Kathy Gibson reports – The last 25 years have seen some major global changes, not least in the area of energy and the technology that goes into its provision and distribution.
On a visit to the company’s South African offices last week, Schneider Electric chairperson Jean-Pascal Tricoire reflected on how much things have changed in the industry and across the African continent.
“Twenty five years ago, I helped to set up the team in South Africa,” he says. “Since then, the world has changed – especially as it pertains to how we approach energy.”
With climate change, literally, a hot topic, he points out that carbon emissions are the main culprit – and the provision of energy is at the root of carbon emissions.
“Twenty years ago, we said we wanted to change that – which was a bold direction to take at that time,” says Tricoire. “But we foresaw that two transitions would happen.
“The first is digitisation. The Internet of people has changed everything in our lives, and we are now entering the era of the Internet of Things where we are connecting everything.
“This is going to change the way we live within the environment – and the way we share resources.”
Schneider first introduced the Internet to the shop floor 20 years ago with integrated solutions from grid to server. These now account for 20% of the company’s business.
“Digitisation for more efficiency – that was the mantra,” Tricoire explains.
The second trend that Schneider predicted was the transition of energy to electricity.
“Today we see this massive evolution to the consumption of electricity, from electric cars to just about all new technologies,” he says.
But this has brought its own set of challenges, particularly in the provision of electricity and the subsequent implications for carbon emissions.
And this is driving the convergence of technologies like renewables, batteries, smart grid and micro grid.
It is also responsible, to a large degree, for societal change; and also changes in the way we produce energy.
For instance, in most parts of the world, energy has typically been very centralised. But, increasingly, we are seeing this being complemented by other ways of producing at least some of the energy consumed, Tricoire points out.
This means that sustainability is top of the agenda for any business. “Today, 70% of our engagement is in researching for better sustainability – and digitising for more efficiency and decarbonisation.”
Schneider is heeding its own advice and has transitioned the company to comply with its vision.
More than 50% of its business today is around digitisation; up to 70% of customer engagement is around sustainability; and about 80% about electrification.
Making companies sustainable involves either building greenfield operations or retrofitting the old. In developed countries, there is a lot of work in retrofitting and Tricoire says Schneider is able to get existing installations to carbon-zero using digitisation to make operations more efficient.
In emerging markets, there is more scope for new developments – and there are huge opportunities in regions like Africa and India.
A recent study by Schneider concluded that the number of new builds in India and Africa over the next 25 years will equal the number of buildings in China and Europe today.
“The challenge is to make these new buildings future-proof using new technologies,” he says. “And we are able to do this.”
The numbers show the potential for this region. Devan Pillay, president of Schneider Electric South Africa, points out that in some parts of Africa the company has enjoyed 20% compound annual growth rates (CAGR) – well above GDP.
Much of this growth is from the construction of new data centres, but other aspects of the business are also healthy, with mining and manufacturing also posting good figures.
Tricoire is confident that Africa is going to see huge growth – and Scheider Electric is committed to investing in the continent.
One of the big factors that will drive this growth is a growing and youthful population, he adds. “So there is the need. And there is an opportunity.”
South Africa is a good example, he points out. The electricity crisis and load shedding saw people and companies taking control of their own destiny through the use of solar and other alternative power sources – and also increasing their efficiency through digitisation.
“There have been a lot of pockets of innovation,” he adds. “It’s true that sometimes necessity is the mother of invention.
“Across Africa, there is market demand and there are resources that other continents never had,” he adds. “And there is the push coming from the population.”
In South Africa, Schneider Electric ensures local participation through its partner-led go-to-market model.
“Eighty-percent of our business is through local partners,” Pillay says. “We are committed to local technology transfer, and to including local value-added content.”