By Jean-Pascal Tricoire
We live in an age of dramatic change. Urbanisation and industrialisation are growing at a phenomenal pace. By 2030, India’s urban population, for example, will reach 600 million people. That’s nearly twice the size of United States. Concurrently, climate change and its resultant impact are occurring faster. Over the next 40 years, as historic urban migration leads to 150 per cent more energy being consumed, the world needs to cut carbon dioxide emissions by half to contain the adverse impact of these changes. This means we need to rapidly move to a world at least three times more energy efficient.
The developing world, including India, is no exception where the migration from villages to cities will only gain momentum. India’s demographic dividend – with 12 million people adding to the work force every year – means a young, educated and aspirational worker will look for gainful employment in large towns and cities. I am of the firm view that the challenge of spurt in energy consumption with increased urbanisation and industrialisation and the resultant global warming can be overcome through innovation. The most important energy trends – digitisation, decarbonisation, and decentralisation – are presenting us with the opportunity to do just that: innovate for the future.
But we must be proactive. We must act now. We need to co-create our future.
The only path to efficiency
The Internet of Things (IoT) and digitisation of devices are enabling convergence of Information Technology and Operational Technology which provide new data, automation, and analytics to better manage energy and increase productivity and efficiency. By breaking through silos, digitisation gives us the opportunity to optimise the entire generation-to-consumption value chain. Digitisation should make our lives and value chains simpler, not more complex. So let’s digitise for more efficiency, for more control and for more value.
Decarbonisation presents perhaps the biggest opportunity for improvement in energy efficiency and sustainability. Studies indicate that 82 per cent of cost-effective energy efficiency potential in buildings remains untapped, and the same stands at more than 50 per cent for industry. When it comes to the energy grid, our experience shows that the demand side has the potential to deliver three times the decarbonisation compared to the supply side.
New demand for distributed energy
The adoption of decentralised energy resources is gaining momentum. This is creating opportunities all over the world and across market segments such as solar, micro-grids, smart grid, and grid automation. Decentralisation will continue to grow as we see massive cost reduction of renewable energy coupled with increasing capabilities in the field of energy storage. As for the energy grid, 57 per cent of consumers are already considering becoming power self-sufficient. It’s an exciting new world of prosumers driving the need for micro-grids.
Energising the digital economy
The future of energy is more electric, more digitised, more decarbonised and more decentralised. And our technologies enable these trends. With innovation-driven solutions, we can combine energy technology with automation and software and apply it to four markets – buildings, IT, industry and infrastructure – which altogether represent 70 per cent of the world’s energy consumption.
By leveraging technologies in IoT, mobility, sensing, cloud, analytics and cybersecurity to deliver innovation at every level, businesses and governments can deliver enhanced value around safety, reliability, efficiency, sustainability and connectivity for customers.
As we invest in clean energy and connected technologies, we support these markets with the powerful solutions that are needed to create a sustainable, efficient and bright future by powering the digital economy.
Mr Jean-Pascal Tricoire is the Chairman and CEO of Schneider Electric.