Hello and welcome to the latest episode in our podcast series on the Energy Transition. Looking at the innovation taking place in the industry as we move towards a low carbon smarter energy system, which is more decentralised and digitised.
My name is Steve Jennings and I lead PwC’s Energy and Utilities Practice in the UK.
In this episode, we are going to be talking about one of the most exciting and emerging technologies, the use of drones in energy. Recently we published a report on this topic, ‘Clarity From Above’, which estimated that over 40 billion dollars of cost could be saved by the use of drone technology in the energy sector.
I am delighted to be joined today by Elaine Whyte, UK Drones Leader at PwC and Head of our newly launched Drones Team in the UK; and Jan Sisson, Owner and Pilot of HIGHER EYES, who provide airborne engineering inspections.
So Elaine, perhaps you could share with us what you are seeing in the market? What are the practical uses of drone technology in the energy sector?
Drones are a way of capturing data, particularly when you are dealing with large infrastructure, disperse locations, all of which you would say epitomise utility market. They are inexpensive, they are agile, and are rapid to deploy.
If you put all these together, you can see how drones can be used to great effect, to capture data on the infrastructure that is within the utility space. This is particularly useful when you consider the tightening profit margins that are within that space at the moment, and also where the great deal of that cost base is on maintaining those assets.
So, if we look at perhaps maintenance management. Maintenance of these assets is complex. There is lots of cost that is met when you are having to shut down the asset in order to survey them and understand where the faults may arise.
A drone can be used to survey that asset without having to shut it down and this allows the client to capture information whilst that asset is still creating the revenue and therefore it avoids the cost for them.
I can see the value in maintenance management, other examples of use of drone technology or potential use of drone technologies in the sector?
You see a great deal of construction, I think, within the utilities sector as well. So, if you consider how drones can be used for construction, they can be used to capture an image of the site before the construction takes place, so that you can truly understand the challenges, the obstacles that you may have on that particular site.
Then as the construction is undertaken, you can take periodic reviews, using a drone and you can compare how that construction project is going against your project plan. This allows you as a management to have early intervention if things aren’t going to the plan as expected.
You can also create a golden record of what’s taking place on that site and this can be used potentially in future disputes that happen after construction has been completed.
Then you have some wider uses within utility sector, such as asset infantry management and potential vegetation management, and even disaster surveying, when you want to get an understanding of how your infrastructure is positioned post a disaster has taken place.
Some great examples there of the use of drones, and I am sure we are going to return to that when Jan talks to us about his company, but I also mentioned in my introduction that you lead our Drones Team in the UK.
Perhaps you could share with our listeners, why we established it, what we are doing, and what are our clients talking to us about?
We recognise that our clients are been disrupted by technology, and it’s important that we understand the disruption that’s taking place, but also that we are able to disrupt ourselves as a firm. We see significant potential within the drone market and that’s why we have invested in this team moving forward.
Ultimately we deal in data, and drones is just a very agile, different way to capture data that gives our clients a new and fresh insight into their business.
We are using this technology, we are combining it with our business understanding, putting the human insight into it as well to give our clients that competitive edge.
Jan welcome, delighted that you could join us.
I am excited to hear about your company HIGHER EYES. Perhaps you could share with our listeners a little bit about the company and the services that you provide.
Sure, okay so HIGHER EYES is a niche provider of inspection services using drones for the energy sector. We are two partners, we are both qualified pilots, with a lot of drone experience.
The idea came originally from seeing a drone in action in Iceland, and I combined it with my own background in renewable energy and engineering, thinking that we could do some interesting things, particularly in the world of operations and maintenance.
One of the core activities for HIGHER EYES is carrying out inspections in solar farms using a thermal imaging camera mounted on a drone. That allows us to look at the solar modules and spot any faults, and therefore reduce the revenue losses for the customer or the owner, but some of the other things we are doing increasingly are supporting property developers and energy construction projects with mapping and 3D modelling using drones for the development sites.
You touched on solar farms there, and across renewable assets generally, there has been a reduction in the returns. The available margins have become tighter. Across the whole of the energy sector, we are seeing, whether its commodity prices, or regulatory pressure, or reduction in government subsidies are making returns too much tighter than they were.
Do you think that’s creating a greater use for drone technology?
It’s still early days, but a lot of customer is starting to get very excited about drones. They really like the technology. They like the look of it. Actually when they come and spend a bit of time and see how it works, they are sometimes initially put off because they see there is actually a lot more to it than just turn up, get the drone out in the boot of your car and off you go.
Whilst there is, sort of, interest in the technology, I think customers are beginning to realise, or asset owners are beginning to realise the possibilities; and what they can benefit from in terms of the data they can gather in and the view that they get using a drone.
The word drone, I like the word drone, unmanned aerial vehicle, but a lot of people say drones.
A drone is a device to do a dull and repetitive job that nobody else wants to do, and that’s exactly what they are. We can do things with drones. We can do it quickly, safely, reliably, much better than putting a human in that place. Let me give you a very specific example. So, one of the things we do most, as I mentioned, is infrared inspections on solar farms. Take an average solar farm, let’s say 30 megawatts. That’s got 50 to 60 thousand individual solar panels or photovoltaic modules. We can use a drone to fly a pre-programmed fly path and carry out an inspection almost autonomously, just with a pilot supervising it.
We can then bring that data back and we can analyse it rapidly, and we can look for faults. So, if we see faults, hotspots in the solar panels, that means the customer is potentially loosing energy generation revenue. They could use the information from the inspection to prevent that happening and effectively maximise their margins.
In the past it used to be the case that thermal imaging inspections on solar farms were done using a hand held camera and somebody walking around, which is an extremely tedious job, takes days and days; and with the best will in the world, we are all human, we make mistakes, nobody wants to spend days and days looking at 60 thousand things that all look the same, we will inevitably miss a few. So, using a drone is a very good application there.
We worked out recently that an average defect, the types that we would find on a solar farm, would cost around 500 pounds a year typically in terms of lost electricity generation.
So, you can see, if we typically find tens or sometimes even hundreds of defects during an inspection that could be very beneficial. What you see now is that customers are suspending their maintenance budget rather than doing a 10% sample every year, they actually want 100% done with a drone, because it’s fast and is quite cost effective, and they get all the information. So, I think there is a tangible benefit there that really outweighs the cost.
It’s a great example of delivering tangible benefits in drone technology. Can you give us some other examples, either ones that you currently see or ones that you perhaps foresee the future?
Yeah, there is a lot of interesting different areas, but some examples would be inspecting wind turbine blades, on shore or off shore turbines, and high voltage powerline inspections. So, with those things they are very difficult to get to, you need a lot of specialist equipments and a lot of time if you are going to put a human being there to do an inspection. If you can use a drone that can be a job of minutes.
Really that can have a hugely beneficial impact. There are a few things that are almost unique to using a drone. So, for example, if you wanted to stand next to your customer on a solar farm, and have a quick look around the fence without moving from the spot, well you could do that in 10 minutes with the drone.
If you are a bit worried about the tip of one of your turbine blades that may have been struck by lightning, again that’s a 5 minute job for a drone, up you go, photos, videos, come back, you’ve got all the information you would need to then organise the repair.
Want to take an aerial photo of a large energy asset for, maybe, the front cover of a company report, and that’s a very easy use of the technology. Then also there are things like the 3D modelling that we can do now, is incredibly quick. We can produce a 3D model of a construction site, where you can see every blade of grass, every stone. It really is quite straight forward if you have the, sort of, technical knowhow to go with it. Then you can use that data in a consistent building information management system, there is lots of potential uses.
Ultimately, where you have these diminishing project returns and the belt tightening in the energy sector, drones can really get you a better bank for the buck if you like.
A lot to offer, clearly has potential to offer a lot, particularly around cost savings that you’ve talked about and delivering value.
But listening to what you are saying Jan, I can’t help thinking about some of the risks around use of drone technology, and there are general concerns expressed around privacy and around data protection.
Maybe I could come back to you Elaine, in terms of UK organisations to really take advantage of drone technology, I assume it’s vital to have the right standards and regulation in place. How do they go about managing those risks?
I think of the risks of operating drones within your business in three different distinct areas. Firstly you are operating in the air. This means you have to be compliant with the Civil Aviation Authority, the CAA. We’ve heard how Jan is a certified CAA commercial drone pilot. This is necessary to ensure that you can be insured moving forward.
So, as a client they need to consider that they are going to be operating assets in the air and they need to be compliant with the CAA regulation. At this moment in time that provide some limitations. So, if I take that to the utility sector, you have to, at this moment in time, be able to fly that drone within visual line of sight. This limits, perhaps, the use cases if you are wanting to inspect a long stretch of powerline. You won’t be able to do that without landing the drone and then hopping along the land to be able to fly at various different points so that remains within visual line of sight.
That’s the first area, that’s operating in the air, and you have to consider the complications and the new regulator for that space.
The second one is, you are dealing with a lot of data, and you rightfully touch on, you have privacy laws, you have to apply those laws, but you also have to be cognisant of the cyber risk, and make sure that that data is protected in the right way for the clients moving forward.
But all of this combined is my third point, which is the totality of the risk management. You can be compliant with the regulator, but there are still other things that you can do to mitigate against that risk.
So, you want to be able to assure the safety of your operating system, you need insurance clearly; and then I would ask the question, do you really know who is operating within your airspace; and there are ways now that you can detect whether there are drones flying within your airspace, and that could present our clients moving forward with an additional level of risk that at this moment in time they are just not aware of.
Are our clients mainly talking to us about managing those risks right now or are we still at the point of clients talking to us about how they can deliver value from the technology?
Mostly the latter there, in that our clients are currently using drones at project level, and we are having discussions with them about how they can raise the drone data, the value of that data that they are gaining to a more strategic level by using it across their portfolio, not just at project level, but we are introducing into those conversations the additional risks, particularly perhaps IPR espionage that could be undertaken by use of drones in the airspace.
Okay, thank you.
Jan what would your advice be to our clients listing or potential clients, perhaps listing, in terms of how they can maximise the value from use of drone technology?
What my advice to maximise the value would be to start thinking from a business perspective before you start thinking about the technology itself. So, can you reduce your costs, increase your revenues, or reduce the risk in your business, and I am sure you can in most businesses. If so, in which way could you then use, perhaps, automated technology, looking at things from above or different sensors.
When you look at those applications, then that would crystallise out some potential uses of drones, and what I would then recommend is you go and find somebody, who has got experience of what you want to do and go and talk to them.
One of the things that businesses think is they need to have their own drone team, and that’s not necessary, and if you actually look at what you need to do to set that up, it is relatively onerous in terms of the management commitment to do that, it’s not just buying the hardware, but there is a lot of training and certification to go with it.
If you’re thinking at going in that direction, then I would recommend finding a trusted partner company to work with, at least initially, who can then advice you in the longer term, maybe even about the new technologies that come out as well.
Ultimately, my advice as well would be ‘remember that when you enter the world of drones, you are actually entering the world of commercial aviation’. As Elaine mentioned that’s not such a straightforward thing and it’s something that people should be aware of before they get into it.
So, clearly risks, I am hearing risks, but I am also hearing many viable existing and future applications for the energy industry, and it’s clear that drones do have the potential to disrupt and generate significant value across industry, and I am sure we will see significant market growth in the coming years as organisations change and develop their strategies to embed these new technologies into their ways of working.
Jan thank you, Elaine thank you very much for joining us.
If you would like more information on drones, I would encourage you to take a look at our report, ‘Clarity From Above’ that’s available on our podcast webpage.
I hope you enjoyed this podcast, and please look out for the next episode in energy transition series.