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Digital makeovers for power plants

Over the past five years, firms have invested an average of $330mn in digitising their power plants

Digital enhancements are increasing efficiencies for coal- and gas-fired energy generation
Digital enhancements are increasing efficiencies for coal- and gas-fired energy generation

Power plants are set to reduce global carbon emissions from power generation by up to five per cent by 2025 thanks to digital makeovers, according to a new report.


Consulting, technology and outsourcing company Capgemini’s Digital Transformation Institute finds that increased digital investments by power plant owners will create significant generation efficiency gains, driving down both operating costs and CO2 emissions


The Digital Utility Plant: Unlocking value from the digitisation of production surveyed 200 executives at director or higher level in global utility firms. It revealed that utility companies are investing in significant digital enhancements to coal and gas-fired energy generation to increase production efficiency and reduce their generation costs.


Over the past five years, firms have invested an average of $330 million in digitising their power plants. Continued investments will see one in five power plants (19 per cent) becoming ‘digital plants’ by 2025, operating with approximately 27 per cent lower costs and, together, contributing to a 4.7 per cent reduction in global carbon emissions from power generation.


The report, which surveyed utility leaders across China, France, Germany, India, Italy, Sweden, UK and US, found that individual power plants with digital technology will save $21 million each year on average. As the price of renewable energy continues to reduce, these savings will 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.


“It’s clear that digital is already transforming power generation, enabling utilities to remain competitive and significantly reducing global carbon emissions,” said Perry Stoneman, global head of the energy and utilities sector at Capgemini.


“However, the industry can go further. With many utilities yet to digitise power plants, it is possible to reduce carbon emissions even more, if these utilities invest in digital skills and technologies. Firms which choose to embrace the digital future of power production now will gain a greater competitive advantage, lower production costs and boost their brand reputation.”


The research also provides an optimistic outlook on the environmental benefits of digitising 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, digitised plants will annually produce 625 million metric tons less carbon emissions equivalent to a 4.7 per cent 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 per cent of utility organisations are currently digitally mature and just 19 per cent 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, the report highlights the need to acquire the digital maturity required to plan and manage digital power plant projects.


A ‘digital beginner’ organisation typically achieves 33 per cent less in productivity gains than a ‘digitally mature organisation’ from digitising.


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