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How is Innovation Transforming the Energy Industry?

Whenever you talk about the energy industry, the word innovation is not far behind. Everything about the energy industry is based on innovation, whether we mention light bulb or clean energy production. One statistic is particularly impressive: 40 percent of the natural gas production in the United States is done through unconventional gas. In addition, around 42 percent of the world’s total power is done through renewable technology.

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energyHow is innovation in the energy sector different from other industries?

There was a conference this summer where some of the best and brightest of the energy industry got together to talk about market trends, new sources of energy and the latest innovations. Major players from companies such as GE, Deutsche Shell and McKinsey were present at the event.

They spoke about how innovation and new technologies were not only useful for the oil and gas industry, but absolutely imperative. They know that renewable energy and other new technologies will play a big role in creating a positive impression of these companies. In addition, they can continue to make money while helping the environment, which is always a bonus.

A majority of people expect the next major disruptive technological advancement to come from the energy industry, and all the major companies are hoping to lead the way in meeting this expectation. However, these companies are also acutely aware that failure is not uncommon in this industry.

Around 10 to 15 percent of innovations they attempt will fail. This is common and it is not something that the companies are worried about. They know that complex situations are involved in these innovations. However, they just need to get it right a few times to find the right technological advancement.

Another great thing about the energy industry is that they can incorporate evolution in technology from other industries into their way of doing business. For example, innovation with big data or information technology will play a major role in helping energy companies with their own work.

Every year, it is much easier to analyze terabytes worth of crucial data to help energy companies optimize their current systems and to help them grow new ones. Even other industries are adapting in their use of oil and gas. For example, transportation companies now use a lot more natural gas than in the past, which is emerging as a real substitute for diesel fuel.

The major players at the summer conference also believe that the energy section is experiencing much more innovation every year than at any time in the past. Where 2 or 3 percent innovation per year was the norm, they are now at a level where 20 or 30 percent innovation is not a surprise. This rapid rate of innovation helps them branch out into new ventures, which can help pay for the 10 or 15 percent of their ventures that are completely unsuccessful.