Renewable Energy and IoT: Market Insight

For the past decade, the attention and slow transition to cleaner energy sources stimulated the development of the renewable energy domain. The large local farms, windmills across the sea, and biothermal electricity production have become a new reality. Knowingly that all the equipment, even the most advanced, needs a thorough maintenance, the renewable energy market is experiencing rapid sensorization of the grid infrastructure to add the "smart component" and maintain and monitor the assets through advanced analytics and machine learning (ML). ABI Research sees a few analytics vendors coming to the renewable energy market to flex the knowledge and advantages of the analytics and ML functionality for the renewable energy market.

There is daily news about investment in the artificial intelligence (AI)/ML application and powered Software-as-a-Service (SaaS) for sustainability and cleantech—it will be the next hot market. In August 2021, Kevala's Assessor Platform, a newly emerging start up in collecting, processing, and analyzing data from energy grid infrastructure, secured US$21 million in a Series A round. Grid storage startup Form Energy raised US$240.0M in a Series D round led by ArcelorMittal. Databricks raised US$1,600.0M in Series F for its analytics alongside AI-powered tool provider Motivo, which drew a US$12.0M Series A investment led by Intel Capital.

There has been an emergence of a new ecosystem on the Internet of Things (IoT)/analytics domain, where the distributed infrastructure, edge computing, 5G, IoT, big data and analytics has converged with the clean tech domain. The new outlook on technology is all about increasing automation and computing capacity to facilitate economic growth.

Interestingly, during the lockdown period of the COVID-19 pandemic, sustainability and cleantech took one of the most vital hits and slow-down in the energy market, with reduction of investment, disruption of the value chain, and massive delays in manufacturing in both private and public sectors. The renewable energy sector generated spending on energy technologies shows that spending on renewables can create five more jobs per million dollars invested than spending on fossil fuels (according to Thailand's Alternative Energy Development Plan 2015-2036).

The growing demand stimulates the emergence of new AI and analytics applications in the business to business (B2B) segment, which cross-stimulates the investment in the cleantech area. The reality is that the market dynamic favors renewable energy from the customer side, as consumer awareness has grown dramatically, and more people are installing smart and cleantech in residential areas. Simultaneously there is growing demand from the business side that is favoring renewables due to cost-saving and good marketing outlooks, where a top corporation could score high in Environmental, Social, and Governance (ESG) and increase traction for the brand.

Based on the current market outlook, ABI Research concluded that sensors and actuators are the top growing market in the renewable sector. The trend for sensorization has been going on for several years but was stimulated further with the development of edge computing. There is increasing adoption of the sensor technology, as they are equipped to handle more operation data as well as enable enterprise flexibility and low maintenance costs. The further integration of sensors with IoT Edge SaaS and Platform-as-a-Service (PaaS) is expected to be the next wave of development in this market segment.

There is a significant development in preventive maintenance, asset monitoring, and asset tracking solutions with the application segment. The pressure from new legislation worldwide stimulates the public sector to invest and become proactive in the market, specifically with air quality monitoring solutions, CO2 monitoring, air and water filtration solutions, etc. Finally, the analytics and ML segments are also on the rise but still not getting the full attention within the ecosystem. Advanced analytics and ML SaaS are moving to the cloud environment and AWS, IBM, and Azure marketplaces. However, with many active parts on the production and consumption side of the renewable energy market, the integration and processing of the data remain the challenge. Hence, analytics is yet to be the top market to watch.