Transitioning from fossil fuels to sustainable energy sources requires a transformation of the physical world around us. Over the past six years, the installed capacity of renewable energy assets, EV charging stations and carbon projects has more than tripled in the U.S. alone. Behind these tangible new technologies – like the rooftop solar installations, EV charging stations and wind farms we all see popping up – there’s a web of less visible enabling technologies needed to safely monitor, operate and scale them. At Energize, we see this “digital infrastructure” layer as the lifeblood of the energy transition. Without it, it will be impossible for new climate assets to scale and take hold.
Not only is digital infrastructure a crucial component for decarbonizing our world, it also represents a strong market opportunity for climate software entrepreneurs and investors. Many technology startups are tackling challenges and spurring innovation in digital infrastructure – but for these companies to be successful, they must deeply understand the landscape and intricacies of commercializing in this rapidly evolving, behind-the-scenes world.
Welcome to Energize’s newest deep dive, The Data Layer: The Role of Digital Infrastructure in Climate. We'll share the deep dive in four parts, and with each blog post, we'll also share an accompanying report. View our first report — which includes additional market analysis and data— here.
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First, let’s take a step back to explore why digital infrastructure matters for the sustainability transition:
- Why is digital infrastructure needed for the sustainability transition? Energy, mobility and carbon project assets are becoming increasingly distributed as our world moves from a centralized, hydrocarbon-based economy to a decentralized, low-carbon economy. Wind, solar and EV charging resources are leading the deployment of distributed climate assets in the U.S. Voluntary carbon offsets are also expected to continue growth, with most offsets generated by distributed, nature-based projects. The increase in distributed assets comes with a heightened need for new digital infrastructure technologies to support the construction, monitoring, operation and security of these new assets.
- How can digital infrastructure create value within the sustainability transition? As climate assets become more distributed, field offices are becoming less relevant, and decision-making is becoming more centralized. Today’s physical assets are digitally native with internet connected sensors, devices and applications so that stakeholders can collect asset data and make informed decisions remotely. Now the big question is: How can we utilize digital infrastructure to efficiently collect data, analyze data and make informed decisions about our new, distributed climate assets?
- What challenges must be overcome to successfully deploy and scale digital infrastructure in climate? Companies that are building and commercializing digital tools to make climate assets more efficient should focus their energy on these four core challenge areas:
1. Data collection, aka tools that help aggregate data at scale from a geographically distributed asset base. Examples in data collection include drones and robotics to visually inspect equipment and collect data during planning, construction or operation of the assets. Data collection technologies must balance the cost of the solution with the ability to collect granular data over a large geographic area.
2. Data management, aka tools that help route and transform the data efficiently to process large quantities of information. Today’s climate assets are faced with connectivity and industrial control challenges due to their geographically remote nature. New advances in 5G connectivity and edge control provide solutions for these distributed problems.
3. Data analytics, aka purpose-built tools for analyzing large datasets and deriving insights. Top challenges/opportunities include processing and visualizing large datasets. These platforms often utilize a combination of GPUs and CPUs to query datasets so that the user can make time-sensitive, impactful decisions.
4. Data utilization, aka tools that drive action from insights gathered through data analytics. Data utilization software are applications that drive action in the field when building, operating, or maintaining the physical infrastructure.
Energize has been studying the digital infrastructure landscape for years, and we’re excited to share insights from our proprietary research publicly for the first time. We’ll structure our subsequent deep dive blog posts using the same four pillars we used to organize our research (and the same four we highlighted above): Data Collection, Data Management, Data Analytics, and Data Utilization. Applying these four pillars to digital climate assets allows us to define the full scope of digital infrastructure and identify patterns across the digital infrastructure value chain.
In these deep dive blogs, we’ll explore the recent advances in digital technology and establish how we can utilize new tools and business models to scale our digital infrastructure. We’ll also identify the challenges with existing digital infrastructure in today’s new energy landscape, map out the market of startup companies in the sector and define sustainability’s software stack – the set of digital tools needed to build, operate and maintain distributed climate assets at scale. We believe these are crucial, and under-discussed, areas within climate tech. The world of digital infrastructure is complicated, but it is an essential part of the sustainability transition – and we’re here to break it down.
With each blog post, we'll also share an accompanying report. View our first report — which includes additional market analysis and data— here.
Stay tuned for our next post: Deep Dive Part 1: Data Collection
