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Energy’s future is green

Author : John Kitchingman, Dassault Systèmes

05 November 2021

The UK president for COP26 has announced that this year’s conference will focus on the energy transition and clean vehicles, which will put British energy companies in the spotlight.

John Kitchingman, Managing Director
John Kitchingman, Managing Director

Post pandemic, the industry is up against its biggest issue ever: reducing its reliance on fossil fuels to meet the government’s targets for net zero by 2050.  To reach this, the industry will need more than increasing clean and green energy products they offer. Global leaders will also need to rethink their business plans to support every aspect of consumers’ lives – from the modes of transport they use to the way they heat and cool their homes, and even the products they buy. 

Pressure is mounting from all sides, and the industry needs to make strategic decisions that will impact its future quickly: consumers are becoming savvier, government regulations are changing, and global temperatures are rising. All combined, this forces the energy sector to put sustainability top of its strategic agenda – and to do so, it needs the right tools, skills and partnerships in place to ensure it will continue to operate efficiently.

The energy sector is struggling

A growing global population with more people using electricity and fuel should mean that energy companies have a larger pool of customers than ever before, but this is far from the truth. A recent Dassault Systemes survey found that 70% of consumers demand sustainable alternatives to traditional energy products. This demand has now become so critical two in three energy business leaders admit that failure to do so will drive customers to competitors. 

However, consumer pressure is only the tip of the iceberg: energy leaders also need to comply with government mandates for net zero emissions. While these targets were already ambitious pre-COVID, they have become extremely challenging to navigate for the industry, so much so that 75% of energy companies have had difficulty predicting and planning for government decisions. 

As a result, the industry prioritised resilience over innovation, with 76% of businesses having to postpone the implementation of their sustainability goals. For a third of companies, this challenge was due to a lack of agile processes or digital transformation tools to be able to pivot during the pandemic. With such a high number, it is no surprise that there has been a slow move to meet net zero targets.

However, the pandemic has provided businesses with a great opportunity to double down on sustainability. 79% of energy leaders now see sustainable product innovation as a strategic priority; 64% also acknowledge that becoming net zero is a priority for their organisation.  So, if COVID-19 has allowed leaders to recognise the importance of the net zero strategy, why are companies still taking a lukewarm approach to their energy mix, and how can they be supported to reduce their reliance on fossil fuels? The challenge is complexity. The answer: virtual twin technology. 

Making the move to virtual twins

Dassault Systemes’s research also found that 70% of business leaders believe that virtual twin technology will be crucial to achieving net zero goals, so it’s clear that the sector should consider this technology for rapid innovation and to support mapping out a more sustainable future. 

A virtual or digital twin is essentially creating a fully functional digital replica of an asset, including its physical structure, its behaviour and associated processes. With a virtual model, you can analyse and optimise different scenarios using real time or experimental data. For example, you can create a virtual twin of an energy site to track its waste and carbon emissions, allowing for more effective management of the site. 

Virtual twins are already used in the conception of solutions to harness the power of renewables, such as wind turbines, solutions to turn water into energy, to produce mobile electrical chargers and in the manufacture of solar panels. Highly versatile, the virtual twin approach is also used to improve the safety of operations in extraction sites, from drilling into caves to extracting fossil fuel, routing nuclear power and managing waste; and even mapping out models of physical sites before construction. These are all steps in the right direction for an industry which has yet to adopt agile ways of working across all its operations. 

The impact on talent 

With increasing regulations and changing consumer behaviours, this shift towards digitalisation is necessary and cannot be ignored for a greener post-COVID future. Beyond improving ways of working and allowing businesses to design more sustainable products, digitisation of operations also provides a new avenue to upskill workers and attract more environmentally minded talent to the sector. 

In effect, mass adoption of virtual twins creates a virtuous cycle whereby companies can attract talent who can help them devise and implement efficient carbon reduction strategies – a current challenge for seven in 10 business leaders. Using platforms that can support the company’s entire operations simplifies information sharing, ensuring that best practice is shared across the workforce to enable staff to tackle future carbon reduction projects to meet evolving consumer demand or government mandates.   

To deliver on the government’s mandates for net zero, energy companies must act now to guarantee their future success, global economic growth and keep global temperatures from rising further.

What does the future hold? 

While the pandemic shone a light on the current challenges within the sector, increased scrutiny in the wake of COP26 showed that action has to be taken immediately. It is paramount for the industry to start implementing the right strategy to reduce its carbon footprint and do so quickly. To generate the best results, new strategies should come hand in hand with delivering the type of products that customers need and upskill current staff to be ready to take on new roles, all the while meeting governments’ stringent mandates for net zero emissions.

Having the right strategy and business operation models are crucial but this also needs to be coupled with the right technology to underpin and support these initiatives. Virtual twins are one answer to this. By driving sustainability and the circular economy at speed and scale, they help companies reduce their costs, resource use and carbon footprint whilst supporting innovation and customer-centric business models.

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