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Top cloud technology solutions for the power sector

The power industry is undergoing a seismic change.  

It faces numerous challenges, including ageing infrastructure, changing weather patterns, changing demand profiles, adoption of renewable and distributed energy sources, and electric vehicles (EVs).  

Together, these challenges signal a new era of rapid modernisation, with the power and energy sectors leading the way in cloud technology adoption.  
Cloud computing can help extend the life of existing infrastructure by facilitating predictive maintenance.  

Cloud computing can also support the integration of new technologies such as the smart grid, DERs and EVs.  

Cloud facilitates centralisation of data from increasingly decentralised assets thus enabling advanced analytics and machine learning, which in turn enhance utilities’ ability to address looming industry challenges. 

Big data usage in energy cloud technology 

Big data and cloud computing are helping power companies to churn consumer data and understand behaviours and patterns in the way customers are using electricity.  

This is enabling improved responsiveness to meet the consumer needs and generation planning, as well as helping the utilities to be better equipped to meet the peak demand.

Business benefits of energy cloud technology

The cloud represents a more agile approach to operating an IT architecture for energy companies, particularly in support of modernising enterprise applications. 

Primary benefits of energy cloud technology include the following:


Businesses can access IT equipment, applications, processing, and storage capacity as needed, rather than buying hardware and software assets upfront.  

Organisations can gain faster access to the latest application updates and other enhancements through this model. 


Cloud can deliver significant cost savings across a company’s IT budget. 

Cash flow 

Billing is typically metered on a usage or subscription basis, so IT expenditure shifts from one-off, upfront capital expenditure to monthly operating expenses, offering a cash flow advantage. 


Computing capabilities like storage, processing power, or network bandwidth can be scaled up almost instantly and scaled down again, depending on demand, and users are unlikely to ever be short of capacity. 

Ubiquitous access 

IT resources can be accessed by any authorised users on any authorised devices from any authorised location using an internet connection. 

Pandemic impact on energy cloud technology 

The impact of Covid-19 on the power industry has been understandably negative.  

Falling energy demand and subsequent falling prices have caused market uncertainty.  

Reduced demand has hurt utility earnings, with an average 9% downward earnings revision for the global top 220 utilities.  

Unless energy demand increases again, utilities will be forced to curb investments in both new energy technologies and major IT projects.  

Consequently, cloud adoption in the utilities and overall power industry has been decelerated by Covid-19.

Environmental sustainability  

Ever-growing environmental concerns are changing how energy is produced and consumed.  

Traditional utilities are experiencing pressure to shift to renewables, particularly as declining prices and advances in energy storage make low-carbon sources more attractive.  

Sustainability legislation can add more complexity, given the increasing volatility of both politics and weather.  

Changing demand profile  

Energy consumption is becoming more efficient, which tends to reduce overall demand, but economic growth has the opposite effect.  

The changing demand profile will be exacerbated by the adoption of new energy sources and particularly by the increase of DERs and increased electrification.  

Utilities with ageing IT infrastructure will struggle to contend with DER and microgrids over the coming years.  

Grid resilience  

Despite the growth in decentralized systems, the traditional grid will remain central to power distribution. Modernisation and improved resilience will be essential.  

In 2019, utilities spent almost $760bn on infrastructure, but the IEA expects this figure to fall by 10% to its lowest level in over a decade.  

Grid hardening has been a particular focus, driven in part by the increased frequency of severe weather events.  

Ageing power production infrastructure  

The power industry increasingly must contend with ageing infrastructure.  

Asset renewal and asset monitoring requirements are driving capital expenditure.  

Modernisation presents opportunity, however, to extend asset life, increase efficiency, and enable EVs and smart city technologies. 

Ukraine conflict impact on power industries 

The power sector, especially in Europe is expected to be impacted due to gas availability and price issues.  

Utilities will have to look for alternate sources of gas or shift to other sources of generation.  

The recent ban on Russian oil and gas supplies will have a varied impact on both the buying and selling nations.  

Russia is an important source of energy supply for the US, even more so for European countries.  

Pressure on the Western Bloc to impose more sanctions on Russian energy imports due to civilian killings in Ukraine by Russian Army. Fuel prices (such as for oil) have increased due to talks of a boycott of Russian oil.  

Energy companies continue to exit or halt operations in Russia due to increasing pressure to cut ties amid civilian killings in Ukraine.  

The electric vehicle and energy storage market will be impacted due to a shortage of nickel and an increase in commodity prices.  

The International Energy Agency (IEA) recently published “A 10-Point Plan to Reduce the European Union’s Reliance on Russian Natural Gas”, providing short-term measures and claiming that the EU could cut Russian gas imports by more than 33%.  

It also advocates for gas-to-coal switching that could account for the majority of the potential reduction in gas demand. 

Impact of cloud technology on the power industry

This thematic impact assessment chart found here, indicates the areas in cloud computing where power companies should be focusing their resources.  

Both the industry and technologies have been separated into their value chain components.  

A particularly fruitful area for investment is SaaS, which constitutions the largest segment of the cloud industry.  

Return on investment in cloud services is highly dependent on the company and sector 

Cloud-driven innovation in the power sector 

To best track the emergence and use of cloud in power, Power Technology tracks patents filings and grants, as well as companies that hold most patents in the field of cloud. 

Number of patents in cloud in the power sector: past 20 years

Cloud patents tracker in the power sector monitors the patents filings and grants over the past two decades. 

Market forecast for artificial intelligence in the power industry 

GlobalData forecasts that the compound annual growth rate (CAGR) of cloud computing in the global energy industry to be 9.2% between 2019 and 2024.  

Note that the forecasts refer to the energy sector (power alongside oil and gas).  

The market value for cloud services is estimated at around $17bn in 2019, which is expected to rise to $28bn by 2024.  

The CAGR over this period is forecast to be 10.8%. Of the cloud services products, IaaS is expected to grow at the highest CAGR of 13.1%.  

SaaS, however, will retain the largest market share. In 2024, it is forecast to account for more than 50% of the total cloud service market for the energy industry despite growing at the slowest CAGR of 9.4%.  

Global cloud services revenue in energy will reach $28bn by 2024, an increase of $11bn from 2019. 

Cloud influencer activity in the power sector 

Power Technology tracks the mentions of cloud by pre-identified power sector influencers on Twitter. The graph indicates the volume of tweets and influencers mentioning cloud through recent months. 

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