Electricity 4.0 – the catalyst for sustainable transformations in KSA

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At present, the KSA is initiating 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 keep on track to net-zero targets. These goals call for a more sustainable, ethical, and equitable approach to electricity – and Electricity 4.0 may be the catalyst for enabling these sustainable transformations.

For centuries, industrialization has preceded economic growth and prosperity. Many developed economies swear by how manufacturing, transportation, and trade changed their fortunes. As these activities were powered largely by burning coal and fossil fuels, the growth also came at a cost: climate change.

With the impact of climate change becoming more apparent through wildfires, melting glaciers, and unseasonal rains, what was previously a point of contention is increasingly finding consensus. At this critical juncture, time-sensitive climate actions will be paramount. The KSA, for its part, has been proactive in its efforts, having affirmed to go net-zero by 2060 and joined the Global Methane Pledge.

If we are to stand a fair chance of mitigating climate change, global carbon emissions must be at least halved by 2030. But, considering climate action is a broad-based discipline, where should the focus lie?

Electrification and its synonymity with decarbonization

Decarbonization pertains to reducing or eliminating the use of carbon-emitting fossil fuels across all facets of life – in industries, transportation, or the built environment. While this can be accomplished through various means, each with its merits and demerits, electrification has emerged as the most plausible solution. Take electric vehicles, for example — the global EV market is projected to grow at a CAGR of 21.7% from 2022–2030. The growth of EVs is owed not to the lack of other alternatives — there are options involving hydrogen fuel cells and biofuels — but to the achievable efficiencies in electrification.

The promise of electricity has incentivized us, at Schneider Electric, to expand its application across industries. Considering energy is responsible for over 80% of global GHG, a greater share of electricity could be game-changing on the climate action front. As electricity is inherently 3-4X more efficient than other energy sources, the case for greater adoption is compelling. We estimate the share of electricity in the global energy mix to grow from 6% today to at least 40% by 2040. The contribution of renewable sources such as solar and wind to electricity production, too, is set to increase by six folds.

To this end, we perceive greater integration between electrification and digitalization to be the first logical step. What we propose is not a superficial but a structural shift — one that involves embracing electrification across all walks of life. This shift is so paramount that we, at Schneider, 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, more digital world — one that gives more and wastes less. The associated practices involve viewing the world through the bifocal lens of digitalization and electrification, enhancing transparency in electricity distribution, unlocking savings, and expanding applications. Taking into account that 60% of all energy produced is wasted, Electricity 4.0 has great implications for savings and sustainability.

Electricity 4.0 necessitates the adoption of technologies that can provide deep-dive visibility into how energy is being utilized in systems. In the KSA, there is a significant appetite for PropTech that can be retrofitted in buildings, which are notorious for their excessive energy and carbon footprint. Electrification of conventional systems such as central boilers and implementation of smart building solutions such as meters are increasingly opening IoT-integration possibilities in the regional real estate sector, bringing greater visibility, savings, and service quality.

Likewise, IoT and analytics can be adopted at scale in data centres, industries, public infrastructure, and grids. In the KSA, where smart city projects are being pursued vehemently, there is a visible opportunity for the large-scale accomplishment of Electricity 4.0. The plan to revolutionize grid systems under the KSA Vision 2030 exemplifies how the nation has already set the ball rolling. Digital grids have the potential to decarbonize fossil fuel-based energy segments and enable bi-directional decentralized power transfers. Equipped with sensors and automated mechanisms, digital grid systems have self-regulation, centralized monitoring, proactive troubleshooting, and timely alert capabilities — all enhancing efficiencies, reducing wastage, increasing resilience, and ensuring equitable distribution.

Multistakeholder participation for Electricity 4.0

Smart digital grids are only the tip of the iceberg as far as the total achievable, positive impact of Electricity 4.0 is concerned. Enabling technologies such as Schneider’s EcoStruxure — an IoT-led, plug-and-play, open, interoperable architecture platform — have been implemented in homes, buildings, data centres, grids, and industries to leap towards Electricity 4.0. We have registered up to 80% reduction in engineering costs and time, up to 75% reduction in maintenance costs, and up to 50% reduction in carbon footprint, on average, across sectors.

Such results have further empowered us to extrapolate the principle of Electricity 4.0 across all stages of a product/system lifecycle. From a mere smart sensor adoption to a digital grid, subscribing to this idea opens a pipeline of possibilities. But, as mentioned earlier, the achievable impact hinges on multistakeholder participation and the immediacy with which we orchestrate it. In the KSA, high-level policymaking and hands-on involvement from the leaders have facilitated an environment conducive to the ideal incorporation of Electricity 4.0. Privatization and PPPs are on a rise, owing to the government’s bid to maximize efforts and minimize risks. So, it follows that Electricity 4.0 has found a true admirer in the nation, and vice-versa.

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