Energy Management with IoT

By: Julia Nasy
20 Feb. 2023
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Energy IoT is changing the landscape of the global market. This constantly evolving technology has already demonstrated the power of connected devices and wireless connectivity. The Internet of things is the basis of strategic changes aimed at efficiency, the introduction of effective solutions, and the invention of new models of the digital energy market. Investors worldwide are increasingly interested in smart energy, commending its benefits.

IoT applications are widely used in the energy industry. Many truly revolutionary projects enable companies with smarter distribution decisions and help electricity consumers conserve energy and save money. Additionally, IoT adoption increases the use of renewable energy resources and positively affects the environment and climate change. At last, the successful implementation of the idea of building future sustainable energy systems is impossible without the Internet of things.

This article will briefly introduce the smart energy phenomenon, the market’s current status, and popular apps. It also includes an analysis of significant advantages and some challenges businesses may face when applying IoT. Let’s look at the exact smart energy solutions slowly and steadily taking the world.

Benefits of IoT Energy Management

Energy management systems driven by IoT go way ahead of traditional ones. Sector transformation with the Internet of things provides innovative solutions to evolve through the possible issues. Here are the top advantages of IoT for energy.

Smart Energy Automation

Technology adoption automates manual processes reducing the number of required man-hours. Systems, consisting of IoT sensors network, automate time-consuming tasks such as meter readings or power generation and distribution. They help minimize human intervention and ensure accurate readings.

Cost Efficiency

Processed data from IoT devices provide valuable insights to utilities to make business decisions. Due to this, companies can balance the supply based on the demands of energy consumers. Additionally, they get the opportunity to cut down on the wastage of electricity, lower their input costs and save considerable funds.

Higher Sustainability of Energy IoT

IoT adoption in the sector has made the possible building of smart technology, which contributes to higher environmental sustainability by optimizing conventional power sources usage, reusing materials, and recycling. As a result, it promotes a reduction in waste and carbon emissions. Sustainable solutions include smart homes, smart agriculture, smart cities, etc.

Advanced Analytics

The energy sector is gradually moving to sensor-based functioning. And companies reap the maximum benefit of using advanced analytics. Sensor-enabled data from smart devices and further processing improve energy efficiency, help forecast accurately and create prediction models, and lead to resource optimization and better productivity.

IoT Uses Cases in the Energy Sector

IoT applications for smart energy management systems have elaborated the way industry operates. Today the Internet of things is included in basic sector activities that electricity consumers can’t do without. Below are the top examples of IoT usage by global energy providers.

Smart Grids

Current grid infrastructure is slowly becoming obsolete. It is not able to cope with rising power consumption. In addition, costs are constantly rising, equipment is getting older fast, and market competition is intensifying. All these forces companies to transform to a more reliable and efficient electric grid. Smart grid technology integration is crucial to achieving a safe, sustainable future. And IoT, as one of the major factors underlying technological and infrastructural components of smart grids, contributes to their development.

A smart grid itself is an electrical network that includes a variety of infrastructure, hardware, and software solutions. Its difference from the typical grid lies in the fact that it involves many two-way flows. These interactions occur between all the participants and system elements, allowing a diversity of energy control and movement scenarios. This is a self-contained distributed system that generates energy from different sources, in particular renewables and storage.

Grid modernization provides multiple benefits for the energy sector, such as improved regulatory compliance and managed demand. Let’s look in detail at three of them.

  • First, smart grids enable companies to cut maintenance costs. With IoT-enabled features, they can distribute electricity most efficiently, meeting the highest demand. Thus it is possible to minimize transmission costs and optimize every component.
  • Another big advantage of the smart grid system is a renewable capacity increase. Public utilities, using IoT technology, can incorporate more onshore and offshore renewable energy sources into the energy mix. And stable electricity supply solves such problems as disruptions.
  • Finally, smart grids allow the creation of more customized and competitive offerings. All this was made possible by data analytics. Relevant information provides an accurate picture of customers’ usage patterns, which can be used as a base for new and advanced services.

Smart Metering Systems

Smart meter technology adoption is one of the key steps on the way to making energy consumption more efficient and the energy sector more transparent in terms of its functioning. These systems help to track, control, and predict electricity, water, and gas consumption. Energy data collected from smart meters is the basis of appropriate and efficient decision-making. Using detailed reports of energy consumption patterns, utility providers can optimize distribution, reveal peak times and usage trends, reduce power outages and avoid other undesirable outcomes.

Smart metering applications and remote control allow the detection and elimination of disruptions. So this is a way that the balance of electric loads can be reached. In addition, IoT-based energy consumption management increases customer trust. Smart meters allow energy companies to develop demand management strategies to meet specific customer needs and keep water and energy usage at the optimal level.

Efficient smart meters are durable and consume little energy, making them attractive to companies looking for solutions to widen the scope of their services without additional costs. Moreover, in the course of IoT technologies development, they adapt easily. And power utilities can do without redesign and focus on meeting customers’ and market needs.

Renewable Energy Sources

Today we are witnessing a massive transition to renewable energies. The development of alternative sources speeds up due to the rising threat of climate change. Now, countries, cities, and businesses are in a hurry to switch to endlessly renewable and nonpolluting sources. And the use of IoT systems in renewable production helps meet demands efficiently.

Wind Energy. Wind power is the fastest-growing alternative solution without pollution, emissions, and energy footprint. Construction of offshore and onshore wind farms has boomed on a global level. And farms’ maintenance is difficult, as one wind park can include between five to several hundred turbines located in hard-to-reach places out at sea, field, or mountainous relief. And such solutions as sensors, drones, and IoT gateway systems help turbines operate more efficiently, optimizing performance and better-predicting maintenance needs.

Solar Energy. The Internet of things has transformed the solar industry. IoT solutions help optimize how solar energy farms are built, maintained, and monitored, allowing the market to grow rapidly. Solar panels became more attractive in residential, commercial, and government implementations with the technology. Energy monitoring is an essential application among the many potential IoT use cases. Sensor devices gather data about energy generation, use, and storage. Connected asset tracking systems enable real-time monitoring of failures and checking sunlight-intensity data.

Geothermal Energy. Although geothermal power plants account for only 1% of global electricity production, this is an essential energy source in some countries. For example, about 85% of all houses in Iceland are heated with geothermal energy. IoT and artificial intelligence help improve the energy efficiency of geothermal plants worldwide, making their performance more visible, measurable, and cost-effective. Advanced analytics by the IoT system enables managers to make better decisions on maintenance, maximize power generation efficiency, and thereby ensure a stable supply.

Smart Microgrids

This article has already discussed smart grids as a breakthrough energy solution. But smart microgrid energy technology is becoming more popular in recent times. And the main difference between the first and second terms is scale. Microgrids are small local systems that can disconnect and operate independently. They handle power supply for small areas and work on island or grid modes.

Self-sufficient microgrids can serve as a backup grid in case of repairs or emergencies, leading to outages. They can also be used for just one user, commercial properties, or even military facilities. Furthermore, microgrids can operate in various modes depending on the scale and conditions, ensuring seamless and less harmful to the environment energy flow.

Challenges of Implementing IoT in the Energy Industry

Although IoT adoption in the energy sector provides various benefits, it is not without possible challenges.


First, IoT architecture requires a complex design. Energy systems themselves are composite and unique, as they have subsystems with various sensors and data communication technologies. That is why custom design is preferable to fit systems’ distinct characteristics and regulatory standards. But such development is more expensive than a one-size-fits-all design.


Expenses are the next big challenge of IoT for energy. Unfortunately, not all companies, cities, or countries have sufficient funding required for energy optimization. High initial investment costs force businesses to use outdated infrastructure incompatible with modern IoT technology.


One more significant issue of smart energy systems is connectivity. This is a critical element for any IoT solution, as the connectivity scheme is a channel through which all physical devices are interconnected and can communicate with the cloud platform. But the remote location of turbine farms, solar panels, or transmission lines requires a connectivity scheme corresponding to a specific range, bandwidth, and energy consumption. Cellular or Wi-Fi can be enough for regions with sufficient network coverage, but IoT energy management in remote power plants may need satellite communication.

Data Security

Energy data is a vulnerable target for hackers. And as IoT technology requires data collection and storage, any leaks may destroy companies’ reputations. So, in addition to software development, businesses need to invest in effective security methods. Vulnerable points may include default passwords, unsafe communication channels, or unsecured personal information. Companies must adopt encryption schemes, distributed control systems, and strong authentication protocols to prevent cyber-attacks.

Wrapping It Up

IoT in the energy sector presents a new reality benefitting businesses, utilities, and consumers. With the growth of energy usage and its significant environmental impact, companies are looking for an alternative to expensive and polluting energy resources. The Internet of things offers different scale opportunities for our sustainable future.

And today, we see massive IoT adoption for solving the most pressing challenges in energy. In addition to optimization, automation, and enhanced management, the technology offers such solutions as predictive protocols for improved disaster preparedness. An IoT-based system, using machine learning, collect and process energy use data to forecast potential disasters and create proper responses.

IoT in the energy sector is heading in the right direction. And we’ll see a lot of new effective applications in the following years.

By: Julia Nasy
20 Feb. 2023
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