ERP Firms in Pakistan, Digital Transformation of Business: Smart energy distribution - the cornerstone of a smart city

Today, more than 55% of the world’s population reside in cities with that figure expected to escalate to 68% by 2050; that is, two-thirds of the total global population will be living in cities over the next three decades, according to the United Nations.

While this dramatic rise in urbanization is in part due to an increase in the overall world population, the hope of gaining a better standard of living is another major pull factor that attracts these masses into the megacities. However, this increased influx in cities is feared to snowball challenges to economic development and resource management, and thus threatens the very basis of this movement – the widely-cherished quality of life of cities.

Keeping these factors in mind, the demand for rapid urbanization has now become synonymous with the call for smart cities development which, unlike the sci-fi utopia that it sounds like, refers to a framework that aims to use innovative technologies to drive operational efficiency, cost reduction, and environmental sustainability for urban residents in all parts of their life.

Where all of the major cities of the world including New York, Singapore, London, Toronto, and Tokyo are now gearing up for a second wave of smart city transformation, Pakistan is also beginning to register itself into the race with multiple digitization efforts being unfolded at the national and provincial level. Steps are being taken to revamp infrastructure, mobility, security, and housing across the country, integrating technological measures to ensure smart planning and management of resources.

The energy sector, however, which is deemed as the cornerstone of a smart city and the one which is central to industrial and social growth, seems to be left behind in this digital upgrade drive. On the one hand, the global energy industries are striving to wholly shift toward renewable sources, while on the other hand, only 4% of Pakistan’s energy mix comprises of renewable energy, making any chance of climate conservation seem like a long shot, at least in the foreseeable future.

Maintaining a balance between its basic energy demand and supply is another pressing issue of the country’s energy sector. While the nation was tackling the electricity shortage issue since decades, last year brought a new and unfamiliar problem: too much generation capacity.

According to a recent report by Bloomberg, Pakistan produced a surplus power supply last year and is now expected to produce 50% additional electricity by 2023. While it may sound like good news to Pakistanis who are frequently struck with load-shedding and power outages, it is, in fact, quite problematic for the government who has to pay the producers for the expensive extra electricity even if the generation is turned off.

In such situations, smart technologies have an integral and immediate role to play in the establishment of a smart energy system for a smart city. The country’s IT industry is booming with innovative digital equipment and solutions that can streamline every process from energy production to distribution, optimizing efficiency and transparency throughout.

Energy Finance Analyst, Simon Nicholas, has deemed unreliability of grid as the primary reason behind the frequent power outages in the country despite the sector’s overcapacity. With a shift toward smart energy, the centralized distribution system which places the burden on a single entity for generation, transmission, and distribution can be substituted with microgrids which can make the energy infrastructure localized and more resilient. Smart grids are also widely being used which enable a real-time analysis of customer demand trends, helping to reduce discrepancies between supply and demand.

Currently, the world of IT is rich with almost an inexhaustible list of solutions for every problem, from ERPs managing and integrating the functions of core business processes in a single system for increased efficiency, to cloud computing allowing agile and cost-effective resource management. Companies such as SAP are also operating in the local market to provide such solutions. The need, however, is for the governing authority to identify the importance of taking a leap toward smart energy practices that can keep up with the demands of smart city residents, ensuring the quality of life that it promises.

Copyright Business Recorder, 2022