For Building a better world: Transforming with Sustainability & Innovation as devised in an Arcadis blog article by an experienced professional could be a wise roadmap for all.
Our world today is faced with significant challenges. Less urban spaces for growing populations. Energy supply disruptions and increasing energy bills. Hotter summers and harsher winters. Rising sea levels in coastal zones and heightened drought conditions in other areas. With so many shared challenges, there are opportunities to overcome them if we remove the constraints that are holding us back. Are we standing in our own way?
The last five years have seen the dawn of a new reality for the design, engineering and consultancy industry. While the pandemic slowed down projects, impacting budgets and forecasted work in some industries; our sector saw the decades-long traditional business operating model pushed to evolve, leading to new revenue streams and subsequently, the demand for an evolving, highly skilled talent base.
And with fast-approaching net-zero targets and new policies and regulations around environmental, social and governance (ESG) considerations, our industry is faced with increasing pressure to adopt new technologies and sustainable practices at pace with the transformation ahead.
We are at a critical juncture, and there are also huge market opportunities to thrive in tomorrow’s world. To truly change, global collaboration and integrated projects are the way forward. Practically this would mean moving beyond ‘time and materials’ contracts to explore more agile and attractive business models. We can’t do it alone.
Our efforts as designers, engineers, scientists and consultants to action transformative progress can only be fruitful if clients too are willing to evolve and incentivize change. It makes business sense too. Over the last five years, stock funds that were weighted towards companies with positive ESG scores have outperformed across global markets1. Inaction today will not only hurt the world, but also our collective ability – clients and consultants alike – to benefit from investing in tomorrow.
There has been some progress. From the increased adoption of technology and automation in projects, to shifts in consumer preferences for sustainable and socially conscious businesses and purchase decisions. While all this has led to changing expectations around types of services, it hasn’t yet shifted the dial far enough on ‘delivery’ mechanisms, how we are contracted to work and business partnership and incentive models to meet these trends. Therein lies the biggest opportunity for us to move the needle.
Digitalization – reshaping processes and solutions
According to PwC2, by 2030, up to 45% engineering activities could be automated using advanced technologies like Artificial Intelligence (AI), likely leading to significant productivity gains and cost savings. The Economist’s World Ahead 2023 analysis unpicked ‘Mixed Reality’ as an important trend. Advanced language models too, can be particularly beneficial in consultancy work in identifying data patterns, and generating insights for informed recommendations and decision making3. Are we ready to unlock the full potential of fast-evolving developments like this?
Data analytics and innovative technologies can improve project delivery, providing opportunities for improved decision making, collaboration, communication, and greater accuracy. In cities, for example, implementing AI systems will reduce water waste and predict demand more accurately, with smart meter installations expected to grow 28% by 20264. At Arcadis, we are already seeing promising pilots in the City of Canton, Ohio. By integrating data sources and running AI models, we have developed digital twins that create a virtual model of the utility company’s water distribution system, helping them reduce water loss by analyzing data to identify leaks in real-time, significantly earlier than could previously have been found.
Sustainability and ESG considerations have been driving forces for the transformation of various sectors. For example, as the demand for renewable energy increases aligned with net zero goals, engineering and design firms are increasingly advising on decarbonization strategies and projects related to solar, wind, and other forms of clean energy. The automotive industry is also undergoing a significant transformation as electric and autonomous vehicles become more prevalent. And the built environment sector is seeing a trend towards green buildings, retrofitting existing buildings and livable urban spaces.
An integrated project approach
Mega trends like climate adaptation and rapid urbanization are pushing businesses to realize that solutions to these problems cannot be achieved in isolation. For example, to solve decarbonization and reduce energy use, we are seeing much greater collaboration and integration between energy users across all sectors, including buildings, transport, and industry, with power producers and utility providers. Projects too are moving in a similar trend, with fast-changing regulatory, societal and market environments adding pressure. Clients are looking for partners who can work shoulder-to-shoulder with them through all stages of a project, from co-creating strategies through to implementation, making sense of the evolving landscape and the business case for investment. In the UK, for example, we are supporting Transport for North which covers cities including Manchester, Liverpool and Leeds with their decarbonization strategy, providing them with confidence that they are future proofed as they look to act on climate change.
All this is also leading to a shift in mindset – from focusing purely on siloed projects to wider solutions that integrate responses to water, energy and climate challenges. There’s a huge benefit in this integrated, systems-thinking approach. By 2050, the integration of sectors such as energy, transport, and buildings could result in cost savings of up to €200 billion per year in the European Union5 alone. And, from a socio-economic perspective, the integration of services such as water, wastewater, and climate resilience is key to achieving sustainable resilience in cities, posing a strong future business opportunity6, as demonstrated by the Wuhan Sponge City program.
While we have certainly transformed over the last few years, the question remains: are we moving fast enough? What practical steps can we take to adapt today so that we can continue thriving in the future?
Let’s be honest, the biggest needle movers of our time are sustainable practices, powered by innovation and digital tools that build resilience into our cities. As an industry, we have a significant opportunity to help mitigate the impacts of climate change through a focus on sustainable development and operations. However, with the IPCC warning that we are already falling behind, urgent action is needed to accelerate efforts. Projects need to have a more holistic, integrated approach, also considering the impact on society, particularly as challenges like climate change, water scarcity and energy affordability disproportionately affect vulnerable communities. This urgency requires immediate action from all stakeholders to create a more sustainable future for all. Considering nature and biodiversity, carbon emissions, and social impact in the planning and implementation of projects should be a given. Planning resilient cities will be key.
There is no single solution or organization that has all the answers. But collective working and partnering with other like-minded organizations can help the industry progress. For instance, digital disruptors bring to the table new technologies and a unique understanding into consumer buying behaviors and preferences. These present data and pain point insights which, if used effectively, will not only bring value at various stages of the project, but also help create better, more inclusive solutions for all. And we need to be bolder about the risks we take. New solutions like ChatGPT may seem intimidating, but if used effectively, can enhance processes and free up time for value added work. Working together and putting aside differences to achieve these common goals, supported by modern technologies, can help truly accelerate our industry’s transformation.
How are we creating the right environment, business models and opportunities for the transformation needed?
Building a strong talent pool, into the future: By 2028, one-third of skilled workforce will retire at a faster rate than younger workers enter the field to replace them, leaving more than 3 million skilled trade jobs unfilled7. Our industry and clients are seeing the greatest workforce transition of our time – with capability availability, early retirement and gig working being areas of concern that we need to anticipate and be ready for. These pose both a challenge, and a prospect. While there’s loss of institutional knowledge, there’s also an opportunity to drive ground-up change and new ways of thinking. Focusing on an agile workplace with space to develop and upskill will be key in creating employer attractiveness and ensuring we have the right people working on the right projects. We too are seeing this transformation and are taking steps to stay ahead. Arcadis’ Global Collaboration Policy, for instance, removes barriers to collaboration, cross teams and cross borders. And, through Arcadis programs like Digital Base Camp, Sustain Abilities, the Energy Transition Academy and Quest, powered by the Lovinklaan Foundation, we are investing in a learning platform for people to upskill in sustainability and digital, and also, expand their skillsets and learn-on-the-job from other teams through funded experiential project work.
But that’s not enough. We need to relook at how our industry operates, and get more hands-on-deck to help lead our industry’s transition. Consultants and clients alike need to be comfortable with being uncomfortable, taking measured risks with new ways of working and business models. To create space for sustainable practices, innovation and development, our traditional business model needs to shift from purely billable hours towards recognizing the value provided by employees. And leverage partnerships to go further. Finding partners to co-create with us can provide access to complementary skills, shared resources, and help us expand our market reach. Together, we can spark new ideas and solutions that may not have been possible otherwise, like our eCATS team in the Netherlands did when developing an innovative solution to transform redundant natural gas infrastructure for renewable energy storage.
The challenge ahead may seem daunting, but the time to act is now. We must be open to taking risks and testing new pilots and technologies, bold in our commitments around sustainability and willing to try new partnerships to accelerate our industry’s transition. Thriving in tomorrow’s world requires action today – no one organization has all the answers, but collectively, we can create solutions for a sustainable future.
Looking ahead, we’ve taken the best ideas, innovations and examples of integrated projects to shape six strategic pillars that can be considered to thrive in carbon neutral and prosperous cities of the future: Explore our perspective: ‘Charged up for Change’
This article by Alex Kimani was on oilprice.com and republished on The Tide‘s OIL & ENERGY. It concerns how High Oil Prices Fueling Middle East’s Renewable Energy Boom, which is elaborately assessed.
The image above is of OilPrice
In a fairy-tale turnaround that few could have foretold, oil prices have soared to multi-year highs, largely aided by strong post-Covid-19 demand, surprise OPEC+ cuts and the disruption caused by Russia’s war in Ukraine.
The petrodollar windfall has really given a boost to previously battered Gulf economies, allowing some Gulf Arab states to pay down debt and others to diversify their oil-reliant economies in very big ways.
All the six Gulf Arab states – Saudi Arabia, the United Arab Emirates, Kuwait, Qatar, Bahrain, and Oman – are on track to post budget surpluses, many for the first time in a decade, thanks to buoyant oil prices and years of fiscal reforms.
But it’s not just the Arabian oil giants that will be enjoying the good times. In its latest forecast, the World Bank has predicted that in 2023, the entire Middle East and North Africa (MENA) region will grow 3.5%, more than twice the global average growth rate of 1.7%, thanks mainly to high energy prices and increased oil production.
GCC growth is expected to stabilise at 3.7% this year after expanding at a blistering 6.9% clip in 2022.
Although hydrocarbons remain the backbone of MENA’s economy, the realities of climate change, and wild oil price swings have been forcing Gulf nations to restrategise and diversify their economies away from oil, and Saudi Arabia is leading the way, again.
Although Saudi Energy Minister, Prince Abdulaziz bin Salman, recently made waves in the oil community after telling Bloomberg News that Saudi Arabia intends to pump every last drop of oil and is going to be the last man standing, Saudi Arabia has crafted one of the most ambitious clean energy blueprints: Crown Prince Mohammed bin Salman’s Vision 2030 economic plan.
In the economic plan, Saudi Arabia has set a target to develop 60 GW of renewable energy capacity by the end of the decade, which compares with an installed capacity of roughly 80 GW of power plants burning gas or oil.
So far, Saudi Arabia has only made limited progress deploying renewables with just 520 MW of utility-scale solar in operation while 400 MW of wind power is under construction.
With its sun-scorched expanses and steady Red Sea breezes, Saudi Arabia is prime real estate for renewable energy generation.
Last year, Saudi Arabia’s national oil company, Saudi Aramco, sent shockwaves through the natural gas markets after it announced that it was kicking off the biggest shale gas development outside of the United States.
Saudi Aramco said it plans to spend $110 billion over the next couple of years to develop the Jafurah gas field, which is estimated to hold 200 trillion cubic feet of gas.
The state-owned company hopes to start natural gas production from Jafurah in 2024 and reach 2.2 Bcf/d of sales gas by 2036 with an associated 425 million cubic feet per day of ethane.
Two years ago, Aramco announced that instead of chilling all that gas and exporting it as LNG, it will convert it into a much cleaner fuel, Blue hydrogen.
Saudi Aramco has told investors that Aramco has abandoned immediate plans to develop its LNG sector in favor of hydrogen.
Nasser said the kingdom’s immediate plan is to produce enough natural gas for domestic use to stop burning oil in its power plants and convert the remainder into hydrogen. Blue hydrogen is made from natural gas either by Steam Methane Reforming (SMR) or Auto Thermal Reforming (ATR) with the CO2 generated captured and then stored.
As the greenhouse gasses are captured, this mitigates the environmental impacts on the planet.
Last year, Aramco made the world’s first blue ammonia shipment, from Saudi Arabia to Japan.
Japan, a country whose mountainous terrain and extreme seismic activity render it unsuitable for the development of sustainable renewable energy, is looking for dependable suppliers of hydrogen fuel with Saudi Arabia and Australia on its shortlist.
The Saudi government is also building a $5 billion green hydrogen plant that will power the planned megacity of Neom when it opens in 2025.
Dubbed Helios Green Fuels, the hydrogen plant will use solar and wind energy to generate 4GW of clean energy that will be used to produce green hydrogen.
But here’s the main kicker: Helios could soon produce green hydrogen that’s cheaper than oil.
Bloomberg New Energy Finance (BNEF) estimates that Helios’ costs could reach $1.50 per kilogram by 2030, way cheaper than the average cost of green hydrogen at $5 per kilogram and even cheaper than gray hydrogen made from cracking natural gas.
Saudi Arabia enjoys serious competitive advantage in the green hydrogen business thanks to its perpetual sunshine, wind, and vast tracts of unused land.
Germany has said it needs “enormous” volumes of green hydrogen, and hopes Saudi Arabia will become a key supplier.
Two years ago, Germany’s cabinet committed to invest €9B (about $10.2B) in hydrogen technology in a bid to decarbonise the economy and cut CO2 emissions.
The government has proposed to build an electrolysis capacity of 5,000 MW by 2030 and another 5,000 MW by 2040 over the next decade to produce fuel hydrogen.
The European economic powerhouse has realised it cannot do this alone, and will require low-cost suppliers like Saudi Arabia especially as it doubles down on its green energy commitments following a series of devastating floods in the country.
Back in 2021, the Emirates Nuclear Energy Corporation (ENEC) announced the commissioning of the country’s first-ever nuclear power plant, the Barakah Unit 1.
The 1,400-megawatt nuclear plant has become the single largest electricity generator in the UAE since reaching 100% power in early December, and is now providing “constant, reliable and sustainable electricity around the clock.
“ENEC says Barakah unit 1 is “now leading the largest decarbonisation effort of any industry in the UAE to date.”
Following in the footsteps of Saudi Arabia, the UAE is also laying a strong foundation for the energy transition.
Masdar, the clean energy arm of Abu Dhabi sovereign wealth fund Mubadala, is building renewable capacity in central Asia after signing a deal in April 2021 to develop a solar project in Azerbaijan.
Since its inception in 2006, Masdar has built a portfolio of renewable energy assets in 30 different countries, having invested about $20bn to develop 11GW of solar, wind and waste-to-energy power generation capacity.
And now Masdar says it intends to apply the lessons gleaned abroad to develop clean energy capacity back at home.
“Solutions we have developed in our international operations will definitely have applications here in the UAE”, says Masdar’s El-Ramahi.
By: Alex Kimani
Source from Bloomberg News
In its article on Risk and resilience in the era of climate change, Brookings concludes that the ‘need is more significant than ever for regional and global cooperation in generating climate finance and scaling up investments in climate mitigation and adaptation’.
By Vinod Thomas, Distinguished Fellow – Asian Institute of Management, Manila. Former Senior Vice President – World Bank
Once thought to be sporadic and only affecting faraway places, the profile and timetable of climate change have changed dramatically to be on the calendar of every country. Take the forecast that sea levels along the U.S. coastline will rise by a foot over the next 30 years—as much as the increase in the previous 100 years—wreaking havoc in low-lying regions. Faced with such trajectories, it will no longer be enough to cope and build back after disasters, but governments, businesses, and individuals need to anticipate and “build forward”—the central message of “Risk and Resilience in the Era of Climate Change,” published on April 4.
That the climate danger no longer lies over the horizon is vividly shown by extreme weather aggravated by climate change already destabilizing energy supplies and creating shortages (Figure 1). This, coupled with the demand for more cooling during unseasonably hot summers, is stoking energy insecurity, prompting even greater fossil fuel use—as Europe and South Asia have seen in recent months—driving up effluents and worsening the climate crisis. If this continues, “circuit breakers,” such as a cross-country moratorium on new oil, gas, and coal projects will be needed—and accompanied by a very aggressive push for renewable sources—to avert a full-blown climate catastrophe.
Precious decades have already been lost to decarbonize to a level that will avert catastrophic climate change. Now, nothing short of transformational change is needed to alter the pattern of economic growth to a more environmentally sustainable one. That includes mainstream economic policy—and the theories that go with it—to abandon the obsession with short-term gross domestic product (GDP) growth. The targeting of this at all costs led to a mentality in which any type of growth, including an ecologically destructive pattern, is deemed good. A point in case is the East Asian “miracle” during 1970-90.
The focus must shift to truer measures of growth that deduct the spillover harm from carbon-polluting industries and environmental and ecological degradation from the growth process. Ranking countries based on measures that net out this damage will help emphasize the quality of economic growth and encourage more sustainable patterns of investment.
Far-reaching change will occur only with clear accountability being assigned to the sources of the climate conundrum. It is vital to attribute climate change squarely to the relentless emissions of GHGs from using fossil fuels. Equally, it is key to communicate this link to the public and policymakers precisely when climate disasters strike. The public everywhere increasingly identifies climate change as a top global risk, but nowhere does it flag climate change as the highest priority for domestic investment, which must increase in the era of climate change.
Policymakers will need to use the economists’ toolkit to alter the trajectory of climate change. The economics of spillover harm or negative externalities, usually a section in economics textbooks, needs to become a staple of growth economics. Making it so would signal the merits of decarbonizing economies. It would, for example, motivate the use of carbon pricing via a carbon tax levied on the source of pollution—as South Korea and Singapore have done, or through carbon trading—as the European Union and China are doing.
The economics of spillover harm has wide-ranging implications for development projects. All projects must pass a test of resilience to climate change and be accompanied by legal covenants on mitigation and adaptation. Development programs should avoid the use of fossil fuels, in addition to doing away with subsidies for this pollution source. High-income countries should provide vast climate financing to low-income countries, following the minimal progress achieved on this at COP27. Climate financing would be helped if the world’s multilateral development banks were to strike an alliance on climate action—particularly those with new climate agendas, such as the International Monetary Fund, the World Bank, the Asian Development Bank, and the New Development Bank.
Global dangers from pandemics to geopolitical conflicts to global warming, when taken together, paint a picture of low-probability but high-impact risks (the so-called “black swans”) becoming high-probability and high-impact ones (“gray rhinos”). Accordingly, building resilience needs to go beyond simply coping with disasters to preventing them. Innovative approaches to resilience, such as pooling resources across boundaries and getting financing approvals ahead of disasters, are needed as countries face severe shortages of trained staff and financial resources to cope with risk and resilience challenges.
The need is greater than ever for regional and global cooperation in generating climate finance and scaling up investments in climate mitigation and adaptation, much as exhibited during COVID-19. That vast sums can be quickly mobilized to fix global problems, if public opinion is supportive, was dazzlingly demonstrated in the trillions of dollars—$ 15 trillion, by one estimate, in stimulus spending in 2020 to fight COVID-19. In the wake of the existential challenge from runaway climate change, the same political resolve and public support are called for.
Francesco La Camera, IRENA’s director general, says that the global energy transition is ‘off-track’ and urgent action is needed to hit the 1.5C pathway.
A top official from the International Renewable Energy Agency (IRENA) has warned that the global energy transition is off-track, aggravated by the effects of global crises, and that bold, transformative measures are needed for a fundamental course correction in the energy transition.
Speaking during the introduction of the World Energy Transitions Outlook 2023 at the Berlin Energy Transition Dialogue (BETD), Francesco La Camera, IRENA’s director general, asserted that a successful energy transition needed investment and comprehensive policies across the globe. He highlighted that all sectors must grow renewables and instigate the structural changes required for the global energy transition, which will be predominantly renewables-powered.
“The stakes could not be higher. A profound and systemic transformation of the global energy system must occur in under 30 years, underscoring the need for a new approach to accelerate the energy transition. Pursuing fossil fuel and sectoral mitigation measures is necessary but insufficient to shift to an energy system fit for the dominance of renewables,” he said.
“The emphasis must shift from supply to demand, toward overcoming the structural obstacles impeding progress. IRENA’s Preview outlines three priority pillars of the energy transition, the physical infrastructure, policy and regulatory enablers and well-skilled workforce, requiring significant investment and new ways of co-operation in which all actors can engage in the transition and play an optimal role.”
The Preview showed that the scale and extent of change falls far short of the 1.5°C pathway, IRENA warned. While progress has been made, notably in the power sector where renewables account for 40% of installed power generation globally, contributing to an unprecedented 83% of global power additions in 2022.
In order to keep the 1.5°C pathway alive, deployment levels must grow from some 3,000 gigawatt (GW) today to over 10,000 GW by 2030, an average of 1,000 GW annually. Deployment is also limited to certain parts of the world. China, the European Union and the United States accounted for two-thirds of all additions last year, leaving developing nations further behind.
As such, although global investment in the energy transition reached a new world record of US$1.3 trillion in 2022, yearly investments must quadruple to more than $5 trillion to stay on the 1.5°C pathway. By 2030, cumulative investments must amount to $44 trillion, with transition technologies representing 80% of the total – or $35 trillion, the IRENA report added, pointing out that the priority needed to be efficiency, electrification, grid expansion, and flexibility.
Any new investment decisions should be carefully assessed to simultaneously drive the transition and reduce the risk of stranded assets, he stated.
Some 41% of planned investment by 2050 remains targeted at fossil fuels, the report pointed out. Around $1 trillion of planned annual fossil fuel investment by 2030 must be redirected towards transition technologies and infrastructure to keep the 1.5°C target within reach.
Furthermore, public sector intervention is required to channel investments towards countries in a more equitable way, Camera said. In 2022, 85% of global renewable energy investment benefitted less than 50% of the world’s population. Africa accounted for only 1% of additional capacity in 2022.
IRENA’s Global landscape of renewable energy finance 2023 confirms that regions home to about 120 developing and emerging markets continue to receive comparatively little investment, he added.
“We must rewrite the way international cooperation works. Achieving the energy transition requires stronger international collaboration, including collective efforts to channel more funds to developing countries. A fundamental shift in the support to developing nations must put more focus on energy access and climate adaptation.
“Moving forward, multilateral financial institutions need to direct more funds, at better terms, towards energy transition projects and build the physical infrastructure that is needed to sustain the development of a new energy system,” he concluded.
Building owners and utilities must unite on cleaner energy infrastructure. Incentives for behind-the-meter energy management and DR are crucial for two-way communication with the grid and driving existing/emerging technology to improve operations and costs, making the energy transition universally profitable.
Climate change, the transition to renewables, and electrification trends are major factors impacting energy costs and reliability today. Sustainable practices are increasingly demanded, inspiring action from governments, utilities, consumers, and the investment community to support a cleaner behavioral shift. While electrification is absolutely critical to achieving energy independence, in the short term it will lead to increased, unpredictable energy demand which changes the power curve and collides with the need to decarbonize as much as possible.
Earlier this month I was fortunate to attend CERAWeek, a massive energy conference organized by S&P Global, which brought together worldwide leaders from across the energy industry to share insights on the quickly changing landscape. This year’s theme of the energy trilemma was apparent – how do we balance energy security, transition, and affordability? It’s clear, despite the global movement to fight climate change we are not on track to meet our collective goals. Whether it’s a state-mandated renewable portfolio standard percentage for a utility to comply with or a publicly traded company pledging to have net zero emissions by 2050, the time to act is now. And commercial buildings, which are frequently overlooked, need to be a key part of the equation. As I reflect on my experiences at the event, some key takeaways stick out.
Efforts to decarbonize our energy supply are appropriately focused today on renewable generation technologies like wind and solar. Beyond that, the IRA will act as a catalyst for the expansion, research, and development of geothermal, nuclear, carbon capture, and hydrogen. This focuses on the supply side of the equation, but it is clear we also cannot forget about the demand side of the equation. Even a careful transition of supply is expected to result in energy price increases and grid reliability challenges. At the end of the day, we need to add more clean supply sources but to get to net zero we must also focus on demand at the edge of the grid and decarbonization. Disparities between planned supply and actual demand need to be coordinated and flexible. By focusing simultaneously on both sides of the meter, we can achieve this, providing the perfect opportunity for technology to make the connection.
A closer look at energy use puts the spotlight on buildings yet again. According to the International Energy Agency (IEA), the current built environment is responsible for nearly 30% of global energy consumption and over 90% of buildings in the US are under 50,000 square feet. Historically, energy efficiency programs for buildings have either focused on the residential sector (think smart thermostats) or on larger buildings (with heavy control systems), creating a major gap in programs for small- to medium-sized commercial buildings.
The U.S. Environmental Protection Agency estimates 30% of the energy used in commercial buildings is wasted, forcing building owners and operators to take a closer look at consumption. HVAC and lighting represent a significant portion of fixed costs for commercial facility owners and operators, creating a major opportunity to improve energy efficiency, reduce consumption and strengthen resiliency. The key is better understanding the energy profile of a building, and implementing smart technology can coordinate energy-consuming assets to maximize efficiency, minimize risk and identify future opportunities.
Building operations must adjust to pricing, extreme weather, peak demand, maintenance requirements, and other needs to maintain a suitable environment for those within. Smart buildings that incorporate an energy management system (EMS) enable facility professionals to make informed decisions about comfort, quality, energy efficiency, and sustainability – all in real-time.
While temperature is a large component of employee and customer comfort, simply changing the thermostat is not always the best path forward and could significantly raise building energy costs. An EMS is a group of hardware components that work together to monitor and control a building’s energy use. It typically includes sensors that monitor real-time data from key assets within a building, such as lighting, ventilation and heating/cooling equipment, which then process the data through software algorithms to control energy usage and generate alerts if any issues arise.
As we look at what it will take for grid modernization and digitalization, technological innovation presents an incredible opportunity to make clean energy impactful for everyone in a way that works on an individual level. One size doesn’t fit all, and the technology approach needs to be customizable and scalable.
Technologies that capture live energy data enable that granularity and empower stakeholders to visualize what’s happening in front of and behind the meter in real-time. On an individual level, this enables stronger decision-making for operation efficiency, empowers end-users to participate in grid interactivity, and provides insights to transform the existing power system.
Aggregating virtual capacity across multiple locations unlocks the decarbonization and resiliency required for a cleaner tomorrow on a wider scale. A network of grid-interactive buildings connects the energy market (suppliers, utilities and grid operators) with a variety of distributed energy resources. For utilities, it means ample on-demand capacity that can be called on within minutes to stabilize the grid during times of peak demand. For businesses, it means lower energy costs, lower operational costs, and more resilient buildings ready to withstand long-term energy infrastructure changes.
Technologies that exist today could be making a much greater impact, however various barriers to adoption limit scalability. To make grid participation more attractive, there are three areas that need to be addressed: financing, affordability, and deployment. Business models matter and the key is making “the energy transition” profitable for those that need to participate. Innovative financing models, such as subscription-based or as-a-service options, can remove capital barriers to accelerate technology deployment and incentivize program adoption. Corporations will ultimately pick up the tab and must find ways to offset these costs—and risks.
CERAWeek displayed a genuine combination of leaders representing governments, oil and gas, climate activists, and emerging tech coming together to forge an all-of-the-above path forward despite numerous timing, technology, regulatory, and coordination challenges. The future of energy is a challenging, interconnected puzzle that bridges politics, policy, infrastructure, technology, geography, economy, and environmental goals. Seeing leaders representing these groups unite for an open dialogue on the path forward was encouraging.
Commercial buildings in particular are critical to the energy transition, and they need solutions that reduce complexity and costs. By incentivizing businesses operating these buildings to adopt technology and make their buildings grid-interactive, businesses can reduce costs, play an active role in grid stability, operate more efficiently, deploy cost-effective strategies, and become more resilient to quickly changing energy trends without impacting operations. There are a variety of existing and emerging technologies that can make the energy transition impactful, affordable, and easier to implement today to achieve impact.
Mark Danzenbaker is the CEO of GridPoint, a leader in building energy management and optimization technology that decarbonizes commercial buildings and accelerates a more sustainable energy future. Danzenbaker joined GridPoint in 2009 and has served in several leadership positions before being named to his current role in 2016.
Danzenbaker drives GridPoint’s efforts by creating a network of smart, efficient, grid-interactive buildings and working with commercial buildings, utilities and technology partners. To date, GridPoint has saved customers hundreds of millions of dollars in energy costs, reduced billions of kWh in electricity and eliminated billions of lbs. of carbon emissions.