IoT Explained
03 July 2025
Reading Time: 7 mins
Eseye
IoT Hardware and Connectivity Specialists
LinkedInIn recent years, a combination of geopolitical factors, climate change, and the ongoing transition to renewable energy have contributed to global instability and volatility in the energy markets. With little signs of change coming, this volatility is expected to endure for years to come, prompting investment and investigation into technologies like IoT to help manage the impact on the grid and bring about a more cost-effective and reliable energy infrastructure.
Global energy volatility is the new normal
It’s difficult to put a finger on a single contributing factor as the major source of energy volatility, but geopolitics is certainly a contender. In the last few years, geopolitics has become a significant risk factor in global movements and pricing of gas, oil, and electricity.
In 2022 we had the Russian invasion of Ukraine, which distorted energy prices of supply flowing through and originating in the region. In 2025, the Trump administration triggered turmoil in the commodities sector through tariffs, trade wars, and fears of recession. By mid-2025, we saw the escalating conflict in the Middle East, which has had a global impact on energy supply and pricing.
Meanwhile, climate change is having adverse effects both on the supply and demand side, with extreme weather events not just making the harnessing of natural energy sources like hydro and wind more challenging and unpredictable, but increased floods and hurricanes frequently damaging the infrastructure. Furthermore, wild temperature variations such as extreme heat or cold, especially out of season or atypical for certain geographies also drive unexpected demand and peaks in energy usage for heating and cooling.
There’s also the transition to green or renewable energy sources themselves. Largely dependent on natural factors such as sun, wind, and water, predictable generation of power is difficult. Sometimes there may be an excess of energy produced, so much so in fact that prices plummet and may even hit negative numbers. At other times there may be a shortage of natural power, reintroducing a reliance on legacy sources like fossil fuels and creating sharp increases in pricing.
Finally, we have unusual phenomena, global events, or trends. This includes things like the Covid pandemic, which while it had no direct impact on the energy market itself, was responsible for the largest global change in energy consuming behaviors in modern history. Energy grids that for decades had supported populations consuming energy in metropolitan centers during the workday, suddenly had to contend with massive demand from residential grids for weeks at a time.
The global trend of AI adoption is another example of additional stress on the power grid, with giant, energy-hungry data centers becoming more demanding. Projections published by Lawrence Berkeley National Laboratory anticipate that by 2028 AI usage alone could consume as much electricity annually as 22% of all US households.
The role of M2M and IoT in energy infrastructure
Both machine-to-machine (M2M) and Internet of Things (IoT) have a significant role to play in the management and monitoring of energy infrastructure going forward.
While fundamentally part of the same broader ecosystem, M2M differs slightly in scope in that it is more responsible for point-to-point device communication, such as between smart meters and the grid, whereas IoT encompasses more complex capabilities involving hardware, software, and data analytics.
We have an in-depth guide to the differences between M2M and IoT, here. But both technologies are vital for the future operation of national and local grids, and for integrating Distributed Energy Resources (DERs) such as rooftop solar panels and electric vehicles (EVs) into those grids, transforming them into highly decentralized networks, providing visibility into real-time energy flows and enabling localized balancing of supply and demand.
Smart meters
Historically, energy utilities have sent employees to read meters, which is expensive and may require access to premises, or rely on customers to self-report readings; both scenarios are unreliable, contributing to increased overheads and decreased customer satisfaction.
As a result, smart metering is widely regarded as the cornerstone for future energy grids and is currently being deployed all over the developed and developing world. Smart electricity meter penetration rate in Europe reached 63% at the end of 2024, according to Berg Insight.
Distributed Energy Resources (DER)
Distributed Energy Resources, or DERs, are small-scale power generation and storage often involving technologies like solar panels, wind turbines, and batteries. In many cases, the smaller the DER, the more likely it is to be owned and operated by a consumer – think roof mounted solar panels, or an EV in the driveway.
While Demand Response (DR) programs have been common for many years, designed to incentivize consumers to shift energy usage away from peak consumption times and reduce stress on the grid, DERs significantly increase the complexity of demand-side control by introducing more generation assets, a lot of which are owned by the end consumer of the power.
M2M and IoT both have a role to play here in managing and monitoring the infrastructure, especially that which is beyond the ownership of the grid operator. IoT will facilitate vehicle-to-grid (V2G) services as EV batteries evolve into mobile energy storage units, managing bidirectional energy flows and optimizing charging schedules.
For consumers with generation technologies such as solar panels, it’s becoming increasingly common for batteries to be installed in the home to store energy that can be sold on to the grid. These DERs are combined into functional groups that will likely represent a large percentage of future energy generation and will somehow have to be managed by the grid operator.
To summarize, DERs are small-scale energy generation and storage technologies located close to the point of consumption and include technologies like solar panels, wind turbines, EVs and battery storage systems, and combined heat and power (CHP) units. These highly decentralized units can be individually owned or form part of a larger network. The role of IoT is to capture this energy to enhance grid stability, further reduce reliance on centralized power plants, and help provide backup power.
While an innovative development, DERs introduce several challenges, however. Not least of which is the fact that such resources are not owned by the utility but by the customer, so some kind of bi-directional communication and management needs to happen.
Additionally, we are now moving the grid from a centralized model based around power stations, to thousands, if not millions, of small-scale systems. This, however, is where IoT can excel – in addressing and controlling every one of them from a data connectivity, analysis, and security perspective.
Home Energy Management Systems (HEMS)
Although part of the DER ecosystem, Home Energy Management Systems (HEMS) form their own sub-ecosystem of consumer-friendly hardware and software combinations that assist consumers in participating in energy production, storage, and contribution.
This is important because the residential sector accounts for about a quarter of the total energy consumption in North America and Europe and will only skyrocket with the adoption of electric cars and heat pumps expected to grow fast.
HEMS are defined by Berg Insight as a system that at minimum consists of a solar panel PV system, battery storage system and a web-based management portal or app that allows for remote monitoring and control. Many HEMS also integrate backup generators, EV chargers, heat pumps, home appliances and other connected products.
The objective is a consumer-friendly technology that enables households to become active participants in the electricity market, reducing the monthly electricity bill and lessening the strain on the electricity grid during hours of high electricity demand.
Benefits of IoT and M2M in energy infrastructure
M2M and IoT combine to deliver connected devices, sensors, and actuators to control and monitor the environment, and the things that generate and consume power within it. This can be on an industrial scale in the power plants themselves, through consumer and business monitoring of usage, down to the controls used in smart buildings to ensure lights are turned off when no one is using a room.
But this also extends to:
- Real-time grid monitoring and fault detection.
- Reducing costs and managing peak demand.
- Supporting the transition to renewables.
- Integrating solar, wind, and EV charging stations into traditional grid infrastructure.
- Remote monitoring and maintenance of DERs.
- Automating commercial and industrial processes, resource utilization, and minimizing energy wastage.
- Real-time data analytics to provide insights into energy consumption patterns, enabling better demand forecasting and load balancing.
- Predictive maintenance to identify potential infrastructure or power-generation issues before they lead to costly failures.
- Integration of smart home devices like thermostats, lighting controls, and energy management systems that offer convenience, control, and cost savings.
M2M as the backbone of energy resilience
In the last few years, the world has experienced surging energy prices post-Covid due to the conflict in Russia-Ukraine and the Middle East, grid instability in regions like California, South Africa, and Pakistan, fuel shortages and price shocks in Europe and parts of Asia, and significant geopolitical volatility.
All of these factors look set to continue against a backdrop of environmental uncertainty, while humanity looks to transition to more renewable and planet-friendly energy sources.
M2M and IoT both have a key role to play in assisting in that transition, and in helping mitigate the impact of global uncertainty.
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