Holistic energy management: Delivering greater efficiency and sustainability
The dawn of a new industrial identity
Barbara Frei, EVP Industrial Automation at Schneider Electric, shares insights on how new technologies can increase productivity and cut costs in manufacturing, while also draw younger generations to careers in the evolving industrial sector.
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Disclaimer: The Reuters news staff had no role in the production of this content. It was created by Reuters Plus, the brand marketing studio of Reuters. To work with Reuters Plus, contact us here.
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Predictive analytics
Using an intelligent piece of predictive analytics software called EcoStruxure Microgrid Advisor, Citycon, a leading owner of city centers in the Nordics, has been able to transform its urban Lippulaiva project in Helsinki to become a “prosumer of energy”. Through its energy management system, it can sustain a “three-dimensional relationship” with energy, comprising energy consumption, energy control and production.
The results speak for themselves. The center has optimized its facility to reduce annual CO2 emissions by 335 tCO2 /year (direct energy savings) and achieve its targeted €3 million investment payback within five years.
AI-optimization techniques can help reduce the peak of consumption, when electricity is often generated by burning fossil fuels, and maximize the use of locally generated, renewable energy. With AI and cryptocurrency accounting for 2% of total global electricity demand according to the International Energy Agency, Schneider Electric is also actively championing a frugal approach to using AI and measuring the emissions generated by the technology. In January 2024 it joined forces with the French standardization body, AFNOR, to develop an “AFNOR Spec on Frugal AI.” This is aimed at defining best practices and encouraging adherence to environmentally responsible AI standards.
Reducing Scope 3 emissions
Energy management, though, isn’t just about optimizing your organization’s own usage. Arguably, indirect greenhouse emissions that occur outside the organization’s direct operations are both more important and more difficult to address. Known as Scope 3 emissions, these occur in the value chain, either from upstream activities (sourcing materials and manufacturing) or downstream activities such as transportation and product use.
In 2023, disclosed upstream emissions from the manufacturing, retail and materials sectors alone suggest a carbon liability of over $335 billion according to CDP, with the WEF (World Economic Forum) stating that Scope 3 accounts for more than 80% of a company’s emissions – or up to 26 times higher than their operational emissions.
By using blockchain technology (transparent information sharing in blocks linked together in a chain), organizations can provide a transparent and unalterable record of supply chain activities, making it easier to identify and address emissions hotspots. Furthermore, AI can help reduce Scope 3 emissions by analyzing emissions data across the supply chain as well as by using predictive modelling to estimate supply chain emissions based on current data and trends.
“Having visibility over emissions data allows businesses to make better decisions about their partners, suppliers and operational processes to reduce Scope 3 emissions,” explains Blum. Schneider Electric’s Zero Carbon Project aims to reduce its own suppliers' operations emissions by 50%, while its Materialize program supports companies in the metals and minerals sector to reduce Scope 3 carbon emissions across their global supplier base.
Creating the circular economy
Improving efficiency and switching to renewables such as solar and wind power are just part of a holistic energy strategy, accounting for around 55% of global emissions according to the Ellen Macarthur Foundation. To reach net zero, organizations also need to embrace the principles of the circular economy.
By eliminating waste, sharing buildings and reusing and recycling construction materials, the Ellen Macarthur Foundation claims it’s possible to reduce emissions in the building sector by 38% by 2050. Similarly, in agriculture, transitioning to a circular economy will help to deliver a ‘food system that builds natural capital and allows nature to thrive’. Indeed, regulations are making circularity a “must-do” especially for European organizations, in part due to the EU Commissions Circularity Action Plan as well as the Corporate Sustainability Reporting Directive (CSRD).
Compliance is not the only reason to embrace circularity. Estimates show that an additional 900 billion Euros could be generated per year by the circular economy compared to a non-circular economy. Further, resource productivity could increase by 3%, resulting in cost savings of 600 billion Euros per year. The European parliament estimates 700 million jobs could also be created in Europe alone.
Delivering transformation
Of course, circularity is not an instant solution. A circular blueprint requires both people and technology to be at the heart of the transformation. Eco-design principles need to be applied to new products so they can be easily disassembled, upgraded or recycled; while a “use again” philosophy is necessary to focus on recirculating products, parts and materials.
Importantly, this transformation can’t be done alone. “You also need to engage with your whole supply chain and partner network to decarbonize as well as offer solutions, consultancy and training to help them meet their sustainability targets,” adds Blum. Schneider Electric’s Ecocare membership scheme helps organizations extend the life of their assets by transitioning from calendar-based to condition-based maintenance, reducing downtime and service costs and resulting in fewer raw materials, less energy and lower levels of embedded carbon. Indeed, the company's solutions and services helped customers save and avoid 440 million tonnes of CO2 since 2018 with more than 90 million tonnes saved in 2022 alone.
Developing digital twins
Looking to the future, technology is expected to play an even larger role in the energy sector. Digital twins using AI, for example, can help track waste and visualize the carbon footprint of a product across its entire lifecycle. Alongside this, they can model and optimize the entire supply chain for energy-related products and services. “By simulating different scenarios companies can identify opportunities to reduce waste, reuse materials and recycle components, leading to a more circular supply chain,” explains Blum.
In smart grids, where digital technology is used to actively monitor efficiency, reliability and sustainability, digital twins can also model demand-response scenarios, helping to balance supply and demand in real time and reduce energy wastage. Smart grids can also help integrate a variety of renewable energy sources, such as solar, wind and hydro power, into decentralized energy systems. Not only does this increase the overall sustainability of the system, it also reduces reliance on fossil fuels.
Tackling the growing climate crisis is going to require a holistic approach to energy management. One that involves ensuring that energy transition, Scope 3 emissions and circularity are all connected. “Strategize, digitize, decarbonize. Those are the three pillars of Schneider’s Electricity 4.0 strategy for a more digital world,” concludes Olivier Blum. “Integrating sustainability into all aspects of your operations and strategy is key to boosting resilience, complying with regulations and making your business more competitive.”
Find out more about Schneider Electric's transformative industrial
solutions HERE
With energy accounting for more than three-quarters of total greenhouse gas (GHG) emissions globally, optimizing its use is key to both reducing costs and protecting the environment. For organizations this means deploying the latest technology-focused energy management solutions.
AI and machine learning have allowed predictive energy models to be built faster than ever before, with data provided by IoT sensors. Through advanced AI algorithms, companies can reduce energy consumption and carbon emissions by optimizing energy-intensive processes such as HVAC systems in buildings, industrial processes and district heating.
Organizations need to adopt the latest technologies, including AI, IoT and digital twins, to optimize their energy use and reduce waste.
Olivier Blum
Chief Executive Officer
Schneider Electric
“Integrating sustainability into all aspects of your operations and strategy is key to boosting resilience”
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Disclaimer: The Reuters news staff had no role in the production of this content. It was created by Reuters Plus, the brand marketing studio of Reuters. To work with Reuters Plus, contact us here.
Disclaimer: The Reuters news staff had no role in the production of this content. It was created by Reuters Plus, the brand marketing studio of Reuters. To work with Reuters Plus, contact us here.
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Schneider Electric is as an Impact company, committed to bridge progress and sustainability for all.
READ MORE
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Will you join us?
Creating impact needs an ecosystem of people, communities, and partners. Impact Makers lead the way to a resilient, electric, and net-zero future.
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Explore 4000+ C-suite decarbonization insights
Companies are allocating 2% of annual revenues to decarbonization over the next 3 years. Discover sustainability benefits and lead the change now.
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How is digitalization shaping the future workforce?
73% of companies say automation & digitalization improve work conditions, boost efficiency, and address better work conditions. Discover more in the Omdia report.
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80% of the UK’s buildings that will be use in 2050 already exist today. Make sure you don’t get left behind on net zero targets or caught up with ever-growing regulations.
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Schneider Electric Net-Zero Commitment
Schneider Electric is as an Impact company, committed to bridge progress and sustainability for all.
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Will you join us?
Creating impact needs an ecosystem of people, communities, and partners. Impact Makers lead the way to a resilient, electric, and net-zero future.
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READ MORE
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Schneider Electric Net-Zero Commitment
Schneider Electric is as an Impact company, committed to bridge progress and sustainability for all.
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Will you join us?
Creating impact needs an ecosystem of people, communities, and partners. Impact Makers lead the way to a resilient, electric, and net-zero future.
Be an Impact Maker
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Companies are allocating 2% of annual revenues to decarbonization over the next 3 years. Discover sustainability benefits and lead the change now.
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Holistic energy management:
Delivering greater efficiency and sustainability
The dawn of a new industrial identity
Barbara Frei, EVP Industrial Automation at Schneider Electric, shares insights on how new technologies can increase productivity and cut costs in manufacturing, while also draw younger generations to careers in the evolving industrial sector.
READ MORE
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