Schneider Electric's Alexis Grenon
As the last generation with the ability to stop the current climate change trajectory before the damage is irreversible, it’s critical that we prioritize taking the fastest paths to decarbonization. Since 80%t of carbon emissions are energy related, to do this, we must fundamentally change how we produce and consume energy. The industrial sector uses “more delivered energy than any other end-use sector, consuming about 54% of the world’s total delivered energy,” according to the US Energy Information Administration. Industry 4.0's increasing interconnectivity and smart automation presents the opportunity for manufacturing to take a leading role in changing the status quo around energy consumption.
Beyond Industry 4.0, the need to embark on Electricity 4.0
In addition to the Industry 4.0 evolution, smart industries will need to go through another transformation: Electricity 4.0 with more “power” IoT, connected electrical devices, and smart energy management. Eventually, connecting power and process will be key to strike the best compromise between process efficiency and energy transformation.
A joint Bloomberg New Energy Finance (BNEF)-Schneider Electric assessment recently found that solar is a major under-tapped opportunity, with the potential to see 167 million households and 23 million businesses worldwide hosting their own clean-power generation by 2050. Electricity is the only energy that offers a fast vector for decarbonization through a combination of renewables and digital-software-led solutions. The right investments could make the next ten years the “electric decade,” with the potential for digital-manufacturing professionals to take the lead on these decarbonization efforts as part of the ongoing digital transformation of manufacturing.
Electricity, an old technology to which we rarely give a second thought, is evolving and more top-of-mind than it has been over the last decade. As new generations focus on going green, we are welcoming the future with Electricity 4.0, powered by clean, renewable energy. Similar to how Industry 4.0 has redefined manufacturing technologies, Electricity 4.0 rethinks manufacturing’s way to a net-zero future.
Rather than using carbon-heavy sources like fossil fuels, tomorrow’s electricity must be made from clean sources such as solar or wind. As part of this switch to electricity powered by renewables, digital technology is helping to identify and eliminate any waste of our resources due to inefficiencies in our systems.
How can we bring to life this low-carbon future powered by a reliable, resilient supply of smart and clean renewable electricity?
How smart industries contribute to the grids of the future
In addition to this “internal” transformation, smart industries will need to interact more with the grid as they become significant prosumers. That means manufacturers will become increasingly critical stakeholders of the Grids of the Future. The only way to balance supply and demand and decarbonize the grid will be manufacturers interfacing more dynamically and automating more in their relation with the grids. This can happen through software or more services like virtual power plants and demand response.
Manufacturers that embrace this transition to renewable energy can achieve greater sustainability, reduce energy losses, and have increased abilities to meet new or growing demand for electricity consumption. One significant barrier to this transition is that existing electric grids were often built decades ago and struggle to rise to the evolving energy needs of the 21st century. That’s why urgent investment in bi-directional grids is needed to enable this energy transition. Smart bi-directional grids enable multiple sources of locally generated, decentralized renewable energy to combine safely, reliably and efficiently while preventing energy losses. This will empower manufacturers to generate and control their own electricity, helping to create more sustainable plants with smart energy systems.
Unlocking net-zero possibilities in manufacturing
In addition to these bi-directional Grids of the Future, all roads to decarbonization for manufacturers will rely on distribution utilities (DSOs) that manage the essential infrastructure for the energy transition. Smart manufacturing can't just be about using new technologies to increase the bottom line; manufacturers should use advanced technology to unlock the gates of the net-zero future.
DSOs enable businesses to generate their own renewable energy through solar and microgrids and sell excess back to the grid. Manufacturing plants with their own energy-creating capabilities have a competitive edge by optimizing energy usage to reduce production costs.
Technology can help to equip distribution utilities with data gathering, data management and advanced analytics solutions that enable digital to accelerate the hard work of decarbonization. Solution providers can help industrial operations take on this challenge of adjusting infrastructure with its software-driven modeling, design, and real-time predictive simulation of power systems.
Technological solutions can facilitate the ability to enroll industrial operations to virtual power plant / demand-response programs, interacting with DSO Advanced Distribution Management System (ADMS) and Distributed Energy Resources Management Systems (DERMS). The key to the successful implementation of technology with DSOs is ensuring the delivery of end-to-end lifecycle digitalization and enhanced efficiency, sustainability and resiliency.
We can’t successfully address climate change without working together to create a more electric and digital world. As the most efficient energy source, electricity is the fastest path to clean energy and rapid decarbonization. Promising technologies have the power to transform manufacturing into a cleaner, greener industry and to integrate it in the overall distribution systems, leading the fight forward for decarbonization.
Alexis Grenon is senior vice president of digital grid at Schneider Electric
