As the year 2022 comes to an end
Unprecedented is a word that is often over-used to describe events, but I think it’s fair to say it is a word which accurately describes 2022.
?News headlines the world over have highlighted many of these unprecedented situations - deciphering the impact of the pandemic on how we work, live, learn and connect in the short and longer term, the devastating war on Ukraine, extreme weather events including drought in all regions across the globe, record heats and heatwaves as well as widespread forest fires. Then there is rising inflation, global raw material and supply chain issues, labour market shortages and geopolitical uncertainties.
?There is no doubt that individually, but certainly collectively, these events have had a profound and unprecedented effect on society, industry and the planet from an environmental, social and economic point of view.
?Further, following decades of discussion and debate between governments, scientists and industry among others, the impact of human induced climate change has never been clearer and closer to home than we have seen this year. This has increased the spotlight on the climate urgency and the need for action now, not in another decade, in particular to a lower carbon future and preservation of resources to ensure the sustainability of the planet and society.?
Our global population passed the 8 billion milestone in November and this will continue to push the global mega trends of urbanization, expectations for better comfort in our daily lives, connectivity and digitalization – all of which will further influence the world’s accelerating appetite for energy, and electricity specifically.?
This has clearly been a year of significant change and with all these elements combined and converging, it has also challenged the status quo when it comes to electrification, and how we generate, manage and consume our energy. Whilst this poses a challenge, it also presents some significant opportunities for positive change.
?The responses to these events, from governments, businesses and consumers, have been varied. Energy policy in many countries is changing and nuclear is back on the agenda. Global government spending and investment to support the transition to clean energy has increased by over $500bn since March as global energy challenges spur new policies aimed at cutting reliance on fossil fuels and increasing energy independence. ?Industries have indicated a strong desire and commitment to invest in energy efficiency measures in support of cost savings and sustainability consciousness. And consumers are increasingly looking at how to make savings in the face of rising costs of living. One trend that is a red thread throughout, is that energy users are changing their relationship with electricity and focussing on a ‘less is more’ concept. We can all be more conscious about not wasting energy and be more efficient with the energy that is currently produced, for the benefit of a more sustainable future, and our wallets.
?Energy efficiency and the energy transition have a significant role to play and have become more of a priority this year. Energy efficiency is the best way for industry and consumers to cut costs and reduce emissions right now. It also has the added benefit of reducing stress on the power grid, which is a global challenge as the world continues to go electric. According to recent stats from the ? International Energy Agency (IEA), global investments in energy efficiency – such as building renovations, public transport and electric car infrastructure – rose 16% in 2022 compared to 2021, reaching $560bn. This is a significant indicator of changing times.
?As market conditions look set to remain challenging in 2023, businesses will not be asking whether they can afford to put in place energy saving measures, but whether they can afford not to! From a business perspective, the case for energy efficiency is more relevant and applicable than ever as in some cases the return of investment and payback can be as much as three times faster than before (in some regions of the world), due to the current circumstances with energy supply and costs.
?As we know, industry is the world’s largest consumer of electricity, natural gas and coal, according to the most recent data from our colleagues at the IEA, accounting for 42% of total electricity demand. For this reason alone, industry has a significant responsibility to take action to reduce carbon emissions and also conserve energy for the good of the planet, society and future generations.
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?We also know from previous research however, that many companies are not sure about what they could or should do to improve their energy efficiency. For this reason, ABB’s Energy Efficiency Movement - a growing global forum of more than 200 organizations sharing ideas, best practices and commitments to create a more energy-efficient world - recently launched the Industrial Energy Efficiency playbook that lists 10 actions that a business can take right now to reduce costs and carbon emissions. It is designed as a practical toolkit to help industry make rapid progress, by using technologies which are already widely available.
?All businesses are different and there is no ’one size fits all’, so the beauty of the ’10 actions’ is that they do not have to all be undertaken, or in a priority or sequential order. They can be standalone or integrated depending on what any one company needs or can afford. However starting with an energy audit is advisable, as then a company can fully understand and assess its energy usage and make better decisions for where they may be able to make the biggest impacts for the most economical investment.
The second significant step we’ve also seen this year is in the energy transition, from fossil fuels to renewable energy generation. This is possibly the biggest energy challenge we have. The transition to energy generation from renewables is happening, but it needs to happen much faster. As renewables are by their nature less consistent in supply than fossil fuels, there is the additional challenge of developing technologies for harnessing energy storage and ensuring grid security and reliability, particularly at peak times. This also supports the case and need for energy efficiency.
When you have an energy situation like there is in Europe currently, or global disasters or occurrences such as the unprecedented floods, forest fires and heat waves of this year alone, people’s focus changes. Human nature is sometimes to not act as quickly as we should about situations we are aware of. But often when the brain, heart and wallet are connected, this is when you see people taking action – when things really start to affect them directly.
?From talking to our distributors and customers, one impact on renewables is that they are seeing their solar businesses booming in the home market. I believe we will see an increase in microgrids based on renewables to support the energy challenge as businesses and communities start to look at ways to produce their own energy. So investment in renewables, from industry and private consumers, will increase – and with the current rising energy costs, this makes the investment in renewables a sensible business driver and also the payback will be shorter.
?Our role is more critical and relevant than ever as the world goes electric and sustainability tops the global agenda. The time to act is now. We have the expertise and technical solutions to support our customers and partners transform ambitions into actions.
The world today is in a defining moment generally, I think. If this year has highlighted anything it’s that innovation, technology and collaboration are key to finding solutions for the global challenges and opportunities we face – the power of together in action.
?Although this year has been an unprecedented year with so many different catalysts of change converging together, I do wonder whether 2022 is actually the year we will look back on as THE point in time, the turning point, for a new era of collaboration, and a global movement between governments, industry and consumers for a more sustainable future – as it’s not a question of ‘if’ we can do it, but how fast can we do it, together.