Nov 21, 2022

14 min read

IoT-based Smart Energy Management

In the wake of the ongoing crisis in Ukraine, huge alarms have gone off on how precariously placed our energy security is, as a global unit. Global energy supply is an extremely dense, interconnected grid involving millions of moving pieces. However, the conflict in Ukraine has exposed how over-reliant the globe is on a handful of entities. Now more than ever, there is a lot of uncertainty regarding energy security. This post examines how IoT technology is used to help us use energy more responsibly. Today, IoT technology is being used in a number of ways in the energy sector.


The entire edifice of modern human civilisation rests on our ability to harness, convert and use energy. All the perks of modern living that we see around us today directly result from our ability to manipulate large amounts of energy. As our population continues to skyrocket, one of the most pressing problems we face is energy security. Global energy supply has struggled, especially in the past two decades, to keep pace with steeply climbing demand - estimated at around 580 million terajoules! If that sounds too esoteric, that’s about the energy required to cross the Atlantic on a Boeing 737 - 580 million times - or the equivalent of the Hiroshima nuclear bomb going off every 4 seconds! Those are mind-bending numbers as they are, but when we factor in the growing rise in energy consumption, we are looking at even more unreal figures - by the year 2040, we are going to need around 740 million terajoules a year. If these numbers sound scary, it is because they are - it is hard to overstate the gravity and immediacy of the impending energy crisis that faces us. 

An overwhelming proportion of our energy demands are met by fossil-fuel-based sources - oil, coal and natural gas. This brings us to the concomitant crisis that inevitably accompanies concerns about global energy shortage - the severe environmental impact of our dependence on fossil fuels. The more energy we use, the more oil we end up consuming. This leads to more emissions and, consequently, more global warming. The global energy demand increased by 2.3% in the year 2018 as compared to 2017, representing the highest single-year increase since 2010. As a direct result of this growth in energy demand, carbon dioxide emissions from the energy sector hit a new peak that year. The urgency and significance of the global warming issue needs no introduction - global temperatures are understood to be on track to rise by 1.5  °C, well before the middle of the 21st century. If temperatures continue to rise at this rate, we will soon approach the cut-off mark of 2°C which is supposed to unleash unprecedented havoc on our ecosystem, jeopardising the very possibility of life on this planet.

Additionally, our prevailing modalities of energy generation and consumption are also associated with other environmental concerns such as air pollution, water pollution, water scarcity, soil degradation etc. It becomes imperative then that our reliance on fossil fuels for energy needs to end soon. There is a dire need to switch to renewable energy sources, that is being recognised globally.

In recent years, there has been a lot of concerted effort directed towards the development of sustainable, non-fossil-fuel energy solutions such as solar, wind and nuclear power. In most of the developed world, political action and public opinion has strongly backed this trend - In Europe, the origins of this movement to move away from fossil fuels can be traced back to the 1980s when concerns about climate change and ozone layer depletion started coming into the public eye. Since then, Europe has staunchly maintained a pro-alternative energy stance, at least on paper. Germany launched its famous program to transition to clean energy - Energiewende - some 30 years ago. Since then, many European countries have attempted to follow suit, with varying degrees of success and efficacy. In keeping with this trend, the present German government has announced its rather ambitious intentions to completely phase out coal by the year 2030 - a full 8 years before the target set by its predecessor. France too has joined Germany in setting ambitious goals to push towards greener forms of energy - Following his victory in the recently concluded elections, French President Emmanuelle Macron tweeted “Making France a great green nation, that is our project”. This was after a campaign where the issues of climate change and renewable energy were right at the forefront. Other countries like Austria and Poland are trying to commit more staunchly to the renewable energy project, with the former announcing a EUR 300m renewable energy subsidy and the latter making sizeable investments in offshore wind. 

When the conflict in Ukraine began earlier this year, the world and Europe in particular received a harsh reality check - if there weren’t enough reasons already to address the issue of energy security and sustainability with the utmost urgency, there was yet another pressing reason now. In the light of this tumultuous geopolitical situation, it was clearer than ever that the global energy supply chain was precariously placed at best - In addition to the environmental and economic aspects of the issue, there was now a pragmatic, even moral angle - the hypocrisy of our environmental rhetoric was brutally exposed. It was more evident than ever that in spite of 30 odd years of talking about renewable energy, prodigious legislation and investing hundreds of millions, we were still critically dependent on oil and gas for our energy needs. 

It was well and truly a wake up call that made it impossible to turn our heads away from the reality of the global energy situation. The issues of energy security and the impending global energy crisis have come to light in a manner so inexorable, so inescapable that it is impossible to run away from it. 

Energy efficiency is the name of the game

The sustainable development goals lined out by the UNDP highlight energy efficiency as a top priority if we are to move towards  holistic and sustainable development. Various studies have corroborated this - we simply can’t move towards renewable energy sources and come to a place where they form the backbone of our energy chain unless we dramatically increase the efficiency of our energy use. As things stand, we waste enormous amounts of energy. This is one the major contributing factors to the gargantuan demand for energy globally - promisingly, global energy efficiency improved slightly in the year 2021 after the worst year in over a decade. But, that’s not the whole picture - between the years 2011 and 2016, energy efficiency improved by 2.3% year on year. In the last five years though, it has fallen to 1.3% - Well short of the 4% target set, for the years 2020-2030, to be on track for the Net Zero Emissions by 2050 scenario. 

The numbers are clear as daylight - we really need to get our act together in terms of energy efficiency - we simply can’t afford to be wasteful with energy when the costs of generating it are so huge and multifarious. Improving our energy efficiency drastically is probably the single most effective thing we can do to improve our energy situation. It’s not just about sustainability though - driving towards more energy efficiency comes with a whole raft of economic benefits as well.

So, how do we achieve higher energy efficiency?

The global energy supply chain that begins from extracting raw materials and ends with providing the end-consumer usable forms of energy can broadly be divided into three major parts - Energy Generation - which includes extraction and refinement, energy transformation - including distribution and the demand side, which includes all the components involved in making energy available for homes, commercial and industrial establishments. 

As things stand, there is a criminal amount of energy that is wasted in each of these steps - it is estimated that the United States wastes about 68% of its total energy! Check out this chart put out by the World Economic Forum that helps visualise the sheer scale of our inefficiency in dealing with energy. That’s an appalling statistic if there ever was one - but it does have a silver lining - there is tremendous scope for improvement. As is the case with most other things, it would stand to reason that getting waste down from 68% to 40% is a lot easier than, say, bringing it down from 10% to 8%. That said, we have our task cut out - we need to double our energy efficiency in the next few years if we are to keep pace with the goals set by the zero emissions by 2050 scenario. 

Make no mistake, our global energy situation is worryingly placed indeed and the amount of energy we waste globally is egregious to say the least. Nevertheless, there is hope to be gleaned from the fact that we are working with fat margins, as it were. By employing our state-of-the-art information processing technologies, we can optimise nearly every step of the global energy supply chain and that can make for some pretty sizeable real-world gains. 

Using IoT to drive energy efficiency

The internet of things, over the past 10 years or so, has announced itself as the technological modality that will arguably have the biggest hand in shaping our future. Powered by advances in semiconductor technology, microelectronics, artificial intelligence and robust data networks, IoT technologies now find themselves inexorably enmeshed in the way we go about our activities. 

The impact of IoT on nearly every industry in the world has been tremendous - IoT and big data are enabling an unprecedented level of granularity and precision in the way we treat our sick, grow our food, organise our cities, homes and public transport. In fact, these are just a handful of use-cases where IoT adoption has been shown to bring in tremendous benefits. 

The basic premise behind any IoT network is this - with respect to nearly all processes involved in human life, more data means more optimisation. When we have access to huge amounts of high-quality data and systems that can glean meaningful and actionable insights from said data, we are able to increase efficiency, reduce waste and as a result, economise on costs. To put it very simplistically, IoT networks function like artificial nervous systems that scour the field of operation, whatever it may be, and collect enormous amounts of information which can then be used to actuate changes directed towards more efficiency. 

The energy sector is no different - as we saw earlier, there is a tremendous amount of energy that goes to waste in every step of the energy supply chain - using big data and IoT technology, it is possible to obtain real-time intelligence on the inner workings of our energy chain and use this intelligence to identify means to reduce energy waste and consumption wherever possible. 

IoT and the energy sector

Over 80% of the energy produced today in the world comes from fossil fuels. Around the world, voices calling for a shift towards renewable energy sources have increased - there is a growing recognition among the nations of the world that we probably don’t have too much time before we have to transition to greener sources of energy on a large scale - However, this is easier said than done - developing countries that are just getting up on their feet economically will find it nearly impossible to completely phase out fossil fuels in the near future. 

Nevertheless, the grave ecological risks posed by our dependence on fossil fuels are well known - the large-scale extraction and use of fossil fuels are directly linked to higher emissions, environmental pollution and adverse health and economic impact. A practical middle-ground option is what we’re going to need while we figure out how to power the world using renewables exclusively. 

Using IoT technology to reduce energy losses and optimise consumption patterns is the middle ground that we’ve arrived at - and it’s a sensible place to start. IoT technologies can offer substantial benefits if deployed at every stage of the energy chain. Today, IoT is starting to feature more and more in the energy sector in various forms and capacities - smart energy monitoring is no longer an abstruse exercise in wishful thinking - we are starting to see IoT systems feature widely and prominently in various subsystems of the global energy sector - smart grids, smart monitoring, predictive maintenance, smart cities, smart grids, smart factories, smart homes, intelligent transport etc. - all these IoT subsystems are designed to maximise efficiency and promote a more holistic approach to design and industry. 

Energy management systems based on IoT networks allow us to monitor energy use in real-time, across various stages in the energy chain - from generation to consumption and everything in between. Energy monitoring allows us to obtain granular analytics from every step along the way, checking for performance and efficiency metrics and isolating the most high-yield areas for interventions targeted at increasing energy efficiency. 

IoT-based smart energy monitoring

Energy represents possibly the most pertinent and critical issue that faces this generation of humans - the situation isn’t likely to improve magically, especially in the face of a skyrocketing global population - we are going to need solutions and drastic ones at that if we are to stand any chance of mitigating calamitous consequences. 

IoT technology holds the key to reducing energy wastage and building smarter and more reliable global energy networks - But technology is just an enabler - a potentiator if you will. We need to deploy these incredible tools in the best way possible and keep ourselves oriented towards building a better future. 

The warning signs are coming thick and fast today that there are a number of things we need to get better at as a species - disasters and crises - of one kind or the other are sweeping the entire globe - it’s about time we took notice and responded with some concerted action.

IoT is being used in a variety of ways to increase the efficiency and effectiveness of our energy infrastructure. In recent years, IoT-enabled technologies such as smart grids, smart meters and smart homes have enabled great leaps in being economical with this extremely precious resource. 

We have planned a series of follow-up articles relating to smart energy management and using IoT to this end - in this post, we wanted to establish the background for why this vertical is a really pressing one for IoT technology. 

In our next post, we will take a look at some of the key areas within the world of energy in which IoT is successfully being deployed today. 

About the author

Abishek Swaminathen

Senior Content Manager

Abishek is ONiO’s senior content manager. A medical doctor by profession, he stumbled onto a writing career almost by accident, as it were. Words have enthralled Abishek since the day he first held a book and at ONiO, he channels his inner wordsmith towards providing our subscribers with regular doses of fun and informative content.

We are using cookies to give you the best experience on our website.
You can find out more about which cookies we are using or switch them off in settings.