IDC and the Environment
From Lauraibm
MI Summary
Papers
- Sun Servers and PG and E: The Value of Being Green (Aug-06)
- HP Fine Tunes its Strategy Around Green Computing and Energy Efficiency (Apr-07)
- Big Blue Focuses Attention on "Big Green" (11-May-07)
- Sustainability: Using IT to Support and Benefit from Going Green (Jun-07)
Energy Insights: Top 10 Predictions for the Energy Industry in 2007
1. Focus on climate change will spawn investment in energy and information technologies
Drivers
- Climate-friendly energy policies and market response puts upward pressure on energy commodity prices
- GHG and emissions trading gain ground and move to North America —voluntary and mandatory
- Prospects of climate change bring renewed attention to Health, Safety, and Environment (HSE) area
Global Surface Temperature
Predictions
- Policymakers will accelerate adoption of no-and low-greenhouse gas technologies, including more expensive renewable and nuclear generation
- Equity and venture investors will continue to scour for opportunities in climate-friendly energy technologies, but too much money will be seeking too few near-term profitable activities
- Emissions trading will become more active, with companies investing in technology to accommodate trading; generators and refineries will work on optimization technology that accommodates emissions trading
- Companies will invest in information technology, including monitoring, reporting and safety control systems, to meet HSE requirements and to prevent negative impacts
2. Venture capital investment in energy sector will continue to expand Predictions
Drivers
- VC investment through Q3 of 2006 is already 3x all of 2005
- Leading VCs from other sectors starting to make significant investments in “cleantech”
- Sector is now third-largest VC investment category (after biotech and software)
- Growing concern about a “bubble,” but long-term market drivers and fundamentals appear strong
- National, state, and global policies driving investor confidence; pension funds also making large investments Drivers.
Predictions
- VC funding curve will flatten somewhat, but continue to grow over next 2–3 years
- An increasing share of total North American VC investments will be targeted at “cleantech” opportunities, approaching 10% by 2009
- VC money will flow to “less crowded” sectors: energy efficiency,non-silicon solar, energy storage, sensors and controls, advanced applications, and specialized E&P technologies —as well as related areas such as advanced materials and nanotechnology.
3.Geological, technical, and economic factors will drive innovation in reserves management
Drivers
- Increasingly difficult to find new conventional reserves and to quantify heavy oil and unconventional gas reserves
- Regional peaking of mature fields due to techno-economic viability constraints surrounding lifting operations
- Tightening down on reserves reporting by government and analysts in light of elevated stock valuations and energy prices
Predictions
- Expect to see large capital investments (including IT) in deep sea, heavy oil, and unconventional gas exploration on a global scale
- Companies will also invest in intelligent completion technology (e.g., Shell/Halliburton WellDynamicsjoint venture) and CO2sequestration and injection technology to maximize long-term reservoir recoverability
- Increased accuracy and transparency of reserves estimation and reporting will be enabled by improved workflows that connect the dots from reserves to production to source geological, seismic, and petrophysicaldata
4. Change to daylight savings time in the U.S. will disrupt business as usual
Drivers
- Daylight savings time will begin 3 weeks earlier (Mar. vs. Apr.) and end 1 week later (Nov. vs. Oct.) as a result of EPAct2005
- EPAct2005 specifies that Congress can repeal the change after one year, if savings are not achieved —this could be the worst of both worlds, requiring firms to make changes twice
Predictions
- Energy companies will expend extra resources to change “hard coded” dates in IT applications, otherwise volume and billing calculations could be incorrect andviolate contractual agreements —table-driven date changes will pose fewer problems
- Companies will also divert resources to communications across market entities (e.g., scheduling, nominations, retail transaction hubs, commodity trading), which will need to be extensively tested to ensure consistency between demand and supply obligations
- Utilities with time-of-use (TOU) meters and interval data recorders (IDRs) without two-way communications will be forced to spend money on making changes to the devices, with an on-site visit costing from $40 to $200
Aging workforce will continue to be a major challenge for energy industry US
Drivers
- Crisis will hit oil and gas industry harder and faster than utilities due to demographics and surging demand for oil & gas
- In E&P, there is an increase in the level of activity without an influx of new geoscientists and engineers
- Utilities are less reliant on niche (geology, geophysics, petroleum engineering) college graduates, and are more reliant on craft labor
Predictions
- Upstream oil & gas companies will lead in the use of IT to address this issue, including investments in applications (e.g., work and asset management, process automation), workflow, and content delivery
- Utility companies will focus more on non-IT solutions, such as long-term staffing plans, re-training, college and vocational programs and outsourcing
- Leading utilities will adopt IT solutions for work and asset management
