Energy dilemma in the way of sustainability

Jose M. RiveraSenior Vice President Strategy

Industry Business

April 25th, 2012

International GreenTec ConferenceHannover, Germany

Energy Dilemma in the way of Sustainability? Energy Management as a significant part of the Solution

2Schneider Electric - Energy Dilemma in the way of Sustainability? -International GreenTec Conference - Hannover Messe, Germany - April 25th, 2012

The Big Dilemma

vsEnergy demandby 2050Electricity by 2030

CO2 emissions to avoid dramatic climate changes by 2050

The facts The need

Source: IEA 2007 vs. 1990 level

We want to help address this challenge

Energy Demand driven by demographic, economic and industrial growth across the world


Fuel

100 units 35 units 33 units

1 unit saved at consumer plug

3 units saved at the energy source

Energy Efficiency as a source of energy

Consumer


The Power of a combined Solution Greater Efficiency, a Smarter Grid, and cleaner generation

Source: World Energy Outlook 2010, OECD / IEA

●Over 50% of CO2 emission abatement will come from end user efficiency

World energy-related CO 2 emissions abatement


Energy trends to address the challenge

Energy Efficiency

as mainstream

The Smart Grid is emerging

The Energy Challenge is

moving to the cities


Energy Efficiencyas mainstream

Energy Efficiency means delivery of equal or increased output from equal or reduced energy input


Energy Efficiency regulations and standards are popping up everywhere

US• Federal commercial building codes updated and new codes adopted in 34 states• Federal tax deductions (e.g. USD1.8 per sq. ft if certain measures are applied)• New York example: all energy efficiency retrofits with payback < 5 years need to be

introduced• Net-zero buildings by 2050

EUROPE• Energy certification mandatory for new, rented and sold buildings • Mandatory standards for buildings energy performance• Building codes adjusted in member states – new const ruction and renovations

need to meet energy efficiency standards (funding p rograms >EUR 9 bn for promotion of energy efficiency established)

CHINA• Clear energy efficiency targets (20%) in the nation’s 5-year plan• Strong government focus on highly-consuming industries such as power, metals

& mining, oil & gas, construction• Building codes and regulations for implementation detail mandatory efficiency

improvements to building envelopes, lighting and HVAC systems

Key factors driving change: Regulations


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Source: IEA 2009

Payback time has been reduced30% over the past 5 years

due to the increase in energy cost

Years

Additional factor driving change: Impact of increased cost of energy on financials

Harder to measure but equally important: Weight of “Sustainability” on

corporate / brand image


Our answer: Delivering Energy ManagementBuildings, homes and industrial facilities represent aprox. 65% of Europe’s energy consumptionEnergy Efficiency - related savings go from 10 to 70% on their energy bills


What does Energy Management look like: Energy renovation of 150 municipal buildings

●Largest building energy saving project in Denmark

●Creating a better climate and environment• Upgrading the ventilation, heating, lighting and insulation

systems for 150 buildings

• Benefiting employees and citizens who use the schools, institutions and libraries

●Guaranteed level of saving • Operating costs reduced by 14%

• CO2 emissions reduced by 14% - 16%

●Schneider Electric worked with a financial institution and the Government paid for the project with the energy savings

• No negative impact on government budgets

Høje-Taastrup


The Smart Gridis emerging


The new Grid Equation

Growing electricity demand

Need to reduce CO2 emissions Active government & regulators

Active end-users

Technology availability

Constraints on existing networks

drivers accelerators

making the smart grid happen


Transmission Distribution

Industry

Buildings

Data Centres

Infrastructure

Residential

Bringing together many players Traditional and New - Need for strong collaboration

TraditionalEnergy

producer

Energyproducer

DistributedEnergy

producer

DistributionNetwork Operator

TransmissionSystem Operator

EnergySupplier

Energy traders and

aggregators

ActiveEnd-users

Governments & Regulators

Technology providers: traditional players (Energy Efficiency solution and utility providers),communications/networking/data mgmt suppliers, IT enterprise integrators, niche players


A collaborative business model is needed to make the Smart Grid a reality

Smart investments

Over 1 trillion € = Europe’s estimated investment needs in

energy between 2010 and 2020

Smart savings

-Energy efficiency saves up to 30% off the energy bill of a building or an industrial site, and up to 70%

off a new build with solutions widely available today

- Payback time has decreased 30% over 5 years due to increase

in energy prices

- Demand Response can shave 10% off the peak

- Grid’s operational efficiency : flexible distribution & smart meters

Regulatoryframework

- Clear and stable framework: on

electricity prices, CO2 trading mechanisms, EE

targets in buildings, Demand Response etc.

- Support for pilot projects

-Incentives for industrial and private customers

- Education for citizens

The Energy challenge is moving to the cities


World population

Earth’s surface

Global energy consumption

Global CO 2emissions

World population

Years todouble the urban capacitydeveloped over the past 4000 years

The Energy challenge and the cities

The battle will be won or lost in the cities

Cities today… …and by 2050


As cities grow, so do their challenges

Cities need to solve these challenges to make the difference!

Growing pressure on infrastructure

Rising consumption

Increasing demand for mobility

Tighter economic pressure

Fiercer global competition

More ambitious environmental goals


Cities need to become Smarter

●Smart• Empowers city operators, enabling

“Situation Awareness” and coordination between agencies

●Efficient• Enables optimum infrastructure usage

while reducing CO2 emissions and energy consumption

● Liveable• Provides new capabilities to city

managers for high-quality services to citizens

scalable, collaborative, customised

Smart

Energy

Smart

Mobility

Smart

Water

Smart

Public

Services

Smart

Buildings

& Homes

Smart

Connections

Smart

Collaboration

Holistic city managementensuring sustainable use of resources & infrastruct ure


IndustryIncludes ICT, energy,transportation, and infrastructure vendors& service providers

Developers, Planners & Property Managers

Includes real estate developers, urban planners, & property

managers

City & National Governments

Includes National, State as well as local city officials

UtilitiesIncludes city and private

electric, water, & gas utilities

Private InvestorsIncludes international development banks and private organizations

Citizens & NGO’sIncludes all local city residents, including individuals, businesses, and NGOs

These challenges involve many stakeholders in a long-term collaborative model


Smart Grid

Smart Water

Smart Mobility

Smart Buildings & Homes

Smart Public Services

Smart Cities

5 areas of solutions expertise

Customized to the individualneeds of the city

Integrated for performance

Collaborative model

We deliver efficient and sustainable urban infrastructures through collaboration


Some Success Stories worldwide

Mumbai, IndiaA traffic management system provided on average 12% time savings to drivers in one of the most congested cities in the world

Dallas, USAOur water management solutions help Dallas minimize leaks and ensure efficient operations, resulting in cost savings

Malaga, SpainThe Smart Street Lighting component of Malaga’s Smart City reduces the city’s lighting costs and emissions by over 30%

Baltimore, USAOur system provides real-time traffic, transit, and flight information to residents, enabling better travel decision-making

Cuenca, SpainAn online geography-based portal enables the city government to keep residents updated on city planning, construction, and events

New York, USAMobile applications provide residents with travel information and weather conditions on-the-go

Madrid, SpainAn integrated operations center manages all traffic and critical infrastructure, solving mobility problems with a holistic approach

SingaporeOur smart grid solutions help Singapore’s utility identify and quickly respond to electric outages

Seville, SpainA shared city communications network and data exchange platform helps coordinate efficient emergency response

EfficiencySustainability Liveability


How to become a sustainable enterprise?in the public and private sectors

●Make your facilities and environment efficient• Measure energy consumption• Fix targets for Efficiency improvement

• Use energy saving products & systems

• Use automation to make your facilities smart

●Connect your smart facilities to the smart grid

● Integrate renewable energies

● Innovate for tomorrow• Push technical and engineering innovation

• Build an eco-system of complementary players

• Experiment, learn and scale up at a national, local and site level

●Support the growth of skills and knowledge in Energy Efficiency


We Walk the Talk:Schneider Electric’s headquarters

÷4Final energy consumption vs. previous sites in the area

80 kwh/m²/ anFinal energy consumptionROI in 5 to 7 years

CertifiedISO14001HQE ExploitationNF EN16001ISO 50001: first certified building in the world!

A smart building● Equipped with Schneider Electric solutions● Electric Vehicles charging station with PV

solar panel roof,● Connected to the building vs to the grid


Being sustainable also means...Providing access to reliable, affordable and clean energy

Providing the school and the whole village of the Asore in Nigeria with solar power generation and lighting solutions.

Because villages are where cities begin.

Mhouseholds getting access to energy

entrepreneurs supported through our sustainable investment fund

people trained in energy management trades

BipBopprogramme


● The world faces an unprecedented challenge

● The battle will be won or lost in the cities

● Digital intelligence is creating smarter networks: electricity, mobility, water, buildings that are becoming more integrated, connected, and sustainable

● From Energy Efficiency to the Smart Grid and to Smart Cities, everything is connected

● What we need is a collaborative, ambitious business model to match this connectivity

The Energy Dilemma provides the opportunity to be more sustainable – the time is NOW!

In Conclusion


Make the most of your energy™