Q&A: AVEVA - How Digital Innovation Can Accelerate Decarbonization Strategies Worldwide
In this exclusive interview, we explore how digital solutions can minimize CO2 emissions of existing industrial infrastructure while delivering measurable cost savings that can be reinvested in clean technologies.
At the recently concluded COP28, AVEVA, a global leader in driving digital transformation and sustainability, demonstrated how leveraging data can accelerate the path towards a sustainable future.
On the sidelines of the event, SME News interviewed Harpreet Gulati, SVP - Head of PI System Business at AVEVA to ascertain how digital solutions are crucial in minimizing CO2 emissions of existing industrial infrastructure while maximizing efficiency.
SME: How was COP28 for you? And what were the key messages AVEVA highlighted at the event?
HG: First of all, I would say COP28 was the biggest COP in the history of all the COPs and it was a fantastic opportunity to learn how complex sustainability is, and how multifaceted it is.
That really drove home for me the message saying, look, we've been focusing on energy and industries and decarbonization, but there are many other aspects of sustainability as there's the whole social and governance aspect that needs to be considered – as well as just how complex the supply chain is!
So, in order to have a look at sustainability, as a complete picture, we have to look at communities and organizations in a much broader sense than what we think.
Digitalization is a critical requirement for sustainability, that's the platform - as you connect all communities, value chains, just the sheer complexity of everything that we're talking about. How are we going to tackle all these problems simultaneously? We can't do that in silos.
We're going to have to do that by the sharing of information, by coming together and analyzing all different combinations. And so, it reiterated for AVEVA overall, the requirements and the mandate for digitalization to lead the way for sustainability.
SME: Speak to us about your panel on the hydrogen transition summit. What is the significance of green hydrogen in achieving the net zero goals?
HG: There are many paths to net zero, but I would say, we cannot do away with hydrogen. Clean hydrogen is going to be critical. Green hydrogen has the potential to expand to about US$11 trillion, globally by 2050. There are a lot of challenges though.
Today, hydrogen is not commercially viable from various perspectives. So, we need to be able to produce hydrogen at a much lower cost, from a transportation, distribution, and regulatory point of view. That was a source of discussion at the hydrogen panel where so many experts who came at it from different angles, looked at different hydrogen pathways.
Using hydrogen directly or by converting it into ammonia and other possibilities were discussed at the panel. Somebody would say hydrogen is a simple thing - we electrolyze water to get it. But there are many complexities along the full value chain from producing it at a reasonable cost to storing it and transporting it. How to ensure safety with hydrogen as a fuel is another point to be considered.
If hydrogen is going to be a key component for achieving net-zero by 2030, we can't really wait and analyze by building sample plants, and say ‘Oh, this didn't work’. We need to do this digitally. We need to look at options, cost, bottlenecks and how we are going to address these problems, fast as well. And digitalization is the only way to do that.
SME: What timeline would you set for hydrogen being considered as popular as an option, as we see electric vehicles today?
HG: Hydrogen is happening already, right? There are many countries that are looking at many options already. I would say what people are looking at is putting in the infrastructure for distribution and charging, to make hydrogen feasible.
Assuming all of these, by the next three to five years, hydrogen will become an available and viable alternative. Today it's a very small part of the overall energy mix, but it needs to come up as a perceptible portion. And by certainly by 2030, it's hoped that hydrogen will be a significant portion of the mix.
SME: And will it be an economically viable option for the consumers?
HG: Yes, I think that's a must to me, and that's always a requirement, right? Sustainability is not just license to operate, it's a license to grow. That's when it's viable, just like electric vehicles now. Electric is the way to go now, and I’m sure hydrogen will take off as well.
SME: What strategies do you recommend for business leaders and organizations to address the climate crisis and work towards building a greener and cleaner future?
HG: If you can break down sustainability to a couple of components, the first thing I would say is to look at digitalization to just understand your footprint. You validate, track and measure your operational efficiency, the baseline, etcetera. That's the first step. Understand where your sustainability footprint is coming from.
The second step is to start taking action towards which are the highest sources, where can we drive operational efficiencies, where are the biggest leaks in some ways, and what strategies can we adopt to address those. And then the third step is to actually deal with the issues for the future. I would say, most of your Scope 1 and Scope 2 emissions will be covered here.
The next step is addressing the bigger challenge, which is the Scope 3 emissions. That's where you have to look at the upstream operations of your value chain as well as the downstream operations of consumers who are using your product. And you have to figure out how we do this. That's where collaboration across the value chain needs to come in.
I'd say, digitalize every single thing that you have. Look at operational efficiencies that can reduce your overall emissions by almost 20% to 30%. People are also looking at how to enable circularity. Looking at digitalization, operational efficiencies, collaboration across the full value chain and circularity, will be the way to go.
SME: How can industrial organizations leverage data to reduce carbon emissions?
HG: We have hundreds of case studies across pretty much all of the sectors. So, just to put it in perspective, the industrial sector accounts for about 25% of the overall emissions. That's a significant portion of the overall mix. Very easily, we are looking at about 20 to 30% reduction in emissions.
We need to learn from the industry, and learn from the players that are ahead. Within our own sectors, there are lots of case studies that can help. The second step would be to look at alternatives. Redesign process, check viabilities, do electrification, use steam or natural gas for heating.
The third step would be to actually look at the entire process from all perspectives. For Scope 3, you will need to look at everything - beginning with raw materials and how they are sourced. And fourth would be to look at downstream operations of your value chain, saying, how can I achieve circularity?
SME: AVEVA released a sustainability progress report a few months ago. Please provide us with a few insights into AVEVA's overall ESG mission and progress being made. What can we expect in 2024?
HG: At AVEVA, we look at sustainability in two components. One is our footprint, and how we need to reduce our footprint. That's what our sustainability report talks about. What I've spoken to you about so far is how we do the handprint, our technology handprint, and how do we reduce that.
Moving on back to our footprint, we have been on this journey for the last three to four years and so we were one of the first 50 companies in the UK, or the world, which actually committed to net zero. We were one of the few early movers in this area. We set our targets early and are now ahead of our targets. We have reduced our Scope 1 and Scope 2 emissions by over 95%. We are looking at our Scope 3 emissions as well, and how do we work with our partners across the value chain in reducing our Scope 3 emissions.
Most of the cloud providers in general use more sustainable electricity, green electricity, so cloud is a big part of our strategy going forward.
We look at best practices for designing software that are optimal in energy usage and in data usage. So, really, we've been very committed to this area for a while and we continue to make progress in each of these areas in the next few years.
SME: How would you rate the industry's commitment to the sustainability mission, on a scale of 10?
HG: I would say at COP, I was very encouraged to see how committed industry leaders were. They were genuinely looking out there for a viable option. As I said, I think people need to move from sustainability in the kind of license to operate to a license to grow.
Everybody wants that and is trying to do that in a cost-competitive environment. And if you remember the energy trilemma, sustainable energy transition has to have a whole component. It has to have the energy security, the energy availability and sustainability as well as the affordability portion.
All three of those have to really be put into the picture. You must have enough renewable energy, and it has to be safe and has to be at a reasonable cost.
I would say industry-wise, people are looking for options. But I think it's how fast can we move. It's hard for me to give a rating for the industry, other than the fact that I see there is a broad level of commitment and everybody is really working towards creating these pathways, viable and just pathways that we can get there.
SME: And the vibe was positive?
HG: The vibe was 100%, absolutely, very, very positive. And you can see that at the end, COP28 came out with a significant milestone – they were able to append an agreement where all the countries have agreed to face down. And that, to me, is a significant agreement and significant milestone that we were able to achieve in this COP.