GE: IoT Makes Power Plants $50M More Valuable$50m-more-valuable/d/d-id/1322390

[2] Pumping profits: Shell saves $1M with IoT


[4] Transportation industry suffering from fuel theft turns to TomTom Telematics

[5] Navigant Consulting white paper: Navigating the Energy Transformation