Cloud Benefits in the Energy and Utility Industry

A report issued in June 2011 by the Carbon Disclosure Project and supported by AT&T discovered that companies which embrace cloud computing technologies can reduce energy consumption, lower their carbon emissions, and decrease their capital expenditure on IT resources while improving operational efficiency. By 2020, the same group estimates that large US companies using cloud can achieve annual energy savings of $12.3 billion and annual carbon reductions equivalent to 200 million barrels of oil.

In addition to environmental benefits, the energy industry is fostered to adopt the technology in order to reduce costs, enhance efficiency, and help address growing oil and power needs, such as increasing amounts of data, real time access to data, or integration and standardization of IT operations.

Cloud computing offerings are used today by major energy companies. Accenture’s “Six questions every executive in the energy should ask about cloud computing” includes practical examples of how energy companies adopted cloud computing to support and enable new services. The multinational oil and gas corporation ExxonMobil Upstream Services built a cloud-based infrastructure service with IceWeb to deliver geo-imagery to land exploration workers, irrespective of their location, while Atmos Energy Corporation, the American distributor of natural gas, deployed Salesforce.com to assimilate acquired utility assets and consolidate operations spread across six business units.

A representative example of cloud’s benefits is Digital Oilfields, which developed a cloud-based infrastructure to remotely deliver services to their customers. It is pretty clear that the storing location of applications and data is now less important than how the data is used. Cloud computing can connect oil teams from around the world, enabling them to share information instantly and expedite the development process.

Considering the studies’ predictions, I believe the new cloud business model for the energy industry enables energy exploration and production through evolved next generation applications and decision support tools, while IT concerns become a utility which can be used according to one’s needs without the burdensome of ownership.

The benefits of adopting cloud in the utility and energy industry don’t differ too much. Besides cost, flexibility, and speed, which translates into more agile and responsive services, the main benefit for the utility industry is the global entry of smart grid and advanced metering infrastructure into utility operating models. You can find more information on this topic in Accenture’s insight on “Six questions that a utility executive should ask about cloud computing”.

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