Domain Knowledge Bite: The main difference between digitization and digitalization to solve future challenges in the wind energy industry tools

DK bite 1

Changes in subsidy and revenue generation mechanisms, alongside increases in raw materials costs in the wind energy industry, are leading to pressure across the value chain to reduce Capital Expenditure (capex) and Operational Expenditure (opex).

Onshore global Operation & Maintenance unitary expenditure will decline by 5% between 2019 to 2029, while offshore global opex per megawatt will drop on average by 20% between 2020 and 2029. At the same time, onshore Levelized Cost of Energy (LCoE) in Europe will drop by 37% by 2050 and offshore fixed LCoE in Europe will drop by 54% by 2050.

The industry is planning to reduce costs on the operational side and lower LCoE while the existing fleet is aging, new giant wind turbines are entering the market, inflation and raw material costs are hitting sky high values. This scenario poses a significant challenge due to the contrasting factors affecting the wind energy industry.

All in all, it seems like optimizing and enabling efficiency in the preconstruction and postconstruction phases are key. Many have indicated digitalization as the big opportunity and a viable solution to solve the challenge.


Worker of a wind power plant in a yellow wheat field

Difference between digitization and digitalization 

If we want to analyse where the opportunity really lies, we will have to look at two main topics: digitization and digitalization.

The wind industry has been using different digital tools for a long time. For example, the design of wind turbines has been carried out using Computer Aided Design (CAD) for many years and almost from the industry’s onset.

SCADA systems, in a similar way, have been used for decades to monitor the behaviour and performance of the machines.

Digitalization goes a step further and enables the use of digital tools to enable multiple parties to work on specific tasks/issues.

Digital twins 

If we consider digital twins, they are virtual representations of operating assets that can be used for many purposes. As an example, they are very valuable in health monitoring (life assessment and risk assessment) as they enable users to get useful insights based on the combination of operational data and analytical models. Digital can also help us make future predictions and decisions about the different operating strategies to implement to reach specific targets, they are like a “time machines” capable of looking at what happened in the past and use this information to predict what is likely to happen in the future.

While the industry can benefit from a mix of “old and new tools” and connecting them in a new way, we should also consider if this is what will really solve the challenges the wind energy industry is facing. Do we really think that OEMs on their own can ensure drops in unitary operation and maintenance costs, opex and LCoE while inflation rates and raw material costs are raising out of control? Do we believe that owners/operators can either create their own tools or buy 3rd party solutions, digitize knowledge, and achieve the steep efficiency gains that we are meant to see by mid-century?

In my personal view I don’t think that digitization is enough. I believe that digitalization on the contrary is an opportunity to really improve the way we do things, solve challenges, and generate efficiency. The main difference is the human element and cooperation achieved using the digitized means at our disposal.

At DNV and GreenPowerMonitor we use digital twins to link up software experts, domain experts, customers, and 3rd parties. Digitalization is used to gain a seamless benefit from linking up live data coming from the assets and knowledge in the form of advanced analytics algorithms developed by in house experts, 3rd parties and by our customers. The end results are extraordinary when we consider the enhanced cooperation opportunities and the value offered by actionable insights based on best-in-class algorithms.

It might sound counterintuitive, but using digital tools is helping to collate knowledge from a cohort of human beings for the bigger benefit of the industry.

Contact our expert 

For more information, you can contact Giuseppe Ferraro, Director of Digitalization and Renewables Optimization



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