Lisa Wee, Global Head of Sustainability, AVEVA in this interview with BusinessDay’s Frank Eleanya, speaks on the COP22 where leaders of different nations, institutions and companies are trying to chart the way forward for the climate. AVEVA is pushing for more investments in digitalization which has the potential to not only help achieve commitments in net-zero emissions but also unlock new forms of revenue for investors focusing on Africa.
What is the objective of AVEVA for participating in COP22?
We are here because we think this is a critical decade for taking action on the climate crisis, especially in the current geopolitical context. We want to send a very clear signal that we believe we need radical and more aggressive action on the climate and we need to make sure that as we address the energy crisis we do so with a new focus on climate mitigation goals. We also believe that business is part of the solution, we have to take action to reduce our own climate emissions but we are also a part of the technology solution. We know that technology is key to making progress. So we are here to work with many different stakeholders, with other businesses in terms of the existing partnerships and coalitions that we have, we could also use the opportunity to develop new ones. We also want to speak to different policy stakeholders that participated in the roundtable, for example in the UK, and the EU. We want to hear from all perspectives on the importance of climate but also on how we work to address climate people and biodiversity at the same time.
This is not the first time global leaders are having this discussion on climate change, At the end of the day, it looks as if nothing happened. What do you think has been the missing ingredient in the discussion? And do you think the discussion this year will bring a different result from what used to be?
I think it is important to understand what COP is and what it is not, and how it has evolved. There are multiple COPs. It is a whole ecosystem now where companies meet to form bilateral agreements same with countries. With formal negotiations, I think we need to be realistic because getting countries to agree is a very difficult thing to do.
But that doesn’t mean there is no progress. We have seen a lot of progress in the public-private partnership aspect because we are seeing more business representatives come to COP to push for action. Sometimes businesses are in front of policymakers and they are saying “we have already made decisions on how we run our business and are not going to change those no matter what happens from the policy front.” I have heard this from many energy players. There is a competitive advantage to operating in a low-carbon policy environment already
I think we should be tangible about what needs to be done. Let’s talk about hydrogen for example. We know there is a part of transitioning and moving away from fossil fuel and we are going to need a new Hydrogen economy, a clean Hydrogen economy. The estimates are that it can contribute as much as 20 percent of the total that we need to get to net-zero by 2050.
The problem is not the technology. The technology is not new, it has been around since 2017. The market wasn’t there, we needed a supportive regulatory environment, we needed investment, we needed buy-in from citizens which is the way to go. We are starting to see that with policies like the EU 54 Programme but also the recent inflation reduction Act in the US which provides tax incentives. It offers a ten-year production tax credit for clean Hydrogen production. That changes the financial-economic equation of building clean Hydrogen plants. We now have Hydrogen valleys that are in 18 countries we continue to see this advancement of integrated Hydrogen economy which we need.
How is digitalization helping to drive growth in Africa?
From my perspective, there are huge opportunities because the African continent is so rich in agro resources but also minerals and renewable energy. We have the opportunity here through digitalization to help better harness these resources. Renewable are distributed energy resources. Unlike fossil fuel which is buried in one location or can be developed through a large offshore site, renewable are everywhere. They are very distributed, which means we need digitalization to track where they are and where they are coming from.
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There is the latency aspect, the sun doesn’t always shine, and the wind doesn’t always blow. What we find is that these technologies are creating vast volumes of data. Digitalization helps you to manage that data in a way that you can analyse it, predictive analytics understand why how you can reconcile supply and demand. It has an important role to play whether that is renewable you put on rooftops and we are seeing the emergence of microgrids in Nigeria and others, also in building renewable at scale. A good example of where we have seen that is the thermal solar power plant. It is the largest solar power plant in the world and it is in Morocco. It is about 10 kilometres and it is a field that is made of 2 million mirrors. The land area is the same size as Rwanda and Angola just to give you a sense of how big this field is. We need to be thinking about renewable at scale. That project alone supplies about 6 percent of the country’s energy needs right now.
How do you manage data coming from 2 million mirrors?
You need digitalization. You need a system of systems which is part of the solutions that AVEVA provides where you are able to control the data flows that come in from the field. You are able to calibrate that. You are able to make adjustments and conduct maintenance without having to shut the whole system down. You don’t want to be the person that is asked to walk out into that field and find out which of those 2 million mirrors is not working and why. We have smart analytics to understand where the problem is and isolate it, without having to do unplanned shutdowns on a project of that scale.
How can other African countries leverage what Morocco has done?
That is where we need public-private partnerships because the technology is there but we need funding for large-scale projects. Very often that is now coming through formal blended finance so when the private and public sectors get together to co-fund initiatives when we work with multilateral institutions like the World Bank to support some of these larger projects. What I think is really important to understand is what we have seen with digital technology is the software in particular very often, if you implement it becomes an opportunity to create new sources of revenue for companies. It is not just a cause. For example, we have worked in the US with a very large power grid company and because they had implemented a historian system that tracks in real-time where the energy resources are coming from the grid, wind and solar energy, they are able to validate the commitments of some of their customers are making and they are creating a whole new source of revenue from transparency because so many of their customers now are making that zero pledges but they need proof or validation that the energy resources are actually brilliant. Because of technology, they are able to validate that and it is generating a new stream of revenue.
Similarly, we have been working with a lot of smart cities. That is another area I hope we will see a big radical expansion of smart city infrastructure in Africa. We have been working with the 100 cities programme in India. Our team has just come back from the Pune province. There we built a unified operational control for the city. It brings in all the data that comes from water, sewage, energy use traffic lights, and street lights. It connects everything but it also connects civic services so that you can talk to your citizens all at one time. Obviously, you need to invest in developing the programme but now we are finding that through this digital platform you can have another revenue stream which is coming from advertising because they are connected to their citizens. They use it as a form to advance public health. They used during Covid-19 to put out information. They had a whole digital kiosk to help get their community vaccinated. Now they have discovered that through this digital platform there are new revenue streams. Sustainability and profitability go hand-in-hand.
What role are you playing in reducing the cost of deployment of climate technologies?
Apart from the examples I gave earlier, we are also talking about efficiency which is a huge opportunity, especially in heavily intensive sectors like mining. If we can get more efficiency in the development of these resources we will have huge carbon savings and financial savings. We have been working with the largest desalination plant in Egypt. They have seen a 20 percent increase in process efficiency and what that means is that they are able to accelerate the rate at which they develop clean water and also with energy savings. When we talk to our customers we talk about the sustainability benefits as well as the financial savings that come from saving energy.
Talk to us about First Movers coalition and AVEVA’s role in it.
We joined the First Movers Coalition because we wanted to lead by example. We wanted to say as a technology company we appreciate that it can be expensive to develop low-carbon technology but we believe it is the right thing to do. We are willing and committed to using our global purchasing power to send a clear demand proposition to the market that we want to buy low-carbon products. We are willing to pay a price premium. We have made a commitment to aviation fuel.
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