Energy transition and sustainability…
Everything we do is somehow connected with energy
Everything we do requires energy. No wonder that 73% of global emissions are directly linked to our energy system. If we want to reduce emissions, we need to look in particular at the three big energy consumer sectros – industry (24.2%), buildings (17.5%) and transportation (16.2%).
83% of our primary energy consumption is based on coal, oil and gas. This means that substituting fossil fuels with renewables promises the greatest leverage in the fight against greenhouse gases. No matter how you look at it all other measures are less effective than changing the source.
Wind and solar energy the new pacesetters
In the 1990s, solar power was about 5 times more expensive than fossil electricity. Today, the tide has turned. Wind and solar power are cheaper than fossil in most regions. Probably the main reason why we experience a massive scale. What does that mean?
It shows us how energy transition and sustainability go together. As of today, solar and wind power set the pace mainly because of its cost advantage and the entire system will be aligned accordingly. Volatility is the main challenge in the transition to a more sustainable energy system. To manage the ups and down many technologies are pushing into the market. New lead markets are on the rise. We believe that six cornerstones must be integrated at large scale into the new market design.
Energy storage systems dance back and forth with the pace of sun and wind – from the role as consumer to supplier. A large number of technologies are competing here and the competition is far from decided. No problem for digital networking. It’s mainly about the patterns that need to be orchestrated. Which device sits at the end is secondary.
Where do we find the areas of application for storage technologies? Looking at the three main emissions sectors – we find them in all of them. In the industry sector, there are many potential use cases – especially in areas with high energy demand, green hydrogen is an option. But energy management of the next generation that is taking production and energy consumption into consideration is also of interest. In the building sector, the biggest levers are in the decarbonization of heating and air conditioning technology. In the transportation sector, competition for zero-emission engine and new mobility services is in full swing. The energy transition moves industries.
Sustainability – more than substitution of fossil energy
All sectors have one thing in common: intelligently implemented with efficient data management they can be integrated both as buffers for surplus energy and as electricity suppliers. To enable these balancing services, we need to network decentralized energy resources much better. This is one of the focal points of our strategic initiative “Energy transition better and faster”. We are looking at the commercial and core process integration of emerging business models.
And last but not least, sustainability is also about the supply chain. Social responsibility and the carbon footprint must also be taken into account when clean-tec-products are manufactured. Is the product what it promises? We are convinced the 360° view of the product impact becomes an important differentiator when it comes to the sustainable energy transition.
For this reason, we look at the entire value chain of the sustainable energy transition. SAP’s product portfolio ranges from raw material extraction to the operation of decentralized energy resources. Our investigations show already when it comes from linear to circular many SAP investments can be leveraged.
More to come…
Want to explore the references used?
About greenhouse emissions: https://ourworldindata.org/emissions-by-sector
About power production costs: https://www.irena.org/Publications/2022/Mar/World-Energy-Transitions-Outlook-2022
I would like to ask you to provide this too as an guest-blogpost on my private webpage (which will come soon into life)
ps: you have one typo in the text: the "sectors"
Thanks Gerald - happy to share the blog. Just let me know once your site is ready.