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How digitalization makes energy and metals businesses greener and more profitable

Energy and metal enterprises face mounting pressure to evolve in response to increasing sustainability targets. Merely harboring good intentions falls short of satisfying the varying demands of investors, climate goals, and the drive for profitability. However, the strategic adoption of digitalization emerges as a vital solution, bridging the gap between environmental stewardship and economic performance. In this article, we’ll explore how digital transformation can further green initiatives and serve as a lever for financial success, detailing the multifaceted impact on operations, decision-making, and resource optimization within the energy and metal sectors.

Digitalization acts as a catalyst to drive operational efficiency and environmental sustainability. Businesses can streamline and accelerate adaptive operations by integrating modern technologies such as cloud computing, the Internet of Things (IoT), and Artificial Intelligence (AI) alongside composable architecture patterns.

Digitalization empowers employees with tools that automate routine tasks, provide real-time data for informed decision-making, and streamline communication. This enables them to focus their energies on more strategic, value-added activities and enhance their productivity and efficiency in the workplace. In addition, digital tools offer real-time monitoring capabilities for swift identification and correction of operational inefficiencies.

Digital platforms facilitate seamless collaboration between departments and stakeholders, improving coordination and accelerating project timelines. Through digitizing documents and processes, enterprises can reduce paper usage and physical storage needs, fostering an organized and efficient working environment.

Overall, digitalization transforms operations to be more agile, responsive, and aligned with modern business needs, driving productivity and cost-effectiveness.

Data-driven decision-making for resource optimization

Digitalization empowers energy and metal enterprises to adopt data-driven decision-making, which is essential for optimizing resources. Leveraging advanced data analytics, AI, and ML, companies derive actionable insights from complex datasets. Additionally, digitalization facilitates the consolidation and standardization of data across diverse contracts and operational frameworks. This transparency enables businesses to grasp the impact of various operational strategies on resource allocation and utilization.

The critical element here is transparency. When all facets of the operation are visible and quantifiable, businesses can begin the optimization process. This is not merely about seeing the numbers but understanding their interplay to predict outcomes and draft more efficient strategies.

Full transparency enables AI and ML models to unleash their true capabilities by analyzing interconnected data. These advanced technologies transcend simple data aggregation, providing in-depth analysis to reveal patterns and trends that inform resource deployment and operational efficiency. However, data traceability and reliability are the prerequisites for these models to add value. Inconsistent or inaccessible foundational data may inadvertently divert AI resources toward rectifying and connecting data points rather than analyzing and optimizing them.

Through accurate data capturing and curation, organizations can leverage AI to focus on optimization strategies. ML algorithms can help identify the most cost-effective materials and energy use, forecast demand more accurately, and minimize waste—powering a more streamlined operation that maximizes resources and drives down costs.

Furthermore, this data-driven approach allows continuous learning and improvement. As AI models digest new data, they refine their predictions and recommendations. Consequently, energy and metal enterprises are better positioned to respond to immediate operational challenges and can also adapt strategic plans for sustainable profitability.

 

Renewable energy adoption and cost savings

As the metal and energy sectors move toward more sustainable operations by integrating solar, wind, and biofuel energy sources (among others), digitalization is the linchpin that ensures this transition is cost-effective and operationally efficient.

First, digitalization facilitates the management of variable energy inputs inherent in renewable sources. For example, solar or wind power availability can be unpredictable, with varying output levels depending on environmental conditions. Advanced digital systems can predict these fluctuations and adjust operations accordingly, enabling a more dynamic alignment between energy supply and enterprise demand. Using predictive analytics, businesses can capitalize on periods of high renewable energy generation.

Moreover, digital sensors and smart grids offer real-time monitoring and control over energy usage, allowing enterprises to seamlessly switch between renewable and conventional energy sources based on availability and cost. This not only maximizes the use of greener energy but also avoids peak tariff periods. Furthermore, digitalization opens avenues to engage in energy trading platforms where excess renewable energy can be sold, creating an additional revenue stream.

 

Supply chain transparency and eco-friendly sourcing

For energy and metal enterprises, materials sourcing significantly impacts the supply regions’ ecosystem and social fabric. Thus, supply chain transparency is a critical component in promoting eco-friendly practices. Transparency is about seeing into the intricate web of suppliers, transporters, and distributors involved in the delivery of products; moreover, it’s about understanding the provenance and lifecycle impacts of materials and ensuring compliance with environmental and social standards.

Digital technologies play a key role in enabling such transparency. Digital systems enable information integration across the supply chain, facilitating a holistic view of the sourcing process. For example, IoT devices can track the movement of goods and monitor the conditions of transportation; advanced analytical tools can then process this data to identify bottlenecks, inefficiencies, or practices that may be environmentally detrimental.

Additionally, digital platforms allow for integrating external parties’ information—such as suppliers’ environmental certifications or third-party audits—into the decision-making process. This helps companies enforce sustainability policies throughout their supply chains by setting clear requirements for suppliers.

 

Carbon footprint reduction through smart technologies

Smart tech is crucial in driving efficiencies and enabling better resource management. Integrating IoT, smart sensors, and AI allows industries to monitor and optimize energy usage, minimize waste, and streamline processes—all of which contribute to a lower carbon footprint.

IoT devices and smart sensors can be deployed across an enterprise to gather vast amounts of real-time data, which, when analyzed, provide invaluable insights into energy consumption patterns. These technologies can monitor the energy usage of machines and systems, identifying unnecessary or excessive consumption. Energy-intensive processes can then be optimized, operating only when needed and at the most efficient levels.

In addition, AI algorithms can analyze collected data to predict and manage the operational load. Rigorously forecasting peak times and adjusting usage accordingly helps energy and metal enterprises avoid energy wastage. Smart technologies also facilitate preventive maintenance by predicting when machines or components will likely fail or require servicing. This prolongs equipment lifespan and maintains optimal performance.

 

Digital platforms can also aid in implementing a circular economy by enhancing recycling processes and material tracking, leading to more sustainable resource use and less environmental impact.

Economic incentives and government initiatives

External factors like economic incentives and government initiatives also nudge enterprises toward environmentally sustainable practices. These incentives often offset the initial costs of going green and encourage long-term investment in sustainable business models. Subsidies and grants are key pillars of this support structure.

Tax credits directly lower the tax liability for companies investing in renewable energy projects, energy-efficient technologies, and emission reduction measures. These credits reduce the overall cost of implementing green technologies, making the investment more financially viable. For instance, investment in wind and solar power assets or biofuel prioritization may be subsidized through tax credits, reducing the payback period and improving the return on investment.

Grants are another accessible form of government support, providing enterprises with capital to pursue sustainability projects without repaying funds. Grants can cover a range of activities from research and development to green infrastructure deployment; by lowering the financial barriers to entry, grants make it feasible for companies of all sizes to contribute to the broader green agenda.

Digitalization is often at the heart of these initiatives, as modernizing industrial processes through digital technologies can lead to significant improvements in energy efficiency and resource management. Digital tracking and reporting can also more readily capture government incentives for adopting renewable energy. Automated compliance reporting simplifies claiming subsidies, tax breaks, or credits.

For example, our Finnish branch has implemented a system for one of our clients in the food industry to collect and trace feedstock biocriteria from renewable energy feedstock collection through production and distribution. In addition to tracking movements, the solution also logs changes in sustainability parameters during transportation and feedstock processing.

The solution helps allocate biocriteria, respect the valuation of different sustainability parameters for other markets, and create accurate sustainability certificates for produced energy. This extra layer of supply chain visibility assists with meeting renewable energy directives and maximizes additional value gains from grants or tax credits that demand precise record-keeping.

 

Embracing Digitalization for Sustainability

Digitalization stands as a transformative force for energy and metal enterprises seeking to balance sustainability and profitability. By leveraging modern technologies and data-driven insights, companies can streamline operations, optimize resources, and reduce their environmental footprint.

However, this journey requires a commitment to innovation, collaboration, and cultural change. Yet, the potential rewards are significant—a greener, more prosperous future where sustainability and profitability go hand in hand.

In embracing digitalization, we pave the way for a world where business success is measured by financial gains and our collective impact on the planet. Let us seize this opportunity to shape an economically viable and environmentally sustainable future.

Want to know more?

We have decades of experience in the energy and metals sectors, including energy trading as well as the entire gamut of processes beginning at the molecular level and encompassing physical-world processes.  Our approach uses ecosystem thinking, agile design and development methodologies, and taking advantage of flexible modular architecture, microservices, and APIs. We rely on global technology partners’ commercial and open-source solutions to help you leverage solutions that fit your needs.

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Nortal's vision: digitalization driving sustainable prosperity

Business digitalization hinges on using data to enhance product quality, increase efficiency, minimize waste, and explore new business models. At Nortal, we specialize in shaping technological solutions to digitalize and optimize key processes. For more than three decades, we’ve worked closely with top industries worldwide, lending our expertise to help enhance clients’ efficiency, agility, and sustainability, and foster sustainable growth. Whether it’s creating resilient operations, reshaping a supply chain, or improving worker safety with technology, our solutions assist our customers in achieving sustainable growth at scale. Let’s connect.

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