Currently, Saudi Arabia is launching more ambitious projects such as the National Renewable Energy Program (NREP), which aims to increase the Kingdom’s renewable energy, achieve a balance in the energy mix and maintain the heading towards net zero objectives. These goals call for a more sustainable, ethical and equitable approach to electricity – and Electricity 4.0 can be the catalyst to enable these sustainable transformations.
For centuries, industrialization preceded economic growth and prosperity. Many developed economies swear by how manufacturing, transportation and trade have changed their fortunes. As these activities were fueled largely by the burning of coal and fossil fuels, the growth also came at a cost: climate change.
As the impact of climate change becomes more apparent through wildfires, melting glaciers and unseasonal rainfall, what was once a point of contention is gaining more and more consensus. At this critical juncture, urgent climate action will be paramount. The KSA, for its part, has been proactive in its efforts, having claimed to achieve net zero by 2060 and joining the Global Methane Pledge.
If we are to have any chance of mitigating climate change, global carbon emissions must be at least halved by 2030. But, given that climate action is a broad-based discipline, on what should we focus?
Electrification and its synonym of decarbonization
Decarbonization is about reducing or eliminating the use of carbon-emitting fossil fuels in all facets of life – in industries, transportation, or the built environment. Although this could be accomplished through a variety of means, each with its pros and cons, electrification emerged as the most plausible solution. Take electric vehicles, for example: the global market for electric vehicles is expected to grow at a CAGR of 21.7% between 2022 and 2030. The growth of electric vehicles is not due to the lack of other alternatives – there are options involving hydrogen fuel cells and biofuels – but with achievable efficiencies in electrification.
The promise of electricity has prompted us at Schneider Electric to extend its application to all sectors. Given that energy is responsible for more than 80% of global GHGs, a greater share of electricity could be a game-changer on the climate action front. As electricity is inherently 3-4 times more efficient than other energy sources, the case for greater adoption is compelling. We estimate that the share of electricity in the global energy mix should increase from 6% today to at least 40% by 2040. The contribution of renewable sources such as solar and wind to the production of electricity should also be multiplied by six.
To that end, we see greater integration between electrification and digitalization as the logical first step. What we are proposing is not superficial but structural change – change that involves embracing electrification in all areas of life. This change is so important that we at Schneider have coined a term for it: Electricity 4.0.
Electricity 4.0: The necessary evolution
Much like Industry 4.0, the evolutionary phase that marked greater integration between the physical and digital worlds, Electricity 4.0 envisions a more electric and more digital world – a world that gives more and wastes less. Associated practices involve seeing the world through the bifocal lens of digitalization and electrification, improving transparency in electricity distribution, unlocking savings, and expanding applications. Considering that 60% of all energy produced is wasted, Electricity 4.0 has big implications for savings and sustainability. The “zero” of Electricity 4.0 is therefore also symbolic of a zero waste, zero emissions and zero carbon future.
Electricity 4.0 requires the adoption of technologies that can provide deep visibility into how energy is being used in systems. In Saudi Arabia, there is a significant appetite for PropTech that can be retrofitted in buildings, which are notorious for their excessive energy and carbon footprint. The electrification of conventional systems such as central boilers and the implementation of smart building solutions such as meters are opening up more and more possibilities for IoT integration in the regional real estate sector, bringing greater visibility, savings and quality of service.
Similarly, IoT and analytics can be widely adopted in data centers, industries, public infrastructure and networks. In Saudi Arabia, where smart city projects are being pursued vehemently, there is a visible opportunity for the large-scale realization of Electricity 4.0. The plan to revolutionize grid systems as part of KSA Vision 2030 illustrates how the nation has already got the ball rolling. Digital networks have the potential to decarbonize fossil fuel-based energy segments and enable two-way decentralized energy transfers. Equipped with sensors and automated mechanisms, digital grid systems feature self-regulation, centralized monitoring, proactive troubleshooting, and timely alerting capabilities – all while improving efficiency, reducing waste, increasing resilience and ensuring equitable distribution.
Multi-stakeholder participation for Electricity 4.0
Smart digital grids are just the tip of the iceberg when it comes to the total achievable positive impact of Electricity 4.0. Enabling technologies such as Schneider’s EcoStruxure – an open, interoperable, plug-and-play, IoT-driven architecture platform – have been implemented in homes, buildings, data centers, networks and industries to switch to electricity 4.0. We’ve seen up to 80% reduction in engineering cost and time, up to 75% reduction in maintenance costs, and up to 50% reduction in carbon footprint, on average, across all sectors.
These results allowed us to extrapolate the principle of electricity 4.0 to all stages of the life cycle of a product/system. From a simple adoption of smart sensors to a digital network, embracing this idea opens up a pipeline of possibilities. But, as mentioned earlier, the achievable impact depends on multi-stakeholder participation and the immediacy with which we orchestrate it. In Saudi Arabia, high-level policy development and hands-on leadership involvement has facilitated an enabling environment for the ideal incorporation of Electricity 4.0. Privatization and PPPs are on the rise, due to the government’s desire to maximize effort and minimize risk. So, it follows that Electricity 4.0 has found a real admirer in the country, and vice versa.