What’s the most important element in speeding up the energy transition?

Peter Koerte

Chief technology and strategy officer at Siemens

Resource efficiency, energy independence, and supply chain resilience are imperative. But we will not be able to tackle these challenges without digital technologies. Digitalization can not only enable industry to greatly reduce its carbon emissions, it can also give us unprecedented trust and visibility into supply chain carbon footprints.

Today, industry accounts for 20% of global carbon dioxide emissions and more than one-third of global energy consumption. Looking at the carbon footprint of a product, up to 90% are created in the upstream supply chain. Creating transparency is a surprisingly complex task because a product’s carbon footprint can only be determined when the information on all components, raw materials, and transportation routes are complete and precise. That’s why we at Siemens initiated an open and decentralized network for meeting this challenge: the Estainium network. Through this network, companies from a wide range of industries and countries can exchange information about the carbon footprint of their products.

But creating transparency alone is not enough. We need to accelerate digital transformation to drive innovation, resource efficiency, and sustainability in industry. One way to do this is with digital twins to simulate the real-world operation of products and systems. This way, we can enable companies to plan and build digitally before they even start building in the real world and begin to consume resources.

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Lila Preston

Head of growth equity at Generation Investment Management

To speed up the energy transition we need three things, all at the same time.

First, we need to electrify everything. As we modernize and decarbonize the grid, the more we electrify, the faster we can move to a net zero future. This includes mass adoption of heat pumps, electrifying stove tops and rooftops, and our vehicle fleet.

Second, we need to mobilize finance. Investment in the clean economy is expected to exceed $1 trillion annually in the next few years. Yet to hit our 1.5-degree goal, Bloomberg New Energy Finance calculates that investment needs to reach $2 trillion by the middle of this decade, then double again by 2030. To achieve those commitments, we need a system in which all investors integrate climate impact into their decisions, and we need to see innovation in transition financing to deploy more capital against the transformational opportunities.

Third, we need to support the best system-positive entrepreneurs across all sectors. Not just leaders who will build best-in-class products, software, and solutions that people will buy, but also ones that will truly drive the transition to a sustainable future. The magnitude of the climate crisis requires all sectors to be transformed: not only energy, transport, agriculture, food, buildings and cities, but also technology, health care, and finance — the very best entrepreneurs should think about their role in a net zero future and put responsible innovation at the core of their business purpose.

We believe this transition will be the most significant opportunity in economic history, but only if we move fast enough to ensure it is successful, and just.

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Donnel Baird

CEO at BlocPower

Workforce! We don’t have enough skilled construction workers in America to meet the challenge of climate change! That’s why we are so excited to partner with Mayor Eric Adams to launch the NYC Civilian Climate Corps, to train ex-offenders and vulnerable individuals to green buildings across NYC using cutting-edge technology!

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Preeti Pande

Chief marketing officer at Plug Power

The major challenge for the energy transition is the current premium paid for green energy over traditional sources of energy. Large-scale adoption of green energy is dependent on closing this price gap.

Green hydrogen — produced by pairing an electrolyzer with renewable sources like wind, water, or solar — can displace diesel and other fossil fuels to enable the transition to a low-carbon economy. This transition is taking shape through sustainable solutions and decarbonization of industries such as transportation (aviation and logistics), energy, power, industrial processes, material handling, and data centers.

While government support is crucial in scaling green energy technologies in the near term, innovation is the most important long-term element to successfully transition the energy economy. To achieve the solutions at scale, continual innovation is needed to drive lower costs, increase efficiencies, and improve durability.

One area that requires more innovation is optimizing the material supply chains. With critical materials in short supply, innovation is needed to improve the efficient use of existing precious materials, while also designing solutions for alternative materials that can achieve similar performance.

As these innovations generate greater levels of efficiency, lower material and labor costs, and extend product lifespans, this will drive down the total cost of ownership and provide the attractive economics needed to speed up the energy transition.

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Steve Wilhite

President of sustainability business at Schneider Electric

The complexity of reducing greenhouse gas emissions is a challenge that organizations, governments, and nations are all actively working to address. One of the most fundamental needs to speed the energy transition and reduce emissions from fossil generation is to remove barriers to clean energy adoption. These barriers commonly include:

• transmission limitations
• finance limitations
• market and legislative regulations
• natural resource constraints

Transmission barriers include aging infrastructure like low-voltage power lines and lines that need to be replaced or repaired and long interconnection queues or geographic transmission barriers between regions like we see in Europe. Financial barriers include the costs of new generation. Market regulation limits who can generate power and how power is traded, and may also be the result of geographic barriers such as physical space or availability of wind or solar resources. We have also seen how unfavorable legislation can impact the development of renewable energy generation. Finally, natural resources will increasingly constrain renewable energy deployment, as solar panels and batteries require rare materials that must be mined and have downstream social justice implications in many cases.

While these complex barriers are real, the good news is that our clients are not waiting for these difficult problems to be solved before they act. They are instead using the tools and options available to them — including their influence — today to move forward and accelerate the energy transition.

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Alyssa Rade

Chief sustainability officer at Sustain.Life

The most important accelerant in the energy transition isn’t any one strategy, but rather a three-pronged approach: regulatory pressures, economic factors, and tech. Alone, each component is insufficient; only together can they achieve sustainable and permanent progress.

Regulations: The Inflation Reduction Act is a perfect example of utilizing policy to steer market conditions. Take for example the series of incentives for the EV industry including tax credits for domestically mined and produced batteries and assembled cars. This not only makes it economically advantageous to electrify transportation, the country’s highest-emitting sector, but also boosts the domestic manufacturing sector and protects the American economy against global supply chain disruptions.

Economic factors: The war in Ukraine highlights the inextricable link between energy independence and economic stability. With fuel prices at all-time highs, the value of producing reliable domestic, renewable, energy supply is clear.

Tech: U.S. VC investment in climate tech increased 80% between 2020 and 2021 with energy and power experiencing the fastest growth, according to Silicon Valley Bank. Despite an economic downturn, regulatory and economic forces have created an ideal environment for tech development when it comes to funding new projects and R&D. The key here is the reduction and ultimate elimination of green premiums, resulting in new, affordable, and scalable technology.

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Ann Moore

Global industry principal of power and utilities at AVEVA

Digital innovation is one of the most important tools in the climate action toolbox. Technology is raising the bar on what companies can achieve and proving that profitable and sustainable growth can go hand in hand. Digital technologies can help achieve up to 75% of the United Nations Sustainable Development Goals, including significant reductions in greenhouse gas emissions. Currently, our research shows that 82% of power sector executives are making key business decisions without full data visibility and insights from plants and assets most of the time. Realizing the global goal of an energy transition is going to demand we rebuild value chains and switch to decarbonized operating models. And, as the world is rocked by energy shocks, we need to ensure that agility and resilience are not sacrificed in the rush to decarbonize.

Navigating this transition will require industries to also undergo a digital transformation. With growing energy demand and increasing focus on energy security and supply resiliency, governments and businesses alike have turned to digital strategies to shape the new energy landscape. Integrated data management, artificial intelligence, and cloud technology are three essential pieces of building that digital infrastructure. Collectively these solutions give businesses the ability to predict probable failures and suggest a set of actions to mitigate losses, problems, or underperformance. From a sustainability perspective, they can help to eliminate fugitive emissions, decarbonize supply chains, and vastly reduce the carbon generated as a result of operations ─ all while increasing revenue.

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