In a previous post, Digital Footprint, I mentioned the increasing number of connected devices used by society today, including ones that are not as immediately obvious - like "smart" meters, "smart" TVs, "smart" watches. These sorts of devices form part of the Internet of Things (IoT). The IoT is the growing body of devices connected to computer networks. These can range from vehicles on our roads to tiny sensors in a water company's pipe network (if you're interested in the IoT and want to learn more about the different applications, check out Meola, 2015 and the two reports I use in the next paragraph for accessible introductions).
They allow for the gathering and communication of data and a host of uses. Some of them are already finding their ways into our homes (the Nest thermostat is a good example), but there is considerable growth forecast in these devices, as increasingly more appliances are connected to networks. The IoT has been identified as a major market for the future. Even conservative estimates place the economic impact of IoT at $3.9tn (2015 USD) by 2025 (McKinsey, 2015 - download full report, see Figure 1). An industry report identified several industries that are benefiting from the IoT, including 'manufacturing, mining, agriculture, oil and gas, and utilities' (Accenture, 2015 - download full report), which will therefore see growth in the IoT with a large drive coming from the commercial sector.
Reports and research have consistently pointed towards efficiencies derived from the IoT that can drive energy and resource consumption down. Industry is a good and well researched example of this. Currently, industry accounts for one-third of global energy use and 40% of CO2 emissions (Brown et al., 2012). Improvements in industry practises and operational efficiency could therefore seriously reduce carbon dioxide emissions. Bunse et al. (2011) identify energy efficiency as the key short-term tactic in the wider strategy of reducing greenhouse gas emissions. Citing research by the SPRU and Swedish case studies, Bunse et al. (ibid.) state that a major barrier to energy efficiency improvements has been the relatively low priority given to energy management. This has been enabled by the lack of sub-metering in industry (Shrouf and Miragliotta, 2015), and so granular energy consumption data is not gathered. Thus, improvements to energy efficiency go beyond just improvements to specific processes of production, and begin to incorporate availability of data and management approaches (Weinert et al., 2011).
In recent years there has been an increasing focus placed on energy efficiency. This has been driven by energy costs and their unpredictability; emissions-related regulations; and changing customer preferences towards "green products" (BCG, 2009). Real-time data provided by the IoT allows an awareness of energy consumption (Haller et al., 2009). New connected devices therefore offer the opportunity to integrate energy use-awareness into industrial processes (Shrouf and Miragliotta, 2015; McKinsey, 2015), driving behavioural, cultural and value change. Figure 2 shows an effective framework for introducing IoT-enabled data into the decision-making process.
However, whilst the IoT has been identified as a source of energy efficiency innovation, Bunse et al.'s (2011) gap analysis between industry and the literature highlights the need for better, more practical frameworks to introduce more effective energy management. With the IoT rapidly developing, and framework suggestions being developed (Shrouf and Miragliotta, 2015), there is promise in the delivery of decreases in energy consumption. Whether that can be sustained even when the cost savings are not immediate and substantive will depend largely on policy and public pressure.
The IoT and its advances are not just isolated to industry. The next post will therefore explore other areas where the IoT may affect energy consumption.
They allow for the gathering and communication of data and a host of uses. Some of them are already finding their ways into our homes (the Nest thermostat is a good example), but there is considerable growth forecast in these devices, as increasingly more appliances are connected to networks. The IoT has been identified as a major market for the future. Even conservative estimates place the economic impact of IoT at $3.9tn (2015 USD) by 2025 (McKinsey, 2015 - download full report, see Figure 1). An industry report identified several industries that are benefiting from the IoT, including 'manufacturing, mining, agriculture, oil and gas, and utilities' (Accenture, 2015 - download full report), which will therefore see growth in the IoT with a large drive coming from the commercial sector.
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| Fig 1 Potential economic impact of IoT by 2025 |
Reports and research have consistently pointed towards efficiencies derived from the IoT that can drive energy and resource consumption down. Industry is a good and well researched example of this. Currently, industry accounts for one-third of global energy use and 40% of CO2 emissions (Brown et al., 2012). Improvements in industry practises and operational efficiency could therefore seriously reduce carbon dioxide emissions. Bunse et al. (2011) identify energy efficiency as the key short-term tactic in the wider strategy of reducing greenhouse gas emissions. Citing research by the SPRU and Swedish case studies, Bunse et al. (ibid.) state that a major barrier to energy efficiency improvements has been the relatively low priority given to energy management. This has been enabled by the lack of sub-metering in industry (Shrouf and Miragliotta, 2015), and so granular energy consumption data is not gathered. Thus, improvements to energy efficiency go beyond just improvements to specific processes of production, and begin to incorporate availability of data and management approaches (Weinert et al., 2011).
In recent years there has been an increasing focus placed on energy efficiency. This has been driven by energy costs and their unpredictability; emissions-related regulations; and changing customer preferences towards "green products" (BCG, 2009). Real-time data provided by the IoT allows an awareness of energy consumption (Haller et al., 2009). New connected devices therefore offer the opportunity to integrate energy use-awareness into industrial processes (Shrouf and Miragliotta, 2015; McKinsey, 2015), driving behavioural, cultural and value change. Figure 2 shows an effective framework for introducing IoT-enabled data into the decision-making process.
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| Fig 2 Framework for IoT-based energy data integration in Production Management decisions |
However, whilst the IoT has been identified as a source of energy efficiency innovation, Bunse et al.'s (2011) gap analysis between industry and the literature highlights the need for better, more practical frameworks to introduce more effective energy management. With the IoT rapidly developing, and framework suggestions being developed (Shrouf and Miragliotta, 2015), there is promise in the delivery of decreases in energy consumption. Whether that can be sustained even when the cost savings are not immediate and substantive will depend largely on policy and public pressure.
The IoT and its advances are not just isolated to industry. The next post will therefore explore other areas where the IoT may affect energy consumption.
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