Internet of Things (IoT) will redefine the way business is being done across different verticals. Business models will transform from being product based to service and outcome based driven by analytics.

Industry convergence is synonymous with the emerging concept of IoT enabling M2M communications for better business decisions. For example, SKF which has recently joined the IoT revolution monitors the performance of its bearings and machines using 45 different iPad applications. This enables SKF to offer value added services to its customers remotely. This seamlessness of information and communication technologies (ICT) enables analytics to be provided at the edge of the network. Although in the early stage of growth, technologies such as radio frequency identification (RFID) are increasingly being used in industrial automation these days.

With Wi-FI becoming increasingly ubiquitous, various building blocks of IoT such as RFID, sensors, mobile, cloud storage, and big data analytics have been witnessing an uptake across industries. Growing sophistication and economic viability of RFID and RFID based sensors drive their use in applications across the industrial vertical.

Urbanisation has been a major factor behind energy demand across various regions, especially among the emerging economies. A rise in population over the next decade, especially in the emerging economies, is expected to contribute to increasing demand for electricity in these regions. Over the next two decades, the traditionally developed regions will lose ground to the emerging markets where rapid urbanisation and the creation of a middle class will drive electricity demand. With the energy industry’s measured acceptance of this new technology on the rise, the adoption trend is expected to witness a rising curve in the long term.

Industry Challenges

RFID vendors must understand and adhere to these regulations and directives to enable them in offering solutions to this industry. The level of knowledge and skills needed to build a new technology is high, making the entry barriers close to impenetrable, without a formal agreement with existing participants on a transfer of knowledge. As the industry deals with hazardous materials, a number of regulations and directives exist for protecting the industry from unwarranted calamities.

With a number of these projects processed through tenders, system integrators are expected to hold an important position in the market. Hence, choice of system integrators remains a key factor in developing confidence and loyalty among end users. With emerging economies expected to witness a rise in energy demand, technical and process know-how of system integrators holds the key to greater adoption.

Threat of energy theft is becoming increasingly prominent in certain geographies and monitoring of assets in inaccessible locations is considered a challenge to the energy industry.

RFID Based Sensors and Active RFID Technology Expected to Augment Growth

Key applications for RFID in the energy industry revolve around asset and personnel tracking. Real time monitoring of assets and personnel enables customers to prevent untoward damages to either assets or personnel. The use of real-time locating systems (RTLS) to monitor and track hazardous materials is expected to improve the active RFID adoption rate. Features such as real-time locating and environment-sensing capabilities make it an obvious choice for more critical applications.

Time is money in the energy industry and any downtime would result in losses in the scale of several millions. RFID is steadily gaining momentum in the energy industry as customers start focusing on relying on technologies to improve process efficiency. Key developments in the RFID space can improve end users’ asset and material visibility across the value chain. Active RFID has been the dominant technology used because of its advantages of longer read ranges, specifically in personnel monitoring and tracking applications. Sensor-augmented RFID is increasingly being deployed as it provides sensing capability in addition to tracking and tracing assets.


As is evident from the last decade, increasing awareness about technology and its benefits, coupled with market trends, continues to drive adoption levels of RFID in this industry. With the industry’s application suite requiring the services of RFID technology, the convergence of this technology with existing infrastructure and other technologies is expected to boost the adoption rate. Thus, the market for RFID in the energy industry is still in its early stages but has considerable potential.

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