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Unless you’ve been living under a rock for the past year, you probably know that the Metaverse—sometimes called Internet 3.0—is one of the biggest buzzwords to come along since the term ‘Information Superhighway’ was first bandied about more than 30 years ago. And just like the internet and later mobile phones, it could take years, maybe decades, for this virtual, parallel world to realize its ultimate potential.
But like the internet and mobile phones, the Metaverse will ultimately happen, creating operational efficiencies, ESG benefits, increased customer engagement and further untold applications. And while much Metaverse hype today focuses on gaming and social network use cases—Facebook famously renamed itself Meta in October 2021—in fact commerce and industry, including the energy industry, stand to benefit from the advent of the Metaverse.
Indeed, according to technology evangelist Kevin O’Donovan, the Energy Metaverse already exists. Speaking at Enlit Europe in November 2021[1], O’Donovan noted that critical energy industry suppliers and service providers are already embracing many of the core technological components of the Metaverse. These include digital twins, extended reality (XR), artificial intelligence and machine learning (AI/ML), blockchain based applications, advanced wireless networks, and more.
Guidehouse agrees with O’Donovan’s thesis. Not only are billions of dollars likely to be invested by the energy industry in these foundational technologies in coming years, but a multitude of new use cases should emerge over the longer term. In this article, we’d like to push the envelope, imagining a day in the fully mature, evolved, integrated and secure Energy Metaverse. In so doing, we hope to provide energy industry leaders with a vision to inform smart incremental Metaverse investments today while keeping an eye to the end game.
Ready Player One?
Guidehouse believes the Energy Metaverse will play a role in (at least) four key functional areas at utilities and energy companies: employment and training, asset and system management, customer engagement, and ESG. Change will come incrementally, and industry participants should be measured in their investment strategies. That said, envisioning where the Energy Metaverse ultimately lands is a fun—and hopefully prescient—exercise.
Sunday Morning, January 2040, Salt Lake City, Utah
Sam and Martha, a young couple who recently purchased their first home, are enjoying a lazy Sunday morning. “Let’s go to the mall,” says Sam. “We need a bed for the spare room. And bedding.”
“Sure,” says Martha. “Here,” she adds, handing Sam his VR headset. She puts on hers, and together they enter Metaverse Mall. Their (well-dressed and physically accurate) avatars peruse Pottery Barn’s digital store, then wander toward Williams Sonoma. Along the way, they pass Energy X, their local power utility.
“Oh, wait,” says Martha, turning into the store. “We need a new smart thermostat. That old Nest is ancient.” The virtual Energy X sales associate helps Sam and Martha choose a new thermostat. As she adds the purchase to their account, the associate asks, “That should arrive Tuesday. Do you need assistance with installation?”
“No,” says Sam. “I got it.”
“Okay, great. Also, I see your home doesn’t yet have solar panels. Are you interested in a cost benefit analysis? It only takes a few minutes.”
Sam and Martha look at each other. They’ve talked about going solar but thought they’d have to wait before they could afford it. “Let’s do it,” says Sam. “At least that way we’ll know how much we have to save up.”
“Oh, the upfront costs are minimal,” says the associate. “There are really attractive incentives. And your house is ideally positioned to maximize the benefit. See?”
The image of the virtual world inside their headsets disappears and a photorealistic image of their home with solar panels positioned on the southern-facing roofline appears. Off to the side, there’s a list of figures, some of which are scrolling. The top figure shows their home’s average monthly usage in kilowatt hours. The second figure settles—it’s how many kilowatt hours the solar panels can offset each year. The AI has calculated the numbers based on the size and orientation of the couple’s roof, regional weather patterns and trends, the performance of solar systems on nearby homes and current solar panel production data.
“Looks like you could reduce your home’s carbon footprint by about 45%. The monthly cost of the system is around $200, but your energy savings, on average, are even higher. Win win!” the associate says. “If you sign up now, we can have the system installed by….looks like late March. So, you’ll start getting the benefit of the summer sun right away. With the energy storage component of the system, you’ll have nice low bills for at least the first six months. Would you like to learn more? We can send someone out to your house next week to talk about the details real world. Plus, if you sign up in January, we’re offering two free passes to a Justin Bieber Meta Concert.”
“He’s still performing?” says Martha. “Huh.”
Saturday Evening, September 2040, Galveston, Texas
Ned is manning the network operations center at Gulf Energy, where he is directing his crew in the wake of a Category 4 hurricane. Six hours have passed since the storm blew through, and Gulf Energy’s self-healing grid has restored service to most of the city. There is, however, one neighborhood where a substation has gone down, leaving several hundred homes without power.
Earlier, using his AR headset, Ned piloted a drone through the substation. The utility’s digital twin and AI system identified the faulty piece of equipment by comparing the real-time views from the drone with the digital twin information. The AI made recommendations for next steps and Ned was able to identify the needed equipment before sending his crew to the location.
Ned now has a technician on site. Armed with the necessary parts, Mark is viewing the transformer through his AR headset while Ned, a seasoned power system engineer, observes from the NOC. Ned talks Mark through the steps he must take to replace the faulty component, and twenty minutes later the substation is back online.
Fanciful Farce or Fundamental Paradigm Shift?
All of these scenarios are feasible. Which and when and how exactly they might play out remains to be seen, but energy industry leaders today should nonetheless be thinking about how the Energy Metaverse might fundamentally change how their businesses operate and engage with customers and staff.
What is the Metaverse?
The Metaverse is a collective virtual open space, created by the convergence of virtually enhanced physical and digital reality. It is physically persistent and provides enhanced immersive experiences for participants via their personalized virtual Metaverse avatars. It is device-independent and not owned by any single vendor. In short, it is an independent virtual world, with an economy built on digital currency and nonfungible tokens (NFTs).
There isn’t one unified Metaverse today; rather, there are many digital virtual worlds existing in silos. According to some, the closest thing to a functioning Metaverse is in the game Minecraft, where ‘world seed’ NFTs allow purchasers to build their own virtual worlds on top of the gaming platform; these NFTs reportedly sell for nearly $50,000.
The vision, however, is that much like numerous independent online bulletin boards in the late nineteen eighties eventually converged on the internet a few years later, the Metaverse will ultimately house all these virtual worlds. And, while today’s metaverses may be clunky, compare the bulletin boards of old with the intuitive, graphically rich web sites of today or early ‘bag’ phones with the smart phones of today. A similar progression will no doubt occur in the Metaverse over time, and it may be coming sooner than you think: Gartner has estimated that by 2026, 25% of people will spend at least one hour a day in the Metaverse for work, shopping, education, social media, or entertainment.
The Metaverse Tech
The Metaverse will comprise several important emerging technologies, many of which are already familiar to energy industry executives:
Spatial technologies, e.g. GPS, LIDAR, GIS, Nanosatellites
Unmanned Aerial Systems (UAS) and Drones
Metanomics
Broadly, Metanomics describes the economic activity that will take place in the virtual Metaverse. Large companies are already making notable investments in virtual real estate, trademarks, and products to establish a foothold. Ethereum-based platforms like Decentraland are selling virtual plots for development and, according to JPMorgan, prices for virtual land doubled in the six-month period of June 2021 to December 2021. In June 2021, one land package in Decentraland sold for $913,000. The developer, Everyrealm, is creating an entire shopping district, dubbed Metajuku, inspired by Japan’s Harajuku shopping district.
The Metaverse could provide a massive opportunity for business-to-business enterprises. Take a manufacturer that is buying new parts for its equipment. Presently, the process involves receiving a physical brochure or an emailed PDF with static 2D pictures. In the metaverse, users could test the products in a virtual environment at lower cost. They can build a complex digital twin of a factory or industrial space at massive scale, and test how robotics systems will interact with the physical environment.
The Metaverse will also massively expand access to the marketplace for consumers and enterprises in emerging economies. The internet has already unlocked access to goods and services that were previously out of reach. Now, workers in low-income countries may be able to get jobs in western companies without having to emigrate. Educational opportunities will also expand, with VR worlds being a low-cost and effective way to access training.
Digital Twins
As connectivity and sensors proliferate throughout power grids and digital oilfields, major utilities and exploration and production companies are collecting exponentially growing datasets about their assets and their performance under various conditions. Histories are being built, in the cloud or vast data lakes. Gradually, these datasets are being cleansed and integrated into digital twins where powerful AI/ML applications ‘learn’ how assets behave under certain circumstances or operating challenges.
In addition to sensors on assets, drones, low earth nanosatellites, and/or LIDAR scans can all be used to feed data into the digital twin where the AI/ML can analyze the new information in real time. The software learns how the assets perform under various conditions and recommends—or automatically performs—the next best action. Furthermore, these digital twins can be used for scenario analysis, to determine how an asset or network of assets will perform under various situations. These capabilities can have a profound impact on long-term planning and determining how best to invest capital for optimal system performance.
Digital Twin Case Study
One GE customer, a large European TSO, expects to facilitate the transition to renewable energy while saving millions of dollars from improving its visibility into the transmission system. The increasing volume of wind connected to the customer’s network causes an increased risk of decreased inertia, making frequency regulation more difficult. The company was spending increasing amounts on maintaining a frequency reserve to balance the network, but its frequency management was based on estimations. By shifting its frequency management to a physics-based model, it is using synchrophasor data to get a true picture of inertia across the grid, effectively a systemwide digital twin. The TSO knows in real-time its frequency measurements, spends less money maintaining spinning reserves, connects more wind to the energy system, and better manages risk of decreased inertia.
Extended Reality
Utilities and the energy sector are not generally known as early adopters; however, hardware and software advances combined with falling costs are now opening the door for the industry to dabble with industrial XR technology. XR wearables present scalable solutions to previously intractable problems such as the industrywide brain drain. They promise to increase process efficiency, improve safety and compliance, and accelerate training in oilfields, mines, refineries, power plants, water treatment plants, and substations. XR solutions will be an integral component of the Energy Metaverse.
XR is an umbrella term that refers to any alteration of a user’s perception of their environment via technology. These technologies include more widely known subcategories such as AR and VR along with assisted and mixed reality (MR).
One of the greatest unrealized benefits of AR is its ability to accelerate training. In tests of AR-aided training, novice workers achieved proficiency in 30% less time compared to traditional training regimens. The Energy Metaverse will make the use of XR technologies de rigueur for onboarding, training, knowledge transfer and collaboration with remote experts. Other XR use cases for utilities and energy concerns include inspections, drone piloting, vegetation clearing, disaster recovery, GIS mapping and asset visualization, and inventory management, just to name a few.
XR Case Study
In 2020, American Electric Power (AEP) in Ohio began integrating AR technology into several use cases, including for new network deployment and maintenance on existing assets. Using Trimble Inc.’s SiteVision for Utilities AR technology, AEP’s engineering best practices group was able to design and stake new distribution poles and lines with full knowledge of the exact location (within one inch) of built and natural obstacles. It was able to reduce repeat site visits for missing or misplaced stakes, as well as get in-field review and approval by customers and landowners who might be affected by new poles and lines being placed on or near their property. The AR technology superimposed 3-D utility models against real-world views to enable accurate visualization of proposed and existing utility features, on-site and in real time.
AEP estimates it can reduce repeat site visits by 50% as well as engineering and construction rework by 25%. With AEP generating approximately 70,000 design and construction jobs every year, the utility has calculated a favorable ROI on both technology purchases and annual recurring AR subscriptions within a year of initial purchase and after three months of use each calendar year, respectively.
Looking forward, AEP sees widespread possibilities for AR applications in its operations. It has explored applications for EV charging stations, streetlight, and meter placement use cases and workflows as well as tracking underground electric assets as well as those of other utilities.
Unmanned Aerial Systems and Drones
The Energy Metaverse will depend on accurate, real-time data on physical systems and assets to maintain digital twins and feed AI/ML systems. Connected drone systems using advanced spatial technologies will play a role in gathering that data. They also offer a highly cost-effective method for physical asset inspections on a regular basis.
Unmanned aerial systems (UAS) are aerial robotic technology systems consisting of the drone or unmanned aerial vehicle (UAV), sensors, modular cameras, software, and other payloads.
Examples of Fixed-Wing, Multirotor, and Hybrid Vertical Takeoff and Landing UAV
For power utilities, UAS applications include inspection, monitoring, and maintenance of T&D and generation assets. T&D system inspections account for a large part of a utility’s annual budget and are mandated by various government agencies to occur on a regular schedule.
UAS can be used for cost efficient vegetation management, enabling more frequent inspections, and potentially preventing wildfires. UAVs can be deployed following natural disasters or storms for damage evaluation and outage restoration, particularly for areas that are dangerous or inaccessible for manual inspection. Using UAVs for storm assessment and outage restoration can also result in increased situational awareness and faster reconnection times.
In power plants, UAVs can perform damage assessment and performance monitoring on cooling structures, inlets, outlets, boiler and chimney stacks, and equipment and material integrity. They provide access to hard-to-reach locations that involve a high level of risk for workers such as wind turbine blades or hydropower dams at power plants and material inspections at nuclear power plants. In large-scale solar installations, a UAV can inspect upward of 4,000 panels per hour whereas, on average, a human can inspect just 60 PV panels per hour.
AI/ML
The collection of large, timely and accurate datasets, such as those enabled by UAS or nanosatellites, has little value until it is combined with advanced analytics and machine learning. Combined with ultra-fast connectivity (e.g. 5G wireless networks), AI/ML technology promises to power the energy Metaverse in intelligent and intuitive ways.
AI technology has profound implications for the operation of electric T&D networks. Traditional decision-making associated with grid management is not expected to remain adequate in the near future. Utilities will likely become increasingly dependent on AI‑based solutions to incorporate DER at an accelerating pace while maintaining acceptable performance metrics and keeping costs low. AI technologies for T&D management can help utilities minimize outages, make mobile workers more effective, improve load planning, manage real-time power quality, perform predictive asset maintenance, and more. In the customer experience realm, AI-powered smart assistants in the Metaverse will replace the ubiquitous online customer service chat boxes of today (that often can’t actually answer your questions).
Market Outlook for Energy Metaverse Technologies
The energy industry is already investing in the Energy Metaverse, and Guidehouse Insights expects those investments to increase nearly sixfold by 2030, to more than $70 billion. Considering that this includes only the spend on foundational Metaverse technologies—and doesn’t incorporate future commerce platforms, marketing efforts, virtual offerings, etc.—the actual long-term economic activity revolving around the Energy Metaverse could easily become an order of magnitude larger in just a few decades.
Chart 1
Energy and Utility Industry Metaverse Investments, Global Markets: 2021-2030
Predicting exactly how this emerging paradigm will impact traditional energy industry companies is imperfect at best. Nonetheless, utility and other energy executives should be considering that end game as they make plans for incremental investments today. The advent of a fully functional and secure Energy Metaverse could provide innumerable benefits to the industry and its customers and employees. In addition to efficiency, resiliency, improved environmental outcomes and worker safety, the Energy Metaverse will open up new ways for the industry to engage with customers, regulators and staff.
