Review

Energy System 4.0: Digitalization of the Energy Sector with

Inclination towards Sustainability
Rajesh Singh 1,2, Shaik Vaseem Akram 1,3, Anita Gehlot 1,2, Dharam Buddhi 1, Neeraj Priyadarshi 4
and Bhekisipho Twala 5,*

1 Uttaranchal Institute of Technology, Uttaranchal University, Dehradun 248007, India

2 Department of Project Management, Universidad InternacionalIberoamericana, Campeche C.P. 24560, Mexico
3 Law College of Dehradun, Uttaranchal University, Dehradun 248007, India

4 Department of Electrical Engineering, JIS College of Engineering, Kolkata 741235, India

5 Digital Transformation Portfolio, Tshwane University of Technology, Staatsartillerie Rd., Pretoria West,

Pretoria 0183, South Africa

* Correspondence: twalab@tut.ac.za

Abstract: The United Nations’ sustainable development goals have emphasized implementing sustaina-
bility to ensure environmental security for the future. Affordable energy, clean energy, and innovation
in infrastructure are the relevant sustainable development goals that are applied to the energy sector. At
present, digital technologies have a significant capability to realize the target of sustainability in energy.
With this motivation, the study aims to discuss the significance of different digital technologies such as
the Internet of Things (IoT), artificial intelligence (AI), edge computing, blockchain, and big data and their
implementation in the different stages of energy such as generation, distribution, transmission, smart
grid, and energy trading. The study also discusses the different architecture that has been implemented
by previous studies for smart grid computing. Additionally, we addressed IoT-based microgrids, IoT
services in electrical equipment, and blockchain-based energy trading. Finally, the article discusses the
challenges and recommendations for the effective implementation of digital technologies in the energy
sector for meeting sustainability. Big data for energy analytics, digital twins in smart grid modeling, vir-
Citation: Singh, R.; Akram, S.V.; tual power plants with Metaverse, and green IoT are the major vital recommendations that are discussed
Gehlot, A.; Buddhi, D.; Priyadarshi, N.;
in this study for future enhancement.
Twala, B. Energy System 4.0:
Digitalization of the Energy Sector
Keywords: blockchain; energy trading; energy grid; smart grid; IoT; renewable energy; machine
with Inclination towards
learning (ML)
Sustainability. Sensors 2022, 22, 6619.
https://doi.org/10.3390/s22176619

Academic Editor: Nikos Fotiou

Received: 17 August 2022 1. Introduction

Accepted: 30 August 2022 The United Nations’ (UN) 2030 agenda is to transform and provide a sustainable,
Published: 1 September 2022 affordable, and accessible environment for global citizens in an efficient manner [1]. Con-
Publisher’s Note: MDPI stays neu- cerning Goal 9 of sustainable development goals (SDG), it is stated as “upgrading infra-
tral with regard to jurisdictional structure and retrofit industries to make them sustainable, with increased resource-use
claims in published maps and institu- efficiency and greater adoption of clean and environmentally sound technologies and in-
tional affiliations. dustrial processes” [2]. Industry 4.0 is a digital transformation technology that plays a
significant role in assisting organizations and society in moving towards building resilient
infrastructure with sustainable industrialization [3]. A smart factory is one of Industry
4.0’s core paradigms, and is imagined as a future-state fully connected production system
Copyright: © 2022 by the authors. Li- that functions primarily without human intervention by extracting, transferring, obtain-
censee MDPI, Basel, Switzerland. ing, and processing appropriate data to perform all needed tasks for producing all types
This article is an open access article of products [3]. The fundamental architecture of the smart factory in Industry 4.0 is shown
distributed under the terms and con-
in Figure 1, where the smart factory is amalgamated with distinct innovative technologies
ditions of the Creative Commons At-
including the IoT, blockchain technology, cloud computing, big data, fog computing, edge
tribution (CC BY) license (https://cre-
computing, virtual reality, smart grid, AI, and machine learning (ML). The integration of
ativecommons.org/licenses/by/4.0/).

Sensors 2022, 22, 6619. https://doi.org/10.3390/s22176619 www.mdpi.com/journal/sensors

Sensors 2022, 22, 6619 2 of 34

these technologies in the field of the smart factory can accomplish applications such as smart
manufacturing processes, smart machines, smart business management, production man-
agement, smart logistics, predictive maintenance, and intelligent devices [4]. The adoption
of these technologies in the energy sector enables the realization of a smart system for the
effective management of energy. Before addressing the significance of these technologies in
the energy sector, we first present the problems in the field of the energy sector.

Figure 1. Architecture of smart factory in Industry 4.0 [5].

According to the International Energy Agency (IEA) 2019, smart factories utilize
about 41.9% % of total global energy generated in 2019 and are followed by residential
(26.6%), commercial, and public services (21.2%) [6]. These statistics conclude that the
smart factories are demanding high levels of energy, which indeed increases CO2 emis-
sions and presents challenges for achieving the clean energy and affordable energy goals
formulated by the United Nations. In addition to this, SDG demand to minimize emissions
by 55% by 2030, where IEA concluded that due to the absence of major policy action from
governments, those emissions are set to remain around the same level for the next three
years. However, as a result of global warming, the researchers suggest implementing
green technologies such as zero-carbon green technologies (renewable energy), smart
grids, and energy management [7]. To minimize emissions, renewable energy has been
suggested and it has been adopted by the majority of countries. Along with this, the effec-
tive management of energy is necessary to minimize energy consumption and enhance
energy efficiency. In the scenario of the energy system, there are four sub-systems, namely
generation, transmission, distribution, and consumption, in which effective monitoring is
highly required to properly identify the fault, manage peak loads, load forecasting, energy
leakage, and quality management. Instability in any one of the phases directly impacts
energy efficiency. However, the evolution of Industry 4.0 and its enabling technologies
have proved to be capable in implementing a smart ecosystem in every area with digital
monitoring; in the same manner, the implementation of these technologies in the energy
system also boosts monitoring of the four sub-systems sustainably [8]. Transformation in
the energy system also leads toward providing clean and sustainable energy, with inno-
vative products and services for customer needs and consumption behavior [9]. Along
with the four sub-systems, there are other areas such as energy trading, monitoring of
electrical equipment, and energy storage systems that are significant areas in which Indus-
try 4.0 can be adopted for different activities such as fault detection, fault diagnosis, lifetime
expectancy of the energy storage system, and transparent trading of the energy [10].
Sensors 2022, 22, 6619 3 of 34

Some existing surveys and reviews related to the adoption of Industry 4.0 in the en-
ergy system have been studied and compared. Reference [11] discussed the significance
of digitization, digital twins, blockchain, and Industry 4.0 in the area of enterprises, where
it concluded that energy companies need to implement blockchain and digital twins to
meet social, environmental, and economic expectations. Reference [12] has addressed the
machine learning application in the area of energy production, energy storage, and man-
agement. Reference [13] presented a detailed survey on the deployment of blockchain in
smart grid scenarios to highlight the key security problems. Reference [14] emphasized
the benefits of the IoT-enabled smart grid. Additionally, a detailed layered framework has
been recommended in the study to characterize diverse IoT technology applications in the
smart grid. Reference [15] carried out a survey in which they focused on the applications
of blockchain with smart grids such as energy trading, intelligent energy management,
security and privacy, and microgrid management; along with this, they have highlighted
different frameworks and techniques.
The survey articles mentioned above have made outstanding contributions to the un-
derstanding of the state-of-the-art application of Industry 4.0 technologies such as AI,
blockchain, and digital twins to smart grids. However, in these articles, only the individ-
ual technology’s impact on energy production, energy management, and the smart grid
has been discussed. There are limited articles that integrate multiple technologies to dis-
cuss their impact on electricity generation, transmission, distribution, consumption, smart
meters, electrical equipment, smart grid, microgrid, and energy trading. Based on this
analysis, the study aims to examine the significance of IoT, AI, and blockchain in energy
for different aspects, as IoT is the core technology for realizing Industry 4.0; along with
this, AI enables prediction based on real-time data and blockchain for securing data and
transactions. This article highlights the unique characteristics presented in the four sub-
systems of energy smart grid, microgrid, and energy trading. This technology empowers
the connection of different components of the energy sector on the digital network for
better utilization and management of the environment [16]. The main contribution of the
study is as follows:
1. The integration of IoT in four sub-systems of the smart grid, including generation,
transmission, distribution, and utilization, is addressed. Architecture and the imple-
mentation of IoT-based smart grids with architecture as well as fog- and edge-as-
sisted cloud architecture for the smart grid are presented with applications;
2. A discussion on the implementation of AI and blockchain to achieve demand-side
management, forecasting of dispersed generation for the next day, forecasting of the
smart grid network’s stability, and energy trading in enhancing the trading system
in terms of security and management are discussed;
3. Big data for energy analytics, digital twins in smart grid modeling, virtual power
plants with Metaverse, and green IoT are the major vital recommendations that are
discussed in this study for future enhancement.
The organization of the article is as follows: Section 2 discusses the enabling technologies;
Section 3 addresses the significance of IoT for energy in smart cities; Section 4 covers IoT inte-
gration in energy; Section 5 discusses the blockchain for energy trading; Section 6 discusses
artificial intelligence in energy; and Section 7 presents discussion and recommendations.

Methodology of the Study

Figure 2 illustrates the strategy that is applied for the investigation of this study. Ini-
tially, the study examined the challenges of previous studies. Based upon these chal-
lenges, the relevant prior articles are analyzed to conclude that the challenges are properly
addressed with appropriate discussion and identified as limitations.
Sensors 2022, 22, 6619 4 of 34

Figure 2. The approach of the study.

In searching for prior articles, the study has followed the above approaches, as this
review focuses predominantly on the advancement of Industry 4.0 enabling technologies
in the various activities of energy. The major research question is: “Which Industry 4.0
technologies are targeted in the energy system?” Based on this study question, we col-
lected research articles from several databases such as Web of Science, IEEE Explore, and
Scopus. To find an answer to the research question, we looked through papers having
logical strings. The following strings are considered for obtaining publications: “Energy
AND Industry 4.0”, “energy AND sustainability”, “energy management system” “Indus-
try 4.0 AND digitalization”, “Energy sector AND digitalization”, “energy management
AND IoT”, “IoT AND energy sector”, “Renewable energy AND energy management”,
“Energy Efficiency AND Industry 4.0”, “Smart grid AND Industry 4.0”, “Energy trading
Sensors 2022, 22, 6619 5 of 34

AND Blockchain”, “Energy management AND Artificial Intelligence”, “Applications and

Smart grid”, “Smart meter and domestic”, “Blockchain AND Energy”, “Information and
Communication Technology AND Energy management”, and “Artificial Intelligence AND
Energy efficiency “. The above search strings are used in the IEEE, Web of Science, and Sco-
pus search filters. We searched articles on Web of Science and Scopus using the title, ab-
stract, and keywords fields. In the instance of IEEE, we looked for articles that have ab-
stracts. This study looked at papers from 2012 to 2022. Figure 3 illustrates the distribution
of the articles in high-quality journals and the graph concludes that the highest number of
articles are considered from the Renewable and Sustainable Energy Reviews and Energies
(MDPI) in this study. These journals are followed by Energy (Elsevier), IEEE Access, IEEE
Communications Surveys and Tutorials, IEEE Transactions on Industrial Informatics, IEEE IoT,
and Applied Energy. The remaining articles in the journals are from conferences, books, and
web links. Analysis of the obtained articles delivered the limitations of the previous studies
and has motivated us to carry out the current study. Based on the motivation, the study
examined more studies to frame the objectives in the form of contributions. Every contribu-
tion of the study is detailed and discussed with architecture and tabular representation.

Journals
IEEE wireless communication
IEEE System journal
IEEE Transactions on Industrial Informatics
IEEE transaction on smart grid
Journal Title

Applied energy
IEEE IoT
IEEE communication surveys & tutorials
Renewable & sustainable energy reviews
IEEE Access
IEEE communication magazine
Energies
Energy
0 1 2 3 4 5 6 7 8 9 10
Number of Articles

Figure 3. Articles distribution based on journal.

2. Enabling Technologies
In current years, researchers have coined the novel term “Industry 4.0” [17]. The term
refers to the fourth industrial revolution. The fourth revolution is referred to as internet use,
also known as IIoT. The implementation of Industry 4.0 in the energy sector is necessary to
integrate the enabling technologies for the realization of Energy System 4.0. Energy System 4.0
terminology denotes the age of digitalization in the energy field that signifies the distribution
of digital infrastructure [18]. The significant components of IIoT are interconnectivity, data
transparency, distributed decisions, and scientific assistance. In the following, the different
enabling technologies are briefly discussed with their significance and applications.
(A). IoT:
The Internet of Things (IoT), often known as the Internet of Everything or the Indus-
trial Internet, is a new technology paradigm envisioned as a global network of intercon-
nected equipment and objects [19]. The basic architecture of IoT comprises three layers:
the perception layer, the network layer, and the application layer. The sensors, actuators,
and vision-based devices are the part of perception layer. The network layer inclues wire-
less communication protocols such as GPRS, 3G/4G/5G, Zigbee, Bluetooth 5, Bluetooth
Sensors 2022, 22, 6619 6 of 34

Low Energy (BLE), long range (LoRa), Sigfox, narrowband IoT (NB-IoT), and wireless fi-
delity (Wi-Fi) [20]. The application layer comprises web and mobile applications based on
a cloud server for delivering vision-based services.
(B). AI:
In the digital age, businesses must respond quickly while maintaining high perfor-
mance and competitive advantage. Over the last decade, a massive amount of data in var-
ious formats has been generated at a faster rate than ever before, accelerating technologi-
cal advancement, and includes growing computing processing power and developing
new techniques such as AI [21]. AI comprises any technique that allows robots to operate
by emulating human behavior in order to obtain the best result or, in unclear settings, the
best-expected result. Deep learning is a subfield of machine learning that deals with arti-
ficial neural networks, which are algorithms inspired by the structure and function of the
brain. Deep learning algorithms are structured similarly to the nervous system, with one
neuron connecting to the next and transmitting information. Deep learning models oper-
ate in layers, with a typical model having at least three layers. Each layer accepts infor-
mation from the previous layer and passes it on to the next [22].
(C). Edge Computing:
Edge computing has been identified as a significant facilitator of IoT and mission-
critical, vertical applications. ETSI defines edge computing as a novel technology that de-
livers an IT service environment and cloud computing capabilities at the mobile network’s
edge, within a radio access network (RAN), and close to mobile subscribers [23]. Edge
computing can be utilized for AI implementation at the edge network with different hard-
ware such as graphics processing unit (GPU)-powered hardware, field-programmable
gate array (FPGA)-powered hardware, and application-specific integrated circuit (ASIC)-
powered hardware [24].
(D). Blockchain:
Blockchain is a shared and distributed database that holds a continually expanding
log of transactions and their chronological order [25]. Transactions are accumulated into
bigger formations called blocks, which are time-stamped and cryptographically con-
nected to previous blocks, producing a chain of records that dictates the order in which
events occur [26]. Blockchain 4.0 is primarily engaged with real-time applications such as
public ledgers and distributed databases, where it incorporates Industry 4.0-based appli-
cations through smart contracts [27].
(E). Big Data:
Big data is defined as data for which the data amount, acquisition speed, or data for-
mat limits the ability to conduct successful analysis using traditional relational ap-
proaches, or data that can be effectively handled by employing important horizontal zoom
technologies [28,29]. Big data enables firms to make decisions based on outside intelli-
gence, as well as increase operational efficiency [30]. Big data analytics is a sort of ad-
vanced analytics that involves complicated applications powered by analytics systems
that include aspects such as statistical algorithms and predictive models [31].
(F). AR/VR:
AR/VR is a technologically enhanced representation of the real physical ecosystem
created through the application of sensory stimulation and digital visual elements. The
top priorities of AR are to highlight certain physical world characteristics, increase
knowledge of those features, and obtain sensible and approachable intelligence that can
be employed in real applications [32]. VR is a computer-generated reality that immerses
the viewer in their surroundings by using realistic-looking sights and objects. This envi-
ronment is experienced through the use of a VR headset or helmet [33].
Sensors 2022, 22, 6619 7 of 34

(G). Digital Twin:

A digital twin is a digital reproduction of a real product or component created by the
combination of simulations and service metadata [34]. Data from numerous sources are in-
cluded in the digital representation throughout the product life cycle. These data are con-
stantly restructured and shown in a variety of ways in order to forecast current and future
situations in both operational and design settings, therefore improving decision making [35].
(H). Metaverse:
Metaverse is a combination of the prefix meta (inferring transcendence) and the word
universe, which depicts a hypothetical synthetic environment linked to the physical world
[36]. The Metaverse is characterized as a virtual environment that incorporates physical
and digital aspects, which has been made accessible by the combination of internet and
web technologies, as well as extended reality (XR).

3. Significance of IoT for Energy in Smart Cities

The IoT’s integration in smart cities is specifically aimed at controlling energy con-
sumption; smart cities consist of smart public premises and smart home automation [37].
The lighting system in smart cities for transportation is embedded within the hybrid
model and can be tracked and monitored with an IoT environment during the absence of
a real-time system in the main electrical grid [38]. The lighting system in smart cities for
the transportation network is established with a hybrid system, where the IoT ecosystem
and the main electrical grid intervene for real-time tracking and monitoring. Smart home
automation and smart building are the key elements of the smart grid. Trade and residen-
tial consumers have a significant proportion of the loads [39,40]. The performance of every
individual is critical for the operation, as the overall consequences are not insignificant.
The evolution of innovation in the devices encourages minimizing electrical consumption
and enhancing efficiency along with sufficient energy in a building [41].
Although the incorporation of IoT into a building’s construction costs is higher, it
provides significant advantages. Innovative solutions can be found through IoT use in
buildings and homes that transform conventional structures and ensure a maximally effi-
cient, convenient, affordable, and secure environment [42]. The study examined the en-
ergy-specific integration of IoT and realized that the key element in smart buildings is
advanced metering infrastructure [43]. In order to transmit and receive real-time signals,
all energy-supported devices and equipment are integrated with IoT technologies [44]. A
wireless platform provides an opportunity to establish an access point to all the devices
for sharing the information to the cloud data center. Moreover, some devices have access
to long-term evolution (LTE) and 5G protocols so that the owner and the controller device
have access to the mobile human–machine interface (HMIs) [45]. Based on the data from
occupancy sensors and temperature sensors, the heating, ventilation, and air-conditioning
system (HVAC) can be successfully adjusted, and it leads to a significant reduction in
energy waste [46]. Vehicle-to-grid technologies (V2Gs) can also be programmed and op-
erated with the assistance of IoT gateways for absorbing or powering from the grid [47].
The storage unit will supply the grid at its peak, depending on the building’s load pattern
and capacity. V2Gs can be charged for real-time electricity price tracking automatically at
midnight and are able to sell excess stored energy at peaks to the main grid [48]. Thus, a
smart cloud computing environment can be materialized with IoT technologies and infor-
mation and communication technology (ICT) with high bandwidth and high-speed com-
munications infrastructure.
The use of a CHP (combined heat and power) system can significantly enhance the
efficacy of a building’s energy management [49]. Regarding an energy hub that takes into
account the electricity and gas prices given by the advanced metering infrastructure
(AMIs), the optimal time to generate the CHP unit must be determined by the energy
management system in the building [50]. The concept of an energy system considers gas
and electricity costs recorded by AMIs and the optimal times for generating the CHP are
Sensors 2022, 22, 6619 8 of 34

provided by the energy management scheme of smart buildings. Furthermore, the Zigbee
protocol is embedded in AMI for automatic control of modern devices and appliances. Con-
cerning electricity costs, for instance, a dishwasher may automatically begin at midnight
[17]. The integration of IoT in AMI transforms the metering infrastructure into a real-time
system for obtaining the data of load on a distinct time scale [51]. In addition to automati-
cally responding to demanded household appliances or devices, the end-users may sponta-
neously perform certain DRPs. Therefore, the user can control various devices and devices
employing computer-specific interfaces or AMIs such as smartphones and tablets more con-
veniently by using an IoT-based communications infrastructure [51]. Table 1 clearly illus-
trates a few more applications related to IoT integration in the energy sector.

Table 1. Applications of IoT for the energy sector.

Application Field Explanation Advantages

Creates awareness of energy usage
Establishing peer-to-peer electricity trad-
Energy democratization Regulation and efficiency with a centralized sup-
ing for small end-users
ply chain.
Minimizing the risk of failure,
Preventive mainte- Utility companies and up- Utilizing sensors/ cameras for detecting
maintenance downtime, and enhanc-
nance stream oil and gas industry faults and leakage
ing safety.
Minimizing the imbalance between
Evaluating the market and possibilities
Energy storage and an- Utility companies and in- demand and supply, maximizing the
for implementing energy storage in the
alytics dustrial distributors flexibility in energy storage and prof-
system
itability.
Enhancing the assets utilization and
Digitalized power System operators and util-
Controlling many generation units management and minimizing the
generation ity companies
risk of blackout.
Enhancing the energy efficiency and
Establishing and providing intelligence security of supply, minimizing the
Smart grid Grid management
to the grid using ICT and big data necessity of the backup supply ca-
pacity.
Management and operation Employing big data at the distinct point Checking the weak points in the grid
Network management
of the grid for managing the grid more optimally for avoiding blackouts
Establishing interoperability between
Managing the independent grid from the microgrid and central grid. Charging
Microgrids Electricity grid
central grid stable price to consumers connecting
to microgrid
Integrated control of Monitoring the charging data of the sta- Evaluating the impact of EV on load.
Management and operation
the electric vehicle (EV) tions and analyzing the charge and dis- Recognizing the places for the estab-
of the grid
fleet charger state of EVs. lishment of new charging stations
Minimizing the demand at peak
Commercial/ industry/resi-
Demand response Shielding, shifting, and leveling times leads to a reduction in grid
dential
congestion
Facilitates evaluation of load varia-
Sensors and devices are installed at the
Advanced metering in- tions at a distinct time interval and
End clients consumer site for obtaining data on load
frastructure (AMI) detects the areas for enhancing en-
and temperature
ergy efficiency
Enhancing the energy efficiency by
Battery energy manage- Performing data analytics for triggering
End clients implementing the optimal strategy of
ment the battery at the appropriate time
charging and discharging the battery
Time saving and energy, improving
remote monitoring and controlling of de- knowledge on energy use, enhanced
Home automation End clients
vices and home appliances integration of disturbed generation
and storage systems
Sensors 2022, 22, 6619 9 of 34

A large proportion of electricity demand is attributed to industrial consumption and

industries are classified as sensitive loads that need more stable electricity supplies than
domestic, business, and agricultural consumption [52]. Moreover, in terms of tensile reg-
ulation, frequency stability, and harmonics, industries need better quality power. Differ-
ent types of charge are used in this sector, on the other hand, such as power electronic
devices, induced machinery, and synchronous engines [53]. Control of power in this sec-
tion is extremely important in this respect and, in addition, the owner’s special attention
must be paid to the interaction of industrial loads with wholesale or retail power markets.
Table 2 illustrates the technical specifications of wireless communication technologies that
are widely implemented in IIoT.

Table 2. Technical specifications of distinct wireless communication technologies [54].

Parameter/Tech- Transmission Lifetime of Infrastructure

Bit rate Security Implemented for
nology Distance Battery Cost
Satellite >1500 km 100 kbps High High Costly Wind and solar plants
Energy meter for re-
Zigbee ≤100 m 250 kbps 5–10 years Low Low
newable energy
Bluetooth ≤50 m 1 Mbps Low High Low Home automation
Weightless <5 km 100 kbps Low High Low Energy meter
Sigfox ≤50 km 100 bps 7–8 years High Moderate Electric plugs
LTE-M ≤200 km 0.2–1 Mbps 7–8 years High Moderate Energy meter
NB-IoT ≤50 km ≤100 kbps 1–2 years High Low Grid communication
LoRA ≤50 km 0.3–38.4 kbps 8–10 years High Low Lighting

4. IoT integration in Energy

As discussed in Section 2, we consider the integration of Industry 4.0 enabling tech-
nologies in energy. In this section, we have discussed IoT in the generation, distribution,
and management of smart grids and microgrids.

4.1. Electricity Generation

Resource generation management was previously monitored utilizing local control
devices. System operators have a low remote control capability, and several actions have
to be completed with commands or instructions from a local operator [55]. Moreover, for
many reasons, the asset management of power system generation becomes more ad-
vanced [56]. The first reason is renewable energy resources penetrate energy systems as a
great source of inconsistency [57]. Second, electric vehicles will be widely utilized and will
affect planning for electricity generation [58]. Third, loads are increasingly involved in the
response to demand resources, which is very much in line with unsafe hourly prices of
electricity [59]. The cost of electricity is associated with various items including the power
market and instant fuel price. Moreover, small-scale distribution generation (DG) will
gain extensive dominance in the future as a virtual power plant [60]. In addition to exist-
ing grid limitations, the operator must address a high level of uncertainty and volatility
in microgrids that may, in some cases, impose load shedding or restriction.
IoT technology enables the resolution of issues by avoiding the procedures and pre-
serving the safety, steadiness, consistency, and environmental affordability of the power
system [61]. Variations and production in demand and supply can be tracked remotely
and precisely in an IoT-based smart grid, and the operator can have more detailed moni-
toring of the grid [62]. IoT generation-level technologies are designed to integrate a mul-
titude of sources of energy such as hydro, coal, gas, oil, nuclear, wind energy, solar energy,
geothermal, and marine power to strengthen production performance and preserve the
Sensors 2022, 22, 6619 10 of 34

powerful and static security of the electricity system [63]. Moreover, energy storage sys-
tems are employed to restore disparities caused by a range of sources of uncertainty that
IoT infrastructures can affect. The realization of IoT in the generation stage of the smart
grid is illustrated in Figure 4. The architecture presents the significance of integration of
fog and edge computing with the cloud for the smart grid. ‘n’ number of sensor motes
will be deployed in the geothermal power plant, thermal power plant, solar power plant,
hydropower plant, and wind farm for sensing environmental parameters.

Figure 4. IoT based on Real-time monitoring of generation stage using edge and fog gateway.

The sensor mote is the combination of distinct sensors and a wireless communication
module. The wireless communication module communicates the sensory information of
every plant to the edge gateway. The edge gateway is the integration of edge computing
where it executes the algorithm on the received sensory data and sends necessary instruc-
tions to the sensory mote. The edge gateway assists to overcome the fault or errors quickly.
The edge gateway also predicts the demand, generation, and power price. The connectiv-
ity between the edge and fog gateway is established with the assistance of a wide area
network (WAN). Fog computing is an amalgamation of two significant components of
data processing, namely cloud and edge. The concept of integrating cloud computing is
associated with edge computing for more reliable and faster data processing. The wide
implementation of the smart grid triggers fog computing to act as an optimal tool for data
processing among grid operators, energy providers, and consumers. Thereafter, the con-
nectivity between the fog gateway and cloud platform is initiated through the internet.
a. Wind energy:
Wind energy is rapidly evolving in terms of productivity, and energy professionals
have set goals for wind energy deployment in the future [64] The major impediment to
the growth of wind energy is natural resources. Wind units have high precision for sup-
porting demand, and extreme disparities may endanger system security [65]. Real-time
Sensors 2022, 22, 6619 11 of 34

operation enables the establishment of the remaining electricity system for repaying the
volatility without having to endure strong ramp rates. Moreover, better working relation-
ships with energy storage systems can only be preserved if the wind units and the energy
storage unit exchange real-time data [66]. IoT technologies and ICT facilities allow opera-
tors of wind farms to conduct precise maintenance schedules that prevent enormous det-
rimental effects, and such a timetable can be carried out by machine learning and data
mining [67,68]. In exploiting wind power, IoT’s need is to immediately collect and analyze
information related to wind turbines and wind farms.
Currently, two problems must be overcome: Offshore wind farms have obstacles in
the form of data transmission delay and bandwidth limitations to the transmission of in-
formation for remote sites [69,70]. The implementation of critical data obtained and ana-
lyzed in real time can be made quicker or automated to make a decision (such as to shut
down the turbine to prevent cascade). The deployment of wind energy IoT systems
demonstrates the need for broader economic, safe strategies in the design, operation, and
installation of wind farms and the conserving of turbines [71]. A wind turbine consists of
major components, namely the yaw system, tower, foundation structure, rotor hub,
blades, drive shaft, brake system, doubly fed induction generator (DFIG), wind sensor,
transformer, nacelle, and the central controller [72].
There are several sensors and actuators in the controller layer. The sensors can inform
each essential component’s health and performance. The control system manages compo-
nents with a series of actuators and handles them [72]. The sensors are divided into five
layers: electrical, environmental, mechanical, temperature, and fluid sensors. The control-
ler obtains the sensors’ data and transmits the hydraulic electric and mechanical com-
mands and instructions employing power amplifiers [73,74]. The instructions are con-
ducted with a transmission controller system, linkage controller system, motors, switches,
pitch angle control, fans, pistons of positioning, and heaters. The cyber–physical devices
integrate into the network infrastructure to interconnect the physical layer of wind tur-
bines and the cyber layer, encompassing the network, tracking, and SCADA systems [75].
Network refers to a reliable connection between controllers and sub-systems for the trans-
mission of data and controller signals as well as the connection of smart and deeply inte-
grated equipment in a wind farm.
The network plays a major role in allowing data transmission and control signal be-
tween the monitoring center, actuators, sensors, controller, and data storage stations in
real time. The design of the network depends greatly on local conditions, particularly for
offshore wind farms. A remote terminal unit (RTU) is configured to link each turbine to a
local area network. The condition monitoring system is established by the local area net-
work of wind turbines integrating with a SCADA system, which allows for the pre-defi-
nition of faults in wind turbines and the prevention of chain reactions in a wind farm [76].
Condition monitoring systems hold the stability through under voltage ride-through,
fault ride-through, and low voltage ride-through schemes.
For implementing real-time monitoring, wind turbines are embedded with IoT, ma-
chine-to-machine (M2M) communication, wireless sensor networks, and cloud servers
[77]. Computer-aided interfaces or mobile human–machine interfaces (HMIs) are inte-
grated for monitoring the wind turbines in real time. The information technology-based
control system is more expensive than traditional SCADA systems currently; however, it
is more diagnostic because of the higher frequency of information and the maximum sam-
pling rate. The IEC61400-25 standard is developed to ensure the extendibility and auton-
omy of the data exchange gateway, diagnostics, and standardization [78].
b. Solar energy:
Global warming and environmental issues directly impact the establishment of
world energy demand for renewable energy resources, and power generation from re-
newable energy has the highest potential [79,80]. This source is also considered to play a
leading role in future clean energy systems. Solar energy is also known as radiant heat
Sensors 2022, 22, 6619 12 of 34

and sunlight and can be harnessed using photovoltaic technologies that are ever develop-
ing. Photovoltaic technologies can be dispersedly deployed as decentralized or concen-
trated solar systems (CSP) [81]. A solar panel, cabling, switches, assembly system, and
inventors are essentially photovoltaic systems, and the battery storage unit can be used
with those accessories.
Advanced photovoltaic systems have more advanced technologies for efficiently ex-
tracting solar energy, including an anemometer, maximum power point tracker (MPPT),
and additional task-specific accessories [82]. Unlike conventional photovoltaic systems,
concentrated photovoltaic technology comes with curved mirrors and optical lenses that
focus on irradiation for achieving remarkable efficiency in the solar cell [83]. In order to
increase efficiency, a cooling system is typically incorporated into concentrated photovol-
taic systems. Concentrated photovoltaic and CSP systems are suitable for maximum irra-
diation zones (namely the Golden Banana region in Europe and Sunbelt region in the
U.S.). The traditional photovoltaic systems are also utilized to produce end-user-distrib-
uted systems including building-integrated or rooftop solar production, as the cost of the
capital per kW is considerably less [84]. At present, grid-connected rather than standalone
approaches are significant contributions of PV systems. The power output of PV systems
depends primarily on room temperature and the intensity of sunlight radiation. Dust and
shading trigger a dramatic decrease in the output power, and it simultaneously worsens
the photovoltaic system’s performance [85]. Moreover, the efficacy of the photovoltaic
system declines at maximum temperature.
When it is partially clouded, the MPPT inclines the panel directly toward the bright-
est part of the solar radiation of the sky [86]. The existence of a storage plant is crucial
because solar power has to store the energy for distribution during requirements. IoT re-
fers to the synchronization of analogs with solitary identification equipment, mechanical
machines, objects, and computers [85]. IoT allows communication of the information
along the network by eradicating the rift between information technology systems with-
out human intervention [87]. IoT assists in communicating all data from photovoltaics in
real-time, remote supervision during preventive maintenance, and fault detection of the
photovoltaic system [88]. Furthermore, grid-scale coordination requires real-time, IoT-
compatible communication for supervising the uncertainties in solar power generation
and storage plants.
Since photovoltaic systems are far away from the city and few are located in the de-
sert, in order of prevent losses and failures, it is challenging for humans to monitor all
photovoltaic panels because frequent visits to the photovoltaic plant and the recording of
the operative data are needed. These human failures take a long time to address and are
not easily identifiable at certain times. So, the photovoltaic panels must be equipped with
a continuous real-time monitoring system for monitoring the parameters of the photovol-
taic system and logging the necessary data on a cloud server [89]. The logged data can be
utilized for enhancing the performance of the photovoltaic system and identifying the
causes of poor performance
c. Thermal generation:
Thermal power plants are currently an essential component of all energy systems.
These kinds of units guarantee grid operation reliability and resilience. Indeed, due to
environmental issues, thermal generation is being sought in future power systems to re-
place traditional heat plants with renewable resources. They also function with minimum
efficiency and low flexibility. Currently, gas-fired units are considered costly generators.
These issues demonstrate that, in this sector, IoT is probably the least deployed in com-
parison to other components of electricity grids, namely distribution, demand, and gen-
eration. In two senses of the word, however, IoT can play a key role in realizing the output
status of the generators, transformers, and tap changers together with the power injected
into every individual branch of the system’s central control center. The IoT infrastructure
can, thus, easily access such data in real time. In addition, traditional steam power stations
Sensors 2022, 22, 6619 13 of 34

have a range of components and elements. In order to perform overhauls and preventive
maintenance events for mitigating the risk of unplanned failures, the health status of all
engines is recorded and monitored automatically.
d. IoT for energy storage facilities:
Electricity markets are gradually moving towards an intelligent environment that al-
lows for smart and autonomous generation to cooperate with many providers and cus-
tomers. The reason is that, in the last two decades, renewables have been penetrating an
incremental trend that increases the level of grid operation uncertainty. Energy storage
technologies contribute to the dispatch ability by resolving the imbalances of uncertain
renewable resources. A grid-scale battery energy storage system (BESS) consists of a con-
trol system, a battery bank, protective circuitry, power electronics interface for AC–DC
power conversion, and a transformer to alter the BESS output to the transmission or dis-
tribution system voltage level [90]. Traditional uninterruptible power supplies are in-
stalled in series with their loads, whereas a BESS is often connected to the grid in parallel
with the source or loads it is supporting. A power conversion unit is typically a bi-direc-
tional unit capable of four-quadrant operation, meaning that both real and reactive power
can be delivered or absorbed independently according to the needs of the power system,
up to the rated apparent power of the converter.
The incorporation of IoT and the massive data package require high complexity
while boosting performance at autonomy levels. A sensible balance between complexity
and performance must always be established. Energy storage devices are classified into
several types including small-scale frequency regulation, bulk energy time shifting, fre-
quency stability, and power reliability [91,92]. So far, diverse energy storage technologies
are established for numerous applications. Compressed air energy storage and pumped
hydro energy storage are the two significant technologies applied for bulk energy time-
shifting [93,94]. Moreover, a few emerging energy storages are presented, such as liquid
air energy storage, advanced rail energy storage, underwater compressed air energy stor-
age, ocean renewable energy storage, and the blue battery in green power islands, which
are tested on a pilot scale in large-scale applications [95–99].
In small-scale applications, such as frequency and power quality regulations, distinct
types of batteries, flywheels, and fuel cells are implemented. Energy storage plays a key con-
tribution in enhancing the flexibility and reliability of power systems. Their uncertain and in-
termittent nature is a major obstacle to the greater use of energy resources. By using power
storage facilities, the challenges of such qualms can be mitigated. In order to avoid undesirable
cuts for excess-generating potential or detrimental deficiencies, a real-time interconnection be-
tween these units is essential. In order to facilitate the joint operation of solar farms or parks
with energy storage grids, IoT infrastructure can upgrade this condition, enabling all types of
units to be more profitable. The effect of IoT on the better use of small-scale energy storage
systems such as batteries is utilized in frequency stabilization microgrids.

4.2. Electricity Transmission

The transmission level acts as the bridge between the production level and distribu-
tion level. Transmission has a prominent role in electricity systems that ensures reliable
demand supply [100,101]. Firstly, we discuss IoT’s role in improving congestion manage-
ment and, secondly, we discuss IoT’s effect on system safety conservation [102]. The in-
stallation of IoT and smart electronic devices into the transmission sector encourages the
operator to monitor the electrical status of transmission lines, including perturbations
[103,104]. Figure 5 illustrates the application of IoT in electricity transmission and they are
named as substation automation, energy storage, SCADA/EMS, phasor measurement
units (PMUs), assets management using NTAMC, and renewable integration PMU, which
determines voltage and current angle and magnitude on a particular line point by em-
ploying the GPS for synchronization of time. A commercial PMU version will report
Sensors 2022, 22, 6619 14 of 34

measures of approximately 30–60 measurements per second with high temporal resolu-
tion and enables engineers of the power systems to examine the dynamic events in the
power system [105]. With conventional SCADA, such a rapid and precise measurement is
not possible every 2 or 4 s. The evolution of non-GPS reference-time micro-synchronous
PMUs executes 120 samples per second for combating cataclysmic blackouts. PMUs trans-
mit the data to demonstrate high-precision reactive and active power pathing over the
transmission line, thereby improving system visibility. The real-time monitoring of power
flow over the transmission wires assists the operator in automatically accomplishing traf-
fic in congested power systems or areas, especially in an emergency [106].

Figure 5. Application of IoT for electricity transmission.

Hard winds and strong snowy conditions lead to lines that cause the asymmetrical
pulling force to be exerted on lines, which may lead to towers leaning [107]. These factors
harm overhead lines that increase operational risk. Maintenance and remote monitoring
are the key challenges that arise in the large transmission grid. Integration of IoT will al-
leviate the damage caused by natural phenomena of this kind. Data from advanced sen-
sors installed on the tower conductor of the line must be obtained accordingly. The data
are transmitted to the synchronous node device through optical fiber or wireless commu-
nication to the central control center. Tower deviation sensors, sync node devices, mete-
orological sensors, wind speed sensors, conductivity sensors, and current leakage sensors
are IoT devices that can be embedded into the transmission grid [108,109]. These devices
can help to improve real-time driver tracking, insulation, and towers.

4.3. Electricity Distribution

An intelligent distribution grid must be fitted with IoT infrastructures that monitor
critical components of the distribution network. This is shown in Figure 6. Installing AMIs
is the first phase in implementing an intelligent consumer distribution grid and the most
critical component of AMI systems is the communication network [110]. It provides a two-
way, coherent, and safe connection among servers, data collectors, counters, customers, and
recipients. Online supervision of consumption, fault detection in low-voltage transmission
lines, smart control of energy consumption and generation, self-healing schemes, power loss
Sensors 2022, 22, 6619 15 of 34

management, emergency demand response mechanism, and remote monitoring during nat-
ural disasters are applications of integrating IoT in electricity distribution [111,112].

Figure 6. Application of IoT for electricity distribution.

Furthermore, the data collected from every feeder need to be digitized by local ICT
networks so that the distribution authority can monitor the distribution grid [113]. A self-
healing scheme is a prominent and essential system for the grid in the future for enhancing
the reliability of the grid. Self-healing schemes need to be implemented in real time for
retrieving the appropriate and desired functionality. Renewable energy sources need to
be more efficiently operated in the distribution networks by establishing a distributing
network for monitoring supply and demand. In this context, the operator is required to
be instantly generated with the assistance of IoT-based AMIs, and appropriate controls
based on predetermined settings have to be carried out automatically [114]. An IoT net-
work deployed for smart meters must be leveraged for other minima and throughput,
fewer power applications including home/building automation and distribution automa-
tion, street light automation, demand response, etc.

4.4. Smart Grid

A smart grid is the amalgamation of the four sub-systems, namely power generation,
power transmission, power distribution, and power consumption [115]. The application
of IoT enhances the four sub-systems of the smart grid. In the field of power generation,
IoT is employed for monitoring and controlling solar power plants, geothermal plants,
and wind power plants, as well as evaluating energy consumption, equipment health, gas
emission and pollution discharge, power correction, power reading, and power predic-
tion. IoT provides an opportunity in power transmission for health monitoring of trans-
mission lines, detection of tilted transmission towers, as well as monitoring of power pro-
tection circuitry and safety against vegetation through swarm drones and smart patrol.
Monitoring the level of oil in transformers, power theft, the health of transformers, oper-
ation and equipment management, and RYB phase detectors of LT pillars all use IoT in
the field of power distribution. Advanced meter infrastructure, home automation, charg-
ing infrastructure, information management of electric vehicles (EVs), power demand in-
frastructure, energy efficiency monitoring, energy consumption data collection and bill-
ing, load balancing and controlling, multi-network consumption, integration of distrib-
Sensors 2022, 22, 6619 16 of 34

uted energy resources, energy profiles for home, and hardware chatbots for energy pro-
files of users are possible with IoT in the field of power consumption. Revolutionizing the
energy grid into a resilient infrastructure with groundbreaking technologies is repre-
sented as a smart grid. A smart grid is realized with bi-directional wireless communica-
tion protocols, computer processing, and a control system. The advanced technologies
that incorporate smart sensors include phasor measurement units (PMUs) that assist op-
erators in assessing grid stability, smart digital meters that give consumers smarter infor-
mation and remotely record disruptions, electrical relays that perceive and recover from
substation faults automatically and re-route power around problems, and batteries that
shunt power around problems [116].
Figure 7 illustrates the smart grid architecture whose details present the power sys-
tem, power flow, and information flow. Here, the four sub-systems of the smart grid are
integrated with three appropriate distinct kinds of communication networks, namely
wide area network (WAN), home area network (HAN), and neighborhood area network
(NAN), for power generation, power transmission, power distribution, and power con-
sumption [117]. WAN act as the cornerstone for enabling communication between gate-
ways or aggregation points. WAN is the network integrating energy generation sources
such as geo, thermal, wind, solar, nuclear, and hydro to monitor and control the genera-
tion and transmission systems remotely from any location [118]. WAN is the combination
of two interconnected networks including a core network and a backhaul network. Core
networks enable the delivery of facilities of maximum data rate and minimum latency
communication to utility control centers via cellular communication and optical fiber
communication. The backhaul networks offer wired and hybrid fiber–wireless networks
with broadband links and monitoring devices to NANs. Further installation of video cam-
era surveillance systems in smart grid management ensures the security of assets, fire
alarm, and stable activity.

Figure 7. Architecture presenting power system, information flow, and power flow [117].

NAN is the second layer of the smart grid, and it comprises digital meters relating to
various HANs and further communicates to the data collector devices that interconnect
NANs to WAN [119]. This layer initiates communication for connecting distribution sub-
stations and field electrical appliances for power distribution systems. The gateway pre-
sent in the NAN enables the system to obtain the energy consumption data of smart me-
ters in HAN and further transmits it to the utility companies over WANs [37]. Generally,
Sensors 2022, 22, 6619 17 of 34

the network topology of NAN consists of two distinct gateways, namely the HAN gate-
way and the NAN gateway. The NAN gateway is capable of connecting to numerous
gateways, where it acts as a wireless access point for providing single-hop communication
to HAN gateways. HAN gateways are the medium for communicating the consumption
data of numerous smart meters through wired and wireless communication technologies.
However, several parameters, namely maximum transmission range and interference-free
and low-power consumption, are essential for a communication protocol that integrates
reliable connectivity [120].
HAN is a significant layer in the architecture that transmits and demands the power
requirements of home appliances and smart appliances, including renewable energy
sources and electrical vehicles [121,122]. HAN is installed in smart meters of homes, in-
dustries, and commercial buildings, either in mesh topology or star topology. Here, the
gateway is interconnected with smart meters for collecting the power consumption data
and transmitting with the most significant and appropriate wireless technologies, includ-
ing Zigbee, powerline communications, and Wi-Fi. HAN performs bi-directional commu-
nication regarding demand response management where forward communication trans-
mits the real-time information of smart meters and energy consumption to the NAN [123].
The backward communication is represented as a central node and can obtain the electric-
ity pricing information through the NAN; communication also performs trigging events
in the necessary situation in home appliances [124].
(a) Hybrid fog-assisted cloud architecture for smart grid
The combination of diverse IoT devices in the four sub-systems of the smart grid gen-
erates a tremendous intensity of heterogeneous data [125,126] and it is challenging for net-
works to tackle huge amounts of data when it hits the cloud server due to limitations such
as traffic handling of low-latency data and limited resource distribution [127,128]. To over-
come these limitations, fog computing can be employed as it integrates application-specific
logic in intermediate infrastructure along with edge devices and remote clouds [129,130].
An architecture to monitor and control the computational task of the smart grid is
proposed by [131] and is shown in Figure 8. The architecture is capable of performing
analytics on smart grid data in fog and edge layers. In the first layer, the basic infrastruc-
ture of the smart grid sub-systems generation, transmission, distribution, and consump-
tion are embedded with IoT-enabled sensor nodes to sense the physical parameters. In the
second layer, the physical devices that are deployed in households and industries are en-
ergy meters, vision nodes, IoT-based sensors, and RFID tags. As fog motes and edge motes
are connected to devices, it is feasible to perform analysis of real-time data for checking
latency, quality of service, and reliability. The cloud layer is the final layer and a major
layer of the architecture, as it provides a platform to visualize and monitor the real-time
events and data of the smart grid from any location through internet connectivity.
Sensors 2022, 22, 6619 18 of 34

Figure 8. Hybrid fog-assisted cloud architecture for smart grid [131].

(b) Applications of IoT-based smart grid

There are many existing applications of IoT-based smart grids (represented in Figure
9) and previous applications, with the addition of a few more applications of IoT-based
smart grids, are addressed in this section. The applications are categorized concerning the
four sub-systems and three communication networks (WAN, NAN, and HAN). In power
generation, the possible applications concern monitoring energy resources, namely solar
power, wind power, and geothermal power plants through WAN [132]. Additional appli-
cations include monitoring energy storage units, power prediction, power correction, and
power trading. The monitoring of the health status of the equipment is achieved with the
assistance of IoT. In the field of power transmission, transmission line plays an integral role
in possible applications in the area of rigorously monitoring the tilt position of transmission
power and health status monitoring of transmission lines. Generally, in a few specific cases,
it is challenging for authorities to patrol the conditions of the transmission tower. Integration
of IoT enhances the protection of transmission towers from natural disasters, unsafe con-
struction, and the growing of vegetation around the foundation of transmission towers.
Here, IoT smart patrol and swarm drones have the potential to reach the destination of the
transmission tower and sense the anomalies of the transmission tower. Smart patrol and
swarm drones based on IoT are able to transmit information to authorities through WAN.
Sensors 2022, 22, 6619 19 of 34

Figure 9. Potential application of IoT-enabled smart grid.

In power distribution, the power is stored in the distribution station, where various
transformers are installed. Transformers play a crucial role in storing power and distrib-
uting it to residences, industries, etc. Here, monitoring the health status of the transformer
is necessary for supplying continuous power, monitoring the oil level in the transformer,
the health of the transformer, and the LT pillar for the RYB phase detector. Moreover,
monitoring power theft and equipment management are the applications that are related
to equipment. With the integration of IoT, the health monitoring of the transformer and
other activities are remotely monitored through the NAN network. In the field of power
consumption, the main application comes from homes because of the amount of power
consumed by homes through refrigerators, washing machines, lights, and other possible
appliances. An IoT-based smart grid in this field provides an opportunity for realizing the
concept of smart home automation, where the appliances in the homes are automated.
Smart home automation is the integration of smart sensors and actuator nodes that sense
the environmental parameters and adjust lighting intensity and other appliances.
The data from the home regarding environmental parameters such as temperature,
humidity, and air quality are transmitted to the home control unit through HAN. Another
application of information management of EVs is the installation of renewable charging
infrastructure for minimizing CO2 emissions. Generally, the charging system of an EV
Sensors 2022, 22, 6619 20 of 34

comprises three key components, namely the power supply system, monitoring system,
and charging equipment.
AC chargers and DC chargers are the possible charging sources that are present in
the charging equipment for charging appliances in the home (AC chargers) and vehicles
(DC chargers). Here, IoT assists in managing and establishing an interface for managing
the information related to billing of charging. The integration of GPS with EVs further
assists the driver to locate the nearest and most appropriate charging station. Another
application in power consumption is related to recording the utilization of power by
homes and industries. Power utilization information is gathered in frequent time inter-
vals; however, this mechanism has many shortages such as inaccurate information related
to the amount of power consumed at a particular time. Advance meter infrastructure
(AMI) is based on IoT and utilizes the wireless sensor network (WSN), optical program-
mable logic controller (OPLC), and PLC. AMI in the smart grid is able to gather real-time
energy consumption with maximum reliability and the data can be utilized for perform-
ing the analysis of power consumption.

4.5. Microgrids
A small-size microgrid is a coalition of loads located in a particular distribution net-
work feeder and is able to meet all demands by employing micro-scale generation resources
such as photovoltaic panels, small-scale wind turbines, gas turbines, and micro-turbines
[133]. Furthermore, in cases of lower demand, an energy storage facility may be utilized to
supply the surplus production of micro-scale renewable energy sources. The most predom-
inant kind of storage employed for battery units preserves the frequency stability of the mi-
crogrid. The microgrid design may have a remote structure, in particular, for remote areas
or connected structures [134]. The connected mode is also recognized as the off-grid mode.
The microgrid can trade the additional generation of internal resources to the grid in collec-
tive operation with an upstream network. In previous studies, hybrid systems deliver the
cooperative functioning of micro-sources and storage facilities are proposed. Furthermore,
some researchers have introduced the paradigm of interconnected microgrid dependency
on the main grid. However, three problems are presented in microgrids, namely power
quality, microgrid efficiency, and security of interconnected microgrids.
The inclusion of IoT will contribute to solving these issues, leading to the increased
prevalence of the microgrid system that power system operators prefer [135]. Energy
management must take place independent of the main grid in a microgrid. The upstream
grid has no micro-source control and observation. The microgrid operator must make
forecasts of uncertain micro-sources. The imbalances produced must be remedied by the
internal storage device. In this context, however, the operator must enforce an unplanned
load shedding or an unwanted cut-off due to the fact that such schemes have limited re-
silience capacities. The integration of IoT enhances the degree of observation and control
of microgrid components by the main grid operator by taking into account the character-
istics of all micro-sources, for the entire system generation, for connected microgrid oper-
ators [136]. IoT enables the establishment of better power system performance and more
renewable energy resource penetration.
Furthermore, the microgrid operator will be able to make the microgrid more effi-
cient and utilize renewable storage collaboration that corresponds to the actual energy
market prices. Furthermore, real-time monitoring helps to improve the power quality of
control systems [137]. Moreover, the mutual stability can affect two or more microgrids
because of the incompatibility in scale. Any severe inequality in one can, therefore, risk
other people’s security. To meet the demand continuously, frequency and voltage stability
control systems are to be implemented [138]. This includes the utilization of the IoT infra-
structure for internet-based environment; data from all sensors must be collected to in-
form the control devices in real time of the critical parameters [139]. In brief, data that
correspond to all internal components of the microgrid can be shared with the upstream
network operator via the implementation of the IoT infrastructure, which is currently not
Sensors 2022, 22, 6619 21 of 34

done [140]. This allows the main grid operator to monitor and control micro-sources and
components of the microgrid. Moreover, the integration of IoT for microgrid operators
encourages establishing a stable interconnection between the generation and storage unit
for generating revenue. Additionally, IoT-based technologies facilitate an authority’s abil-
ity to sustain security in the interconnection of microgrids. Intelligent controllers en-
hanced by deep reinforcement learning (DRL) approaches are employed for the bottom-
layer operation of each microgrid independently with bottom-up EI architecture and data-
driven dynamical control strategy. The simulation has demonstrated that the suggested
method reduces overall generation costs under the bottom-up design by 7.1% and 37%,
respectively, when compared to conventional methods such as proportional integral and
optimal power flow [141].

4.6. IoT in Services of Electrical Equipment

According to the UNSDG agenda, energy efficiency is one of the key elements for
achieving sustainable development. Furthermore, energy efficiency provides long-term
fiscal benefits by lowering the energy generation, emissions, and price of fuel imports and
exports of the energy sector. An efficient study of real-time data in the energy supply
chain is critical for improving energy efficiency and optimizing energy management. In
energy, supply chain is categorized into three main components based on resource extrac-
tion to end-users, namely energy supply, energy transformation processes, and energy
demand, which are available for energy use in industry, buildings, and transportation.
Figure 10 depicts the three sections along with their respective elements and demon-
strates the potential contribution of IoT to energy efficiency, energy demand reduction,
and increasing the share of RESs. The energy consumption in smart cities is categorized
into distinct parts, namely residential and commercial (offices, schools, and transport).

Figure 10. Energy Supply Chain.

In the residential sector, energy consumption is possible due to lighting, cooking,

refrigerators, heating, ventilation, and air conditioning (HVAC) and is clearly illustrated
in Figure 11. The energy consumption is highest for HVAC systems in buildings. HVAC
system management is critical for lowering the consumption of electricity. The progres-
sion in technology contributes significantly to controlling energy losses in HVAC systems
[142]. When a vacant zone is discovered, certain steps can be taken to reduce energy con-
sumption. HVAC systems, for example, can minimize operation in the vacant zone, re-
sulting in substantial reductions in energy consumption and losses [142].
Sensors 2022, 22, 6619 22 of 34

Figure 11. Proportion of residential energy consumption [142].

5. Blockchain for Energy Trading

Currently, the implementation of blockchain-based peer-to-peer energy trading has
been a trend. Figure 12 illustrates the three-layer architecture of peer-to-peer (P2P) energy
trading based on blockchain technology. Structured and unstructured P2P networks are
the two broad organizational modes of P2P networks [143]. The unstructured peer loca-
tion is chosen at random, eliminating the need for a centralized node search, but the query
may not yield a result. We classify the initial subsection of energy transactions into three
sub-sections: energy transactions, consensus, and optimization. Transactions are classified
into three sub-sections, namely buyer–seller matching, pre-transaction communication,
and transaction settlement [144].

Figure 12. The architecture of blockchain-based trading.

The power network, business network, and information network are the part of su-
per-network, which is shown in Figure 13. The power network is established with numer-
ous networked microgrids in various geographical locations including distribution gen-
eration, electric vehicles, and general loads connected to distributed connection points.
Each microgrid’s internal topology is also unique. Applications, communication devices,
protocols, and information flow comprise the information network.
Sensors 2022, 22, 6619 23 of 34

Figure 13. Structure of distribution network for peer-to-peer (P2P) energy trading.

The actual energy flow is logged in the distribution network database and microgrid
databases through advanced energy meters that are installed in each microgrid. This layer
also defines various control strategies for maintaining the quality and reliability of the
power supply and regulating the power flow [145]. The business network is a peer-to-
peer network that has been strengthened by a blockchain for the development of numer-
ous business models that control energy trading. Microgrid operators are permitted to
engage in peer-to-peer energy trading in the regional distribution network by following
the energy market regulations [146].
Table 3 illustrates the recent studies that have implemented blockchain for energy
trading. In the studies, it has been identified that the blockchain is implemented to provide
extensive secured trading, auctioning, and demand management with transparency, im-
mutability, and decentralization. Furthermore, the record of every single transaction at
each node is stored in ledger format with a timestamp. The hash algorithm in the block-
chain boosts security in the distribution of data. The consensus algorithms of a blockchain
built on P2P networks deliver the secure distributed ledger. Once an update is included
in the blockchain as a valid block, it is difficult to remove and manipulate it. In the major-
ity of studies, the private blockchain is widely adopted for the implementation of P2P
networks in energy trading.

Table 3. Recent studies of Blockchain for energy trading.

Research Objective Blockchain Type

P2P trading in retail electricity markets using a blockchain- Ethereum
[147]
based architecture private chain
P2P scheme centered on smart contracts for double energy
[148] Ethereum
auctions and reserve trading
Transparent and Decentralized P2P energy trading to
lower the grid’s energy generation and administration
[149] Ethereum blockchain
load simultaneously improving profit for both consumers
and prosumers.
Decentralized ledge integration in the electricity market-
[150] place for the smart grid context to enable stakeholder trust Ethereum blockchain
and traceability
Corda-based private per-
Power trading system that is decentralized and uses dis-
[151] missioned distributed
tributed ledger technology.
ledger.
Sensors 2022, 22, 6619 24 of 34

6. Artificial Intelligence in Energy

AI is related to the integration of the intelligence of machines to perform tasks the
same as humans for solving complex tasks. The advancement of AI has lowered the bur-
den of manual computing. Furthermore, AI has outperformed in the region of complex
tasks that are impossible for the average human’s intelligence. AI is used in a variety of
fields, including database management, accounting, information retrieval, product de-
sign, production planning, distribution, economics and business, medicine, food quality
monitoring, biometric and forensic analysis, and so on. AI is founded on various learning
theories such as statistical learning, neural learning, evolutionary learning, and so on.
Among these, neural learning is the most widely used in a variety of applications. The
most basic neural learning method is ANN, represented in Figure 14.

Figure 14. ANN Architecture.

Table 4 presents the previous studies that have implemented AI in energy. From the
table, it has been identified that AI models such as the support vector regression technique
are implemented to forecast the demand for the next day; the MLSTM technique is imple-
mented to predict the smart grid network stability; and ANN controllers are implemented
for the microgrid power balance. The AI-based Icosf control algorithm is implemented for
increasing the power quality in microgrids and AIEM is utilized for the estimation of en-
ergy efficiency.

Table 4. AI in the Energy.

Research Objective AI
Demand-side management forecasts dis- Support Vector Regression tech-
[152]
persed generation for the next day. nique
Multidirectional Long Short-Term
[153] Forecast the smart grid network’s stability.
Memory (MLSTM) technique
[154] Preserve the microgrid’s power balance. ANN controllers
Power sharing and increased power qual-
[155] AI-based Icosf control algorithm
ity in intelligent microgrid systems
Estimating the effects of energy efficiency AI-based useful evaluation model
[156]
and renewable energy on the economy (AIEM)

7. Discussion and Recommendations

Energy is an important source in the present generation for sustaining life on this
planet. With the advancement of technologies, energy sources are carefully monitored and
processed because of the limitation of resources and the wide increase in the population.
Sensors 2022, 22, 6619 25 of 34

In this study, we have discussed the significance of the Industry 4.0 revolution in the en-
ergy sector. We came up with limitations and recommendations in this study to enhance
the distinct areas in the energy sector to accomplish the goal of Energy System 4.0 and the
limitations and recommendations are as follows:
a. Dynamic communication
In IoT, wireless communication protocols play a crucial role in maintaining reliable
transmission and connectivity with IoT-aided smart devices. An IoT-aided smart grid op-
erates under critical environments, including some very severe conditions, such as the
monitoring of power transmission lines [157]. Generally, in IoT, the communication pro-
tocols are selected based on several parameters, namely low power consumption, data
rate, and long-range transmission [102]. In a smart grid, the information and activities are
considered critical because of the delay in the transmission of information related to
power management, and appliance scheduling leads to failure. Thus, the utilization of
wireless communication protocol plays a crucial role, as the information needs to be trans-
mitted to a long range within a short interval of time. Therefore, it is important to consider
the requirements for establishing hybrid communication technologies and signaling cov-
erage under adverse environmental conditions [158].
b. Energy sources for end nodes
Fundamentally, the end nodes are the backbone for sensing the distinct parameters
of smart grid sub-systems (transmission, distribution, and utilization) using sensors and
camera nodes. However, the power consumption of these end nodes plays a crucial role,
as the end nodes are working on batteries [159]. To overcome this challenge, the end nodes
need to be inbuilt with an energy storage unit and, additionally, an energy harvesting-
supported design needs to be implemented in end nodes [160]. Here, extensive research
is required on building long-term-capacity batteries for the end nodes.
c. Machine learning (ML) in end nodes of smart grid
The integration of ML in end nodes of the smart grid enables forecasting of demand,
power utilization, and power prices. Fundamentally, ML is able to learn from previous
events and enhance decision making. In the smart grid, the prediction of electrical load is
crucial as it depends on time and weather data [161]. The precise estimation of electrical
load will assist the electrical authorities in managing electricity production, management,
control, and operations [162]. The prediction of electrical load for future load values is
possible by analyzing the obtained data from smart meters [163].
d. Blockchain in smart grid
Blockchain is a distributed ledger technology that performs distributed transactions
by eliminating central entities [164]. In energy systems, many rapid changes are undergo-
ing with the utilization of renewable energy sources. In renewable energy sources, the
prediction of events is challenging because it depends upon the weather conditions. To
overcome this challenge, flexible ways are to be implemented to assure safe operation and
management [165]. Such methods comprise demand response, fast-acting supply, and en-
ergy storage devices. To implement these flexible ways, a significant investment is re-
quired, and this investment needs to perform on a secure decentralized platform. Here,
the blockchain will assure secure and decentralized transactions between energy utilities
and consumers [166].
e. Green IoT
The energy consumption of IoT devices is a substantial challenge in the IoT ecosys-
tem, particularly in the context of extensive distribution in the near future [167]. A large
amount of energy is required to power a billion devices that are connected to the internet.
The huge amount of IoT devices generates a large amount of electronic waste [168]. Low-
carbon and energy-efficient communication are possibilities for minimizing the environ-
mental impact. Green IoT (G-IoT) can achieve the objective of low carbon emissions [169].
Sensors 2022, 22, 6619 26 of 34

G-IoT offers energy-efficient features throughout its life cycle, including production, de-
sign, deployment, and finally, disposal [170]. The G-IoT cycle is utilized in a variety of IoT
applications. In radio frequency identification (RFID) tags, the size of RFID tags is reduced
in order to reduce the amount of material in each of the RFID tags, which are difficult to
recycle [171].
f. Virtual Power Plant with Metaverse
Virtual power plants (VPPs) are sustainable alternatives for tackling the smart energy
grid’s decarbonization and energy efficiency goals. Metaverse strives to optimally com-
bine and coordinate energy production with storage and consumption resources with con-
trollable loads to satisfy renewable inclusion and energy cost minimization requirements
[172]. VPPs essentially collect resources to connect energy markets, plan their functions to
aggregate energy profiles, give energy services, ensure a stable supply, and provide de-
mand response services. A decentralized VPP optimization system built on the highest
blockchain infrastructure can be used to provide a verifiable, transparent, and trustwor-
thy management structure for the VPP’s dependable energy service delivery.
g. Big data for energy analytics
Energy analytics has advanced rapidly in the last decade due to advancements in big
data and machine learning. Energy data have grown enormously in several areas and do-
mains as a result of this advancement in energy analytics [173]. Energy computing ap-
proaches have been utilized to handle data processing in a variety of disciplines, particu-
larly in energy data. It also allows for power outage prediction, detection, and prevention,
as well as smart load management and preventive asset management.
h. Digital twins in smart grid modeling
Advanced manufacturing systems are incorporating digital twins to monitor and op-
timize industrial operations. Energy consumption and distribution are highly unpredict-
able, and there is an evolving requirement for forecasting energy demands as well as dis-
tributing energy in the most efficient manner feasible such that manufacturing processes
are not hindered [174]. Future work focuses on the interconnection of the functional blocks
that comprise the smart grid to expand and computerize the process of managing power
sources and customer blocks.
i. Standardization of IoT for smart grid
IoT employs distinct kinds of technologies with different standards for establishing
an interconnection between a single device to many numbers of devices. However, the
instability among IoT devices creates a challenging task because IoT utilizes different
standards [175,176]. Every network protocol and wireless communication protocol com-
prises distinct standards for data transmission [177]. Moreover, the security and privacy
of the data are also significant elements that need to be considered [178]. To address the
challenge in the standardization of IoT-based energy systems, the strategy is to recognize
a system of systems with cooperation so that all actors can access and utilize these systems
equally. Another strategy is for collaborating entities to construct open-information mod-
els and standards-based protocols. As a result, standards will be freely and publicly ac-
cessible [179,180].

8. Conclusions
Emissions from energy need to decline by 55% by 2030; however, emissions are set to
remain around the same level for the next three years. The transformation in the energy in-
dustry leads toward managing energy sources sustainably and reliably. The evolution of dig-
italized technology including IoT transformed the traditional energy grid into the smart grid.
In this article, we have discussed the significance of Industry 4.0 enabling technolo-
gies (IoT, AI, edge computing, blockchain, big data, AR/VR, digital twins, and metaverse)
in the field of the energy system for enhancing the activities in the four sub-systems: smart
grid, microgrid, electrical equipment, and energy trading. Initially, the article discussed
Sensors 2022, 22, 6619 27 of 34

the different enabling technologies of Industry 4.0 for bringing the energy system onto the
digital network to strengthen its monitoring and enhance energy efficiency. Prior to the
discussion of these technologies’ integration into energy systems, the study addressed the
different obstacles that exist in the energy sector and also addressed the need for IoT in-
tegration. This is because IoT is the core technology of Industry 4.0 to connect physical
things to the digital network.
Following this, the article discussed the integration of IoT for energy generation
transmission, distribution, and consumption. In which, the article addressed the energy
generation from renewable energy sources (wind, solar, and thermal) that are prioritized
for implementation to minimize carbon emissions. Resource generation management: re-
alizing the output status of the generators, transformers, tap changers, and electrical status
of transmission lines including perturbations; and improper monitoring of energy con-
sumption in the domestic and other areas are the problems identified in the four sub-
systems of energy. We discussed the studies with an IoT-based architecture perspective
for overcoming the problem and implementing smart and real-time monitoring. Along
with this, fog- and edge-assisted cloud architecture for the smart grid are also presented
with applications.
This study also analyzed and identified the application of AI and blockchain in the
energy system, in which AI is majorly implemented in demand side management, fore-
casting generation for the next day, and also in forecasting smart grid network stability.
Blockchain technology is distributed ledger technology that empowers the creation of a
smart contract with hash cryptography. This technology inspires the implementation of
energy trading in a transparent, secure, and immutable manner. It has been identified that
the blockchain is majorly utilized in energy trading for households, industries, etc.
Based on the analysis in the article, the study has formulated vital recommendations
that can be applied in future work. These recommendations are formulated with the im-
portance of technical capability in resolving the problems in the energy system with effi-
ciency and sustainability. It is challenging to implement all these technologies in the en-
ergy system. However, to enhance the infrastructure of the energy system, this study sug-
gested recommendations with individual technologies. The implementation of digital
twins and Metaverse are some of the latest technologies that have already gained signifi-
cant attention for smart grid modeling and the development of virtual power plants.
Regarding the highlights of this study, we discussed the integration of IoT, blockchain,
and AI with an architectural perspective in the different sub-systems of the energy system
for achieving real-time monitoring with intelligence and predictive analytics. Based upon
analysis, the article presented vital recommendations for individual technology integration
in energy for multiple applications. A limitation of the current study is that it has addressed
only three enabling technologies of Industry 4.0. The study will be further extended with
the discussion of other enabling technologies as a part of future work.

Author Contributions: Conceptualization, R.S.; methodology, A.G. and D.B.; formal analysis, D.B.;
investigation, N.P.; resources, B.T.; data curation, S.V.A.; writing—original draft preparation,
S.V.A.; writing—review and editing, A.G.; visualization, R.S. All authors have read and agreed to
the published version of the manuscript.
Funding: The APC was funded by Tshwane University of Technology, South Africa.
Institutional Review Board Statement: Not Applicable.
Informed Consent Statement: Not Applicable.
Data Availability Statement: Not applicable
Conflicts of Interest: The authors declare no conflict of interest.
Sensors 2022, 22, 6619 28 of 34

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