Benefits From Combining Industrial Digital Transformation “Industry 4.0” and Sustainable Energy In The Manufacturing Industry

In a previous article we wrote about the current industrial digital transformation, named the 4th industrial revolution “Industry 4.0” and what it is all about. 

Following the development of industry 4.0, the united nation industrial development organization “UNIDO” issued a report to outline the benefits it brings to the Sustainable Development Goals “SDGs”. The report namely outlined the synergies and benefits from linking the energy transformation with the industrial transformation that is currently taking place “Industry 4.0”. 

Why link The Energy Transformation and Industry 4.0?

The transformation of the energy sector through the deployment of more sustainable energy systems and digital transformation of the industry will substantially alter the way people live, consume, produce and trade. These two major transformations are concurrent and interconnected, but are pursued in different political arenas and with different paces and priorities across the globe.

 The sustainable energy transition and Industry 4.0 share important characteristics:

1- both are highly influenced by technological innovations.

2- dependent on the development of new suitable infrastructures and regulations.

3- and both are potential enablers for new business models.

 These commonalities have not yet translated into substantial policies to foster the transition to more sustainable energy systems and digital production at the same time and in an integrated way (figure A)

The report cited that Industries account for a major share of electricity consumption – amounting in 2014 to 42.5 % worldwide – and energy networks need to accommodate electricity demand from industrial consumers. This could be reason enough to think how the transition towards more sustainable energy systems and the digital transformation of industries could mutually benefit from each other. 

Such an approach could also help to avoid the development of new path dependencies that potentially lead either sector – energy or industry – into a less sustainable, more carbon intensive future. Such integrated approaches could be guided by the SDGs (UN Sustainable Development Goals) which provide important target setting for energy, climate action and beyond. 

Industry 4.0 and The Potential of Energy Saving In The Manufacturing Sector

One of the key characteristics of Industry 4.0 is the digitization of manufacturing processes. This transformation can offer opportunities for energy saving – for example, through the optimization or replacement of specific technologies, the application of new software tools that also offer energy optimization functionality, or adaptations in the business processes.

UNIDO’s report cited two examples how industry 4.0 technological applications can save energy in the manufacturing space:

1-     An example for the optimization of a specific technology can be found in the control of the behavior of many interconnected robots by an algorithm that reduces their energy consumption. By minimizing the acceleration of robots, their energy consumption can be reduced by up to 30 % without increasing the overall production time. Many players from science and industry currently develop such optimization algorithms (such as in the EU-project AREUS7). But innovative digital technologies also offer the chance for the replacement of conventional, often more energy-intensive manufacturing procedures.

2-     A more disruptive approach is to transform a range of business processes. The digitization of the entire value creation network also opens the way to directly connect to the customer and integrate their user experience e. g. in the development of future products or additional services. In that manner, on-demand customized products become technologically feasible, providing the opportunity for eliminating unnecessary functionality (e. g. omit a gearshift for people who only want to cycle through flat terrain). The physical realization of every function requires resources (material for physical or energy for digital solutions), the reduction to customer-requested functionalities will help save resources compared to “all-inclusive” default solutions.

 Transforming or Leapfrogging?

A comprehensive shift in manufacturing, production, energy efficiency,and renewable energy can be captured through two development pathways: transforming and leapfrogging.

 The transformation towards Industry 4.0 will involve retrofitting existing industrialized systems with Industry 4.0 technologies that could provide more sustainable solutions. Standardization, partnerships, and responsible policy design are all ways that lead up to maximizing the economic, social and environmental potentials of Industry 4.0.

On the other hand, leapfrogging will provide developing countries with an opportunity to increase their share of industrialization without repeating the mistakes of traditional development pathways. Regions that are less developed can become candidates for the development of smart factories, decentralized micro- grids, etc.

To support such a development, the challenges and opportunities associated with Industry 4.0 for countries with different stages of industrial development should be explored in more details.

The report has some interesting insights that worth reading for corporate strategists, and policy makers, and other stake holders concerned with the energy efficiency, energy transformation, and sustainable energy use in the era of the 4th industrial revolution.

This article was trying to provide a snapshot summary for the possible benefits from them combining energy transformation in the manufacturing industry and the industrial digital transformation "Industry 4.0", and the full report can be accessed here.