Advent of Modularity in Energy Management and the Move from Reactive to Predictive Model

Industry Outlook Team

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Sanjay Sudhakaran, Vice President - Digital Energy, Schneider Electric India, in an interaction with Sudhakar Singh, Editor, Industry Outlook, shares his views on the changing approach towards energy management, the challenges involved and how to address them.

How do you see the current market of industrial energy management? What are the major factors driving its growth?

Urbanization is driving the building infrastructure growth and buildings are transforming more and more into modern infrastructures. They are focusing not just on sustainability in terms of energy usage, but also on the well-being of occupants within the premises. On the other side, there is a huge push by the Government of India to revitalize our manufacturing sector, because manufacturing sector is the largest employment provider and can fuel growth over a long time.

I think we are currently over reliant on services, and manufacturing has not performed that well, in the last decade, as it should have. It is important for manufacturing to be potent in India for the country to be able to provide employment for the population in the long run. I think the government is working hard to incentivize that. With trade barriers in terms of imports, and incentives for local manufacturing, it is clearly driving the demand. But in the end, it is very important for us to be competitive in the global market, because that is the biggest incentive we can have.

In India, we have talent; we have engineering talent, we have manufacturing talent, but at the end of the day, we need to be competent. And to be competitive, what is important is sustainability in two senses – in terms of reduced operation costs or energy costs, which is good for the business as well as for the environment; and on the other side, more reliability in terms of uptime, contact-less maintenance, and lesser operating costs on that front.

If you look at it from a technology standpoint, what are the major challenges faced by the manufacturing industry? And how, how can those challenges be addressed?

I think, digital is a technological advancement that is moving at a fast pace, and will continue to move so even at an accelerated pace. We are expected to have almost 5 billion connected devices very soon. So, IoT and software are very clear technological advancements that are sure to benefit the industry. However, what the industry is actually struggling with is modularity. There are people who come up with a massive outlay, offering to digitize your processes end to end and putting up a three year CapEx plan saying that by the time you are finished with it, you will get the desired results. Now, the question which is in the minds of the people operating the plants is that how good is that ROI?

So, the apprehension is both on the process side, as well as on the energy management side.
What the clients are actually looking for is modularity, in terms of investments; realizing the return on investments, and then re-investing, to achieve sustainability which has become must to do because boards are pushing their companies to be more and more sustainable. Ultimately, sustainability is going to be engraved as one of the top most agendas of all the CEOs globally. There is a clear intent that we must do it. You need to be able to get the ROI from the investments that you are doing to facilitate better and more efficient plants, and better maintenance.

We are trying to enable it through our eco-structure platform, which is interoperable with open architecture. What we are saying is that you can go about doing it in bits and pieces, and in the end, you will be able to integrate all the things. The top most benefit that the customer gets working with us on our solutions is modularity.

50 per cent of energy used in buildings is wasted because of inefficient building management systems. How is automation proving to be useful in addressing this issue?

Building automation has existed for the past 20 years in some form or the other. What's changing today is that the industry is trying to move from a reactive model to a predictive model. What we are promoting is not maintenance site by site, but maintenance through a unified command center. A unified command center collects data from a cluster of buildings, analyzes the data for you, and comes back to you with what you need to do, and what actions you need to take to either make your building more efficient, or to improve the well-being of the occupants inside the building.

For example, you could have a scenario where the predictive maintenance throws up the fact that a particular AHU (Air Handling Unit) is currently about to malfunction in the next one month. So, instead of dispatching a technician today, you could schedule it with your preventive maintenance that gives the maintenance guy better productivity, because he doesn't have to send the technician two times. It reduces the downtime that the customers have to face because they do not have to wait for the AHU to fail and complain to get a technician dispatched or wait for a spare part. Usually you're getting it done in the first time, or you're getting it fixed before it fails. And you're planning for inventory of parts and experiencing zero downtime. These are some of the advancements in building management technologies which the customers will benefit from.

Industrial IoT has emerged as a boon for this segment but the ROI again becomes a concern. How can this challenge be addressed? How can it be ensured that the strategy meets the business objective of reduced operational cost?

This is something that we are offering as a service and not as a product because we cannot just deliver the products and say goodbye and expect the customer to get the ROI because there is a typical hand holding period. So, we have a particular services business within our group, which is the energy sustainability services group. They are trained people in energy management. So, for process industry or an automobile industry, first we identify all the energy consuming equipment that is there inside the factory or the premises. We do a complete audit and create a baseline.

After creating the baseline, what we do is that we propose a certain investment to the customer in a graded fashion. Another aspect is that it is not just the energy efficiency, but quality of power is also very important. We are using more and more modern electrical equipment, which create harmonics within the system, which are very dangerous for the equipment. So, we do a complete harmonic study of the factory and an energy study of the factory, and come up with a plan. We try to give a proposal, which is around 18 months of ROI, and that too split up more in a modular fashion. So, the customer invests a certain amount of money, he gets a payback for that and he reinvests that money and gets another set of payback for that. Thus, his confidence in the system grows. Moreover, all these are interoperable systems. So, you can stitch them all together in the end, and have a complete eco structure solution for the plant.

Going forward, how do you see the energy management market evolving in the near future? And how is Schneider Electric gearing up to solve the new challenges?

We clearly see a huge potential because the customers that have adopted our technologies keep coming back for more. We are very confident of the government of India's initiatives to promote sustainability. And we are very positive and bullish about corporate India leapfrogging through this initiative, and rebuilding one of the most efficient and sustainable factories of the world.

However, what we need to do is to be able to communicate this to customers. How do we standardize these architectures? How do we train up more and more partners in the field to be able to address India's geographical spread? And how do we ensure that we provide seamless services to the customers, so that we do not lose contact with the customers after the initial work is done? These are some of the things that we are working on - building infrastructure around training, building infrastructure around what we call as Eco Experts, who are Schneider’s authorized partners who work and deploy eco structure solutions, exactly the same way in which your company will do it directly. So, these are exclusive partners who work with us and who are trained by us. They have full access to our software and solutions and are able to deploy the solutions in every part of the country. This is the journey that we are traversing, having more and more partners and training them.