A New Digital Space RaceThe evolution of the operational backbone of physical spaces, driven by advances in AI, automation, energy technologies, connectivity, and data-driven predictions.
Infrastructure has been digitalizing for decades, but there are fresh dimensions to the new digital space race. Years of incremental progress and wider technological advances have led to a growing maturity in digital applications, which are now starting to deliver on long-standing promises.
“There is transformational progress being made through the exponential growth of computing power, cloud, digitalization, and emerging technologies,” says Steven Velegrinis, Head of Masterplanning at AECOM, a multinational engineering firm. “It has already transformed what our team can do, and it will grow even more powerful over the next five years.”
There is transformational progress being made through the exponential growth of computing power, cloud, digitalization, and emerging technologies.Steven Velegrinis, Head of Masterplanning at AECOM
At the same time, two new drivers of digitalization have emerged in recent years. The first is the pandemic, which has demonstrated the value of automation, remote monitoring, data-driven prediction, digitally enabled collaboration, and more. As a result, many organizational barriers to progress have fallen away.
What is the New Space Race?
This thought leadership study reveals how infrastructure stakeholders view the immediate and longer-term future of our built environment and energy systems. Discover fresh perspectives on how our infrastructure will be reshaped by the global pandemic, a new era of digitalization and the urgent need to decarbonize.
The energy transition is digital
The second new driver is the increased urgency of climate action and the energy transition. The world is building new energy systems that are increasingly complex, decentralized and diversified. Grids need to support the integration of renewables and energy storage systems, while managing an historic shift towards electrification, including surging demand for electric vehicle charging networks. Consumers are becoming prosumers, businesses are building microgrids, and utilities are under pressure to enable multi-directional flows of both energy and information.
The model of the past is like a river of electricity flowing from a power station, through the rapids of sub-stations, and into the many little streams that make up an analog grid. The future looks more like a water park, with flows from multiple different sources and directions, some up, some down, some combining, some disconnected, with clever plumbing and pools of stored energy to help manage variations in supply and demand.
67% of energy infrastructure stakeholders believe net zero energy is impossible without digitalization.
Digital technologies will support every element of the new clean energy systems: AI algorithms optimize wind turbines; smart grids and virtual power plants balance multi-directional energy flows; building management systems adapt proactively to save power. Everywhere you look, digitalization can help us develop more intelligent and sustainable energy systems.
In fact, most energy infrastructure stakeholders in our survey (67%) believe net zero energy is impossible without digitalization. Plus, when we asked energy respondents which strategic recommendations they would make for the biggest city in their country, the top five (out of 12 strategies) were technology enablers, which were favored ahead of legislative levers which made up four of the bottom-five (see Fig. 2.1).
Towards more data-driven energy systems
However, like any race, change needs to be fast, and the harder organizations push, the tougher it gets. “The speed of change, driven by net zero, is a huge challenge,” says Xiaohu Tao, Vice President, Business Innovation and Digital, in Energy Networks at E.ON. “For example, in 2021 e-car sales are growing rapidly. We now have over one million e-cars on German roads, and as a result of this expansion, we have needed to review our strategy many times this year.”
So much change is happening in the low-voltage grids. You have prosumers, e-cars, and much more. But in most of these areas we are blind.Dr. Tao Xiaohu, Vice President, Business Innovation and Digital, in Energy Networks at E.ON
A big part of this challenge is that e-cars need to be charged within low-voltage grid, where many energy companies lack granular information and control, as it was not necessary in the past. “So much change is happening in the low-voltage grids that power homes and businesses, you have prosumers, e-cars, solar generation, heat-pump systems, batteries, and much more,” says Tao.
“But in most of these areas of the low-voltage grid, we are blind. Once you go beyond major junctions, there is very limited information, no sensors, no switches, and no control. Huge investments are needed in low-voltage infrastructure, and in smart grids especially, to enable the transition and to support our customers.”
There may be more data at the other end of the energy value chain – in generation to high voltage transmission – but companies are only just beginning to benefit from it. “Over half of the energy that is produced is released as waste heat into the atmosphere or waterways,” says Michael Webber, Josey Centennial Professor in Energy Resources, Mechanical Engineering at The University of Texas at Austin and former chief science and technology officer at ENGIE, a multinational energy company. “The right data can help us extract value from that waste. Data can help us to refine our existing capabilities so that energy is produced more efficiently and more reliably,” he says.
More value in data
Across the world of infrastructure much of the digital transformation journey still lies ahead. While 71% of all respondents to our survey believe their organization is an industry leader in digital transformation, this needs to be set in context: some 63% believe that the digitalization of buildings and power networks is lagging behind the progress of digitalization in most other industries (see Fig. 2.2). Being industry-leading in an infrastructure sector, may unfortunately still be short of current best practice.
Digitally advanced organizations are data-driven, and it is therefore of more specific concern that only 31% of our respondents appear to have made full use of the data they have, with nearly half reporting that they have not yet done so.
63% believe that the digitalization of buildings and power networks is lagging behind the progress of digitalization in most other industries
“The industry has a lot of data. It is shown on dashboards, but unfortunately there is often no action taken that will lead to a better return on investment, more sustainable operations, or any other benefit,” says Ali Alsuwaidi, vice-president of the Middle East Facilities Management Association, an organization dedicated to best practice in the facilities management industry.
Progress relies on better benchmarks
Making more of internal data like this may rely on many things, but one is access to wider datasets that provide points of comparison. “If you only have data from one building, you cannot really take proactive actions”, says Alsuwaidi. “You need relevant benchmarks. You need data from other buildings with similar operational parameters to help us make the right decisions and help to understand the issues. Is it a skill problem, a design issue, an operational issue, the surrounding environment? There are a lot of variables. Right now, we have a lot of information, but too often it is being used in isolation.”
Part of the problem is that buildings have different owners, and data-sharing between them is sometimes – rightly or wrongly – prohibited by policies. But many organizations that own two or more comparable assets have still not yet used comparative data to diagnose problems and optimize systems. The new digital space race will change this.
If you only have data from one building, you cannot really take proactive actions.Ali Alsuwaidi, vice-president of the Middle East Facilities Management Association
“We want to get knowledge about how our tenants are using buildings to make the next building even better,” says Christian Waglechner, senior development manager at CA Immobilien Anlagen, an Austrian real estate company operating in several European countries. “We should not just implement 3,000 sensors to monitor one building. We should also do it to compare that data to other buildings inside our portfolio, and then outside, in similar locations.”
Drawing from the full toolbox
In terms of specific technologies, AI-driven prediction and automation is expected to have the broadest impact on infrastructure assets over the next five years. New materials is a close second, and several others – from blockchain to digital twins – make the top three for at least a quarter of respondents (see Fig. 2.3).
These specific breakthrough technologies or advanced methods are, like the tools of a carpenter, not as impressive in isolation, as the functional creations that can be made by using them together. The truly transformative power comes when organizations pursue important infrastructure goals with access to the whole, maturing, digital toolbox.
Digital twins are an interesting example because they draw together many different technologies to produce tools that help us overcome a diverse range of challenges at once. They are a powerful way to integrate siloed datasets, help us visualize vast amounts of abstract information, they enhance real-time monitoring, improve resilience, and support infinite simulations of possible future scenarios.
“I think we will start to see digital twins really becoming the preferred tool for urban planning at the city and even national level.”Steven Velegrinis, Head of Masterplanning at AECOM
Digital twins can also be created to emulate any type of infrastructure asset – from a small factory to a giant power grid - and can also unify multiple infrastructure types, creating digital twins of whole cities and even national and international infrastructure systems.
“In the last two years, digital twins of cities have become much more important in the management of infrastructure management and urban planning,” says Velegrinis, “I think we will start to see entire city digital twins really becoming the preferred tool for urban planning at the city and even national level in the coming years.”
The innovation mindset
This process never stops. Even the most advanced digital twins will be extended or enhanced by layering on further innovations or a technology from another domain. Velegrinis describes a case in point: “Digital twins are now being extended using things like game rendering engines, Unreal Engine for example, to create a full digital model of a city that people can experience with virtual reality from anywhere in the world.”
Sometimes people only think about what has been done before, not about developing something new.Christian Waglechner, senior development manager, CA Immobilien Anlagen AG
Developing our digital solutions in this way relies on an innovation mindset within organizations. This can be a challenge of its own. “It is often a risk to change, and not everybody likes to be an entrepreneur or an innovator,” says Waglechner. “Sometimes people only think about what has been done before, not about developing something new. But making progress requires us to do something new, it always has.”
We would like to extend a special thank you to the diverse set of industry leaders and experts who shared their ideas and insights with us as part of this study.
- Ali Alsuwaidi, vice-president of the Middle East Facilities Management Association
- Wayne Butcher, director at Grant Thornton UK LLP
- Ewan Jones, Partner at Grimshaw
- Jeremy Kelly, Research Director at JLL
- Kerstin Sailer, Co-Founder of Brainybirdz and Professor in the Sociology of Architecture at the Bartlett School of Architecture, University College London
- Maia Small, Manager, policies and strategies at San Francisco Planning
- Steven Velegrinis, Head of Masterplanning at AECOM
- Christian Waglechner, senior development manager at CA Immobilien Anlagen AG (CA Immo)
- Michael Webber, Josey Centennial Professor in energy resources, mechanical engineering at the University of Texas at Austin, and former chief science and technology officer at ENGIE
- Xiaohu Tao, Vice President, Business Innovation and Digital, in Energy Networks at E.ON
This thought leadership study is based on a survey, in-depth interviews and desk research. It is not an academic or scientific research paper. Our goal is not to provide any final answers, but rather to start conversations, stimulate thought, and encourage infrastructure stakeholders to reflect on what today’s megatrends mean for the future of our energy system and built environment.
The survey included 501 respondents from 10 countries. The countries involved include those large-scale and/or highly advanced infrastructure assets and ambitions. It was fielded in June and July 2021.