Kongsberg Digital: Why digitalization should be a driver for energy investments
Published 28 October 2022
In an industry under pressure to meet net-zero ambitions whilst satisfying the investor community’s ROI requirements, strategic solutions such as digital twins and simulation can when applied appropriately, address the challenge of the energy transition and its affordability.
The global energy landscape is increasingly complex. With a heightened focus on supply certainty and the impact of the geopolitical environment, industry players must now increasingly balance strategic priorities along the energy value chain, including:
– Energy security and reliability
– Higher investment risk profiles
– Profitability during times of volatility
Energy Security & Reliability
Higher Investment Risk Profiles
Profitability During Times of Volatility
This is an environment where geopolitical tensions are rife and decarbonization efforts requiring large capital requirements are raising concerns about the viability of new energy projects, as well as the affordability of a near-net-zero economy.
Investor responses to risks in the utilities and O&G sectors indicate that affordability is the energy transition’s number one concern. Additional concerns include:
- Difficulty in maintaining appropriate CAPEX levels
- Emerging industry regulations
- Climate urgency
- Challenge of labor shortages in O&G (43% of current energy workers want to leave the industry within the next five years)
With these concerns in mind, how can investors together with operators determine a sustainable model that delivers on return expectations in both the short and long term?
The industry has seen some major shifts recently that indicate fundamental changes in the way things work today. Without digitalization, it would be almost impossible for operators to lower carbon emissions at scale whilst improving ESG and at the same time contributing to increased output levels to assure energy certainty. This squeeze presents problems when investors and financiers strategize to allocate capital: the new requirements for measuring climate risks and changing market conditions need to be factored into capital planning processes.
Digitalization as a Driver for Energy Investments
Digitalization is a key measure that allows operators to future-proof their asset portfolios by delivering the combination of efficiency, speed, and reliability required by investors and operators to thrive during the energy transition.
There is no one-size-fits-all approach to the energy transition, but digitalization is a flexible and robust pathway that can be developed in tandem with corporate, policy, and financial priorities in flux.
O&G companies are continually repositioning for short-term energy reliability priorities, and here digitalization in the form of digital twins provides an in-depth understanding of optimization measures that can lower risk, costs, and emissions. It introduces more autonomous ways of working for higher returns by supporting workers to reskill, grow into new roles, and engage in immersive training on-site or remotely – thereby allowing operators to scale down the workforce, mitigate the imminent risk of labor shortages, and streamline operating expenses.
Impact of Digitalization
A digital twin can facilitate a cumulative effect of optimization for the entire value chain, even under changing market conditions. In fact, major integrated energy operators worldwide have used a digital twin solution as an enabler of digitalization across their operations with impressive results*:
- 5-30% increase in productivity by simplifying collaboration, enabling remote operations, and leveraging more autonomous workflows
- >20% reduction in greenhouse gas emissions through CO2 emissions tracking and reporting features like the Emissions Dashboard and facility modeling that provides carbon emissions transparency
- Decision-making backed by performance metrics that help measure the projected profitability of assets against the required costs of capital for new and existing investments
- Up to 85% reduction of manual work for processes like energy nomination by using Machine Learning to predict the energy consumption of various operating scenarios
- Release of 5-7% per annum in cost avoidance through Proactive Technical Monitoring of equipment conditions and behaviors
*Statistics provided by Kongsberg Digital's twin solution Kognitwin
Digital twins are consistently demonstrating how true digitalization can instill confidence for pragmatic growth that justifies renewed capital investments in O&G, help unlock safer operations, and move towards greener operations across the energy industry by embedding ESG measures into operations. As investors continue to search for a strategy that secures future energy needs in line with long-term net-zero ambitions that also account for risk factors in the valuation of portfolios, digital twins are beckoning.
Meet Kongsberg Digital at Upcoming Energy Council Events
Shane McArdle, CEO, Kongsberg Digital @ WECA, London, 28 – 29 November
Before being named as CEO in September 2022, Shane was the SVP of Kongsberg Digital's Energy division. Combining deep domain knowledge and broad business background, he is a trusted advisor to companies in the oil and gas, energy, and maritime sectors that are ready to drive Digital Transformation by adopting new technologies and services that provide a digital roadmap to move the industry forward.
Haavard Oestensen, VP of Growth @ NorthAm, London, 2 – 3 November 2022
Haavard Oestensen is responsible for the company's commercial strategy execution globally. He has more than 17 years of experience in the integrated gas, LNG, and upstream industry, combined with experience in commercial management, systems integration, and energy industry software. Haavard is currently based in Houston.
Brian Carey, Strategic Growth Director @ WECA, London, 28 – 29 November
Brian leads Kongsberg Digital's Investment, Innovation Partnership, and Net Zero strategies. He holds a Bachelors in Electrical Engineering and a Masters in Sustainable Energy, with a background in business strategy, finance, projects and engineering. Brian is currently based in Europe and has previously worked on projects in Asia and the Middle East.
Kognitwin as an enabler of digitalization
Kongsberg Digital’s digital twin solution Kognitwin ® is the result of rich domain knowledge, digital expertise, and technical excellence united in a single user-centric solution. It’s a work surface that brings together a facility’s documents, data, and workflows in a single environment online complete with 3D visualization and the ability to execute ‘what if’ modeling and simulations. Whether brownfields or greenfields, Kognitwin can handle data with varying maturity levels and make this available in a visual way that helps everyone from stakeholders right down to end-users analyze, understand, and manage their tasks to work smarter, safer, and greener.
Talk to an expert to learn more about how a digital twin can help enable the energy transition for investors, operators, and everyone else. Get in touch: Kongsberg Digital – Operate your assets smarter, safer, and greener.
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