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How 5G is shaping the energy industry

Jul 22, 2020
6 min read
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By: Vinodkumar Raghothamarao, Director Consulting, Energy Wide Perspectives & Strategy, IHS Markit EMEA

Energy companies operate in dynamic and complex environments, where they face constant challenges especially in terms of supply and demand. Energy companies have been adopting digital technologies for years, helping to increase the recovery of fossil resources, improve production processes, reduce costs and improve safety. Within the offshore energy sector, the need for digitalisation and advanced communication systems is greater given the platforms’ remoteness and isolation, harsh sea conditions, strong and unpredictable winds, water, extreme temperatures, and distance from the shore The energy industry is known to be a heavy user of reliable, secure, and resilient networks for providing seamless communications for their daily operations. Routine operations alone require transmission of an insuperable volume of data and reports on logistics, supply, production etc.

Technology and innovation are at the heart of many of these efforts and in certain “pockets of excellence” are helping to reduce facility costs by 5–15 per cent, lower operating costs by 10–70 per cent, and raise production efficiencies by 5–20 per cent. Now with the oil prices low, the time has come to evaluate, adapt and embrace new technological initiatives. 5G is one of the leading communication technology initiative driving the tectonic shift within the energy industry. To date, mobile technology has progressed from a predominantly people-to-people platform (3G) toward people- to-information connectivity on a global scale (4G). 5G can leverage and extend the research and development (R&D) and capital investments made in prior mobile technologies to advance mobile to a platform that delivers the much-needed ubiquity, low latency, and adaptability required for future uses. 5G will make possible new classes of advanced applications, foster business innovation, and spur economic growth.

5G mobile networks represent the next major phase of mobile telecommunications standards beyond the current 4G Long Term Evolution (LTE) standards. 5G technology will do far more than usher in new service opportunities for mobile network operators (MNOs). Indeed, IHS Markit expects 5G will act as a catalyst that turns mobile into a robust and pervasive platform that fosters the emergence of new business models and transforms industries and economies around the globe.

Initially, 5G deployments are centering on enhanced Mobile Broadband (eMBB) and fixed wireless access applications. eMBB addresses the human-centric use cases for access to multi-media content, services, and data. In addition to eMBB, 5G builds upon earlier investments in Machine to Machine(M2M) and traditional IoT applications to enable significant increases in economies of scale that drive adoption and utilization across all sectors. Improved low-power requirements, the ability to operate in licensed and unlicensed spectrum, and improved coverage will all drive significantly lower costs within the MIoT. This will, in turn, enable the scale of MIoT and will drive much greater uptake of mobile technologies to address MIoT applications such as

  • Asset tracking
  • Energy/utility monitoring
  • Physical infrastructure
  • Remote monitoring

Mission Critical Services (MCS) represents a new market opportunity for mobile technology. This significant growth area for 5G will support applications that require high reliability, ultra-low latency connectivity with strong security, and availability. This will allow wireless technology to provide an ultra-reliable connection that is indistinguishable from wireless to support applications such as autonomous vehicles and remote operation of complex automation equipment where failure is not an option.

MCS represents a potentially huge growth area for 5G to support applications that require high reliability, ultra- low latency connectivity with strong security, and availability, including:

  • Autonomous vehicles
  • Drones
  • Industrial automation
  • Smart grid

5G will drive improvements across the entire oil and gas lifecycle, from upstream developments to refining operations to transportation, to real-time monitoring of assets such as drill rigs and pipelines, to remote operations and surveillance.

For instance, Houston-based Infrastructure Networks has been installing gear and building 5G capabilities as part of an effort to create the first 5G-enabled oil drilling site in the Permian Basin. Big carriers such as Verizon, Sprint, T-Mobile and AT&T are also taking measures to improve oilfield connectivity, deploying 5G to key spots in the Permian Basin and the Gulf of Mexico.

Edge computing technology can be used for remote pumping and distribution sites, connected through 5G networks to a main automation system. This helps with the monitoring and communication of pipelines to identify irregularities and discrepancies in data in real-time. Thus allowing automation control systems to respond immediately to take action against problems. While many of these sites currently have limited forms of connectivity, such as cellular or satellite, this type of infrastructure would need to be updated to handle the data volumes required for 5G.

In addition, 5G has the potential to serve several IoT use cases for the oil and gas industry like asset tracking and monitoring, gas detection and prevention, predictive and preventive maintenance, etc

Utilities can benefit from the MIoT and MCS capabilities of 5G for smart metering and smart grid automation. Currently, smart metering deployments are enabled by a range of different cellular, mesh, and wired technologies. 5G’s ability to support private networks, use licensed and unlicensed spectrum, and radio hopping/mesh renders it a flexible, multi-purpose technology for both greenfield and replacement deployments. Alongside the general economies of scale, the deep coverage and low power characteristics of 5G will enable utilities to benefit from automated meter reading (reducing the need for manual readings or inspector visits), more accurate customer billing, and fraud prevention.

There is an ongoing trend for renewable energy, such as solar or wind, to be integrated onto the grid; however, the fragmented and irregular nature of this supply makes integration complex. 5G, alongside analytics that can identify the optimal time for different sources of energy to come on to the grid (i.e., managing supply and demand), can enable automated real-time grid switching.

Road Ahead

Using deep learning and IoT, new predicting and monitoring technologies for the oil and gas industries have emerged that could completely transform them. Being able to predict what’s coming and see beyond what’s currently seen allows companies to deal with potential problems before they happen, saving them time, money, and bad publicity. A future where we’re surrounded by artificial intelligence incorporating deep learning and IoT is imminent. Going forward, the impact of ML and AI has already been realised in the industry. Early adopters are taking advantage with a head-start in the competition to protect their assets. Tightening research and development budgets are prompting oil and gas firms and their suppliers to think differently about both how they source new technologies and where they direct scarce resources. These evolving technology approaches are likely to outlast the current downturn and could lead to real changes in companies’ overall business strategies.

This column first appeared in the July issue of Pipeline Magazine

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