Eaton study finds gap between digital transformation and energy transition efforts

Intelligent power management company Eaton today announced new research on the relevance of the energy transition in digital transformation planning for power-critical businesses.

Commissioned by Eaton, this S&P Global Market Intelligence report – The Intersection of Digital Transformation and the Energy Transition – highlights that although 77% of companies surveyed expect to transition away from their current power sources, only half are currently executing the digital strategies needed to navigate this shift.

In addition, less than a third of companies track key sustainability and energy intelligence metrics, and even fewer (17%) have digitally enabled legacy systems.

“We identified a major gap in how businesses are applying digitalization to realize decarbonization goals and this research is a wakeup call, shedding light on the opportunities for businesses to focus investments and make a bigger impact,” said Aravind Yarlagadda, executive vice president and chief digital officer at Eaton.

“Businesses need to move far faster on digital transformation. The good news is that the time for action is now, and tools like our Brightlayer digital foundation help businesses gain deeper energy insights that are essential to evaluate worthwhile investments. Our industry-specific software suites are already helping customers meet these challenges.”

The study included 1,001 respondents who are involved in digital transformation efforts across four power-critical business sectors in North America, Europe, the Middle East and Africa, including: buildings, data centers, industrials and utilities.

“Until now, enterprise transformation projects have focused primarily on optimizing business processes. The coming energy transition will impact digital best practices and processes and will prove an important competitive differentiator for firms that are first to embrace that approach,” according to Rich Karpinski, senior analyst, 451 Research, part of S&P Global Market Intelligence.

Sector research findings

Building owners and operators made clear power optimization and ESG reporting are critical issues. Sustainability is the top goal for this sector, prioritized by 46% of the sector respondent. Yet, building owners are skeptical that smart building initiatives will pay off: the top digital challenges include calculating a favorable cost/benefit analysis (cited by 52% building survey respondents) and a lack of pressing digital use cases (45%).

Data centers have embraced digitalization and are now looking for next-generation digital opportunities to either streamline operations or generate revenue to create competitive advantages. Next-step goals involve increasing use of renewables, cited by 50% of data center owners; improving energy storage, according to 47% of respondents; and making money selling power back to the grid, chosen by 34%.

Industrials have focused digitalization efforts on perennial challenges like addressing skilled worker shortages. Yet, digitalization addressing energy transition lags. Only 24% of industrials cited energy and power concerns as a key digital driver for industrial transformation. For industrials to maintain or gain a competitive upper hand, applying digitalization to the energy transition will be a key advantage.

Utilities are facing massive shifts in energy generation as renewables increase along with the need for increased digital intelligence. Digital transformation is essential to new business models and revenue sources, including support for electric vehicles (EV) through customer EV-charging needs (identified by 49% of utility respondents) or EV charging stations themselves (cited by 45%).