Any way you look at it, tomorrow's world will need more energy. Given population and economic growth, it's inevitable. But climate and environmental imperatives challenge global growth and leave the world with no choice but to be smarter, more frugal consumers. That's what pursuing energy efficiency is all about. It is a service business that is experiencing rapid growth, and which Total is strongly committed to offering its customers.
There are a host of solutions for meeting the COP21 2 degrees Celsius or less target to check climate disruption. Whether used by individuals, municipalities or industry, energy is a common denominator. That's because 85 percent of the oil and gas industry's greenhouse gas emissions are generated when finished products are used, that is by consumers or users.
Energy efficiency: Explore the Eiffage pilot in Bonneuil-sur-Marne in the Greater Paris region, in an asphalt mix plant at which BHC Energy has been deploying its expertise since 2015.
Although industry isn't the world's biggest energy guzzler1 — contrary to popular belief — striving for maximum energy efficiency has become a serious focus for manufacturers, for at least three reasons. First, the global regulatory environment is mostly moving in the same direction, whether through incentives or coercion. Second, the overwhelming majority of businesses need to respond to society's demands in terms of corporate social and environmental responsibility, mainly with respect to their carbon footprint. And last, there is the constant push to cut costs by optimizing energy use.
Helping the world achieve the 2 degrees Celsius scenario
The market figures speak for themselves. Total estimates its value at about $300 billion globally by 2022. It's a market in which "we want to position ourselves first in six key European Union countries — Germany, France, Belgium, the Netherlands, Luxembourg and the United Kingdom — whose regulations encourage energy efficiency and where there's a clearly expressed demand," says Christophe Girardot. The region has a potential market of $20 billion and Total is well established there. "The growth potential is around 10 percent a year and we're aiming to generate $1 billion in revenue by 2022."
But no one ever said the energy market, much less the energy efficiency market, was simple. Certainly not François de Charnacé, CEO of BHC Energy. In the last 10 years or so, it has been shaken up by the energy sector's deregulation and the collapse of monopolies that goes with it, stricter standards, unpredictable prices, incentives, the advent of renewable and unconventional energies, the adoption of digital tech and more. François de Charnacé notes that: "Many players have positioned themselves in the energy efficiency market. Everyone from original equipment manufacturers to energy companies and start-ups developing monitoring solutions. You also have pure play firms such as consultant BHC Energy that have developed technical expertise in the energy manager field. All of them may take a different approach."
Regulations act as a catalyst for the energy efficiency market. There is a framework, especially in the European Union, which countries adapt to their own specific energy requirements and situations. Despite that, many professionals view the market as dogged by overly long payback periods. "But there are renovation projects in the construction sector that have payback periods longer than 10 years," says François de Charnacé. "You also need to keep in mind that industry prioritizes allocating available capital to production processes; hence the need to recommend efficient equipment, paired with innovative financing options."
The solution is to provide a turnkey, aggregated project. "Total offers packages that include financing," says Christophe Girardot. "It can partly come from Total's own capital, with debt leverage because the financial markets are open to this type of project, or from partners such as investment funds or banks." BHC Energy echoes this assessment. Its CEO agrees that you "have to package innovative solutions that simplify the technical, legal and financial aspects for customers." He also notes that: "Innovation is happening on the financing side, too. Today, investment funds are looking to put some of their money into the energy transition. They need trusted third parties, such as BHC Energy, to provide technical expertise and liaise with industrial operators to identify projects." So Total acts as a technical expert and project aggregator. A win-win for everyone.
Digital technology, now and in the future
Although financing plays a key role in spurring the energy efficiency market, technology isn't far behind. Tackling the energy efficiency of an industrial facility also means taking it straight to Plant 4.0, the shorthand term for connected plants. François de Charnacé explains. "For many manufacturers or real estate companies, the first step in the energy efficiency process was to optimize production tools such as variable speed gears, heat recovery, more efficient equipment and building performance, namely insulation, heating and air conditioning. What's changed radically in the last two years is the importance of data, which will take us much farther in analyzing potential energy savings, using data that wasn't necessarily measured and analyzed. Data management in an energy information system — EIS — will gain more and more value in our energy manager business. That's why BHC Energy developed its Easynergy digital solution."
The Total vice president confirms that: "All solutions, even hardware, are based on digital tech. We have to go out and collect usage and production data at our customers' businesses, to analyze it and produce information and indicators for them so they can manage their energy use and take control of it effectively."
In a near-future world of connected plants and the internet of things (IoT), businesses will be able to monitor and manage production equipment to optimize energy use in real time, and even participate in demand response, which temporarily reduces electricity consumption and harnesses it on the network. The start-up AutoGrid, in which Total acquired an interest via its venture capital arm Total Energy Ventures, can already do this without negatively impacting an asset's comfort or efficiency. It can also seek out all potential sources of value. BHC Energy leverages AutoGrid technology to take full advantage if its customers' flexible power use or renewable energy production. "We've had to obtain several aggregator approvals from those markets' regulatory authorities since 2016," adds François de Charnacé.
Financing, transitioning to digital, incentives — is energy efficiency strictly a problem in wealthy countries?
Don't bet on it. Two facts run counter to such an assumption. The first is that multinationals will deploy methods proven in Europe, Japan and the United States in their African, Asian or South American affiliates. A sort of technology transfer, whether for business or broader social responsibility reasons.
The second is that developing countries, whose main energy problem right now is access to reliable, affordable sources, could well turn around and do with energy efficiency what they've done in other sectors such as banking and telephones: technological leapfrogging, "which will go hand in hand with the cost drop in digital solutions," predicts Christophe Girardot.
So energy management has a bright future ahead. That's because it's a fairly new sector that is starting to find its place in businesses "by having production units adopt headquarters initiatives and indicators," says Christophe Girardot. Or simply because: "Even with the best of intentions, the most efficient equipment eventually starts to underperform." Implementing ISO 500012 management systems, which ensure that the potential identified and the adaptations made are producing the expected results, is more timely than ever. "For pinpointing areas that can be optimized now and making sure later that the savings have actually been realized and are ongoing, without any slippage in operational or technical performance," explains François de Charnacé. Energy efficiency is getting less corrective and more preventive.
"There are still a few regulations that are up in the air in individual countries. But the train has left the station and won't stop now," says Christophe Girardot in conclusion. It's a more energy-efficient train — and one that's moving fast.
Click here for all the Better Energy articles
1 In the European Union alone, its share is estimated at 24%, behind transportation at 33% and residential and commercial buildings at almost 40%. Source: Planète Energies.
2 The ISO 50001 standard provides guidance to organizations in all sectors on how to implement an energy management system to help them use energy more efficiently.
This page was paid for by TotalEnergies. The editorial staff of CNBC had no role in the creation of this page.