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Let's face it – the world needs to overcome a big challenge with regards to energy: After all, the energy consumption of cities and industries is ever-growing. According to World Bank data from 2019, the proportion of the global population that resides outside of cities and towns has fallen by two-thirds compared to the start of the 1960s. At the same time, academic studies have noted that urban areas account for about three-quarters of global energy use, something that will undoubtedly cause a problem for ongoing sustainability efforts.

Even with more and more green energy sources coming online with every passing month, there is still an extensive challenge to lower carbon dioxide levels in the atmosphere and for the nations of the world to meet their Paris Accord climate change commitments. Many businesses have committed themselves to lowering their carbon footprints to meet regulations and cover new customer demands. Siemens, for instance, was actually the first DAX company to commit on carbon neutrality by 2030 and reduced emissions already by 54% since the start of the program. Consumers increasingly turn to companies that focus on sustainable energy generation and consumption and realize that a profitable future is only possible in a sustainable world. Either way, I already see a world in which decarbonization is considered to be of huge importance in the urban realm. However, many companies still lack a holistic approach to decarbonize their energy systems.

In this article, I will emphasize the relevance of decarbonization for the energy sector and the related energy-intensive industries as well as for sustainable urbanity. Then let me show why digital twins should have a part to play in any decarbonization roadmap. Finally, I will share six identified principal success factors on how to apply digital twins to decarbonize energy systems.

Sustainable energy use is at the heart of the fight against climate change, as energy generation is responsible for a huge amount of carbon dioxide (CO₂) and other greenhouse gases that get emitted into the atmosphere each year. Only for the purpose of illustration, according to the Energy Information Administration (EIA), electrical generation accounted for some 4.13 trillion kilowatt-hours (kWh) of energy in 2019 in the United States alone. The EIA estimates that some 1.72 billion metric tons of CO₂ was released into the atmosphere as a result of all energy sources. To put it simply, that's approximately 0.92 pounds of CO₂ emissions per kWh!

Numerous decarbonization trends, such as the switch to biofuels from fossil-derived ones, already try to tackle that problem today. Others include the increasing use of wind energy, both on and off-shore, as well as the development of hydrogen-based fuel cells, or the roll-out of carbon capture and storage (CCS) technologies. These truly are groundbreaking times for decarbonization!

Nevertheless, significant quantities of greenhouse gases are still being produced every day due to “business as usual” operation of energy systems in business, housing and smart life, not to mention the mobility and transportation sectors in cities. The good news is we can keep a cap on these emissions. With the fundamental optimization of the entire energy system to known decarbonization solutions, the world will come closer to the goal of meeting its climate agreements and lower cost pressures to bear on climate goals. This is especially the case with energy systems that offer huge potentials for CO₂ reductions. Energy systems are basically interconnected networks that deliver energy to end users – both industry and consumers – on an on-demand basis. Sometimes demand may be high and sometimes it may be low, that’s just natural. Any energy system must account for this and be run in an optimized way so that over-generation of electrical energy is minimized or even avoided. In this regard, digital twins represent a powerful ally in modern decarbonization technology today bringing together two major goals for businesses: sustainability and cost effectiveness.

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There are several technologies that already exist which contribute to the reduction of CO₂ – and other greenhouses gases – from being released into the earth's atmosphere. Among these technologies, digital twins can be a way to bring all technologies together and model energy flows and changes of parameters in real time. Simply put, a digital twin is a virtual version of something that usually resides in the physical realm and is used to mimic real systems or products in industrial environments. It was once used to help designers and engineers with new product concepts but, strengthened by the Internet of Things (IoT) and Artificial Intelligence (AI) systems, it has proven itself to be an even more valuable tool. This is because it can model a raft of interconnected systems through big data analytics.

In general, one can now model energy systems and infrastructures within smart districts and utilities – and even across entire national networks, if up-scaled – by creating digital twins of the as-installed or as-planned grids. The basic idea is that digital twins help with the decarbonization of energy systems by mapping all of its aspects – from electrical production to distribution losses and localized demand – in the digital realm. It is already proving itself to be particularly effective in energy management as well as district heating, electrically powered public transport infrastructure management, and sector coupling, to name just a few areas. Therefore, it is important to know which factors in the deployment of digital twins will lead to the most successful outcomes. I identified the top six success factors to successfully decarbonize energy systems using digital twins.

1 - Don’t start without a decarbonization strategy in place

To begin with, any successful decarbonization program must commence with clear goal-setting. The modeling used in the digital twin of the effective electrical system should offer a clear decarbonization roadmap with carefully thought-through criteria about the intended outcomes. First and foremost, the monetization of the current versus the targeted carbon footprint comes into play.  Also, current and future business models focusing on either private or public goods or services will get conceptually challenged based on their inherent carbon intensity. Subsequently, the question of the future energy mix along the entire value chain of production or servicing has to fully include all suppliers and business partners – and this can even raise new questions related to the own location strategy. Finally, sustainability reporting should not be underestimated, as it even exposes management to personal liability.

2 - Always consider the whole system!

Secondly, you always need to consider the entire energy system when starting your journey and how to best optimize it for favorable outcomes. It regularly includes electricity, but also heating & cooling and transportation for a thorough end-to-end analysis of the initial situation and therefore the entire technological framework conditions. To name only a few, each site or entity calls for a multidimensional consideration of e.g., technical lifetime, maximum capacity, minimum versus maximum operating and down time, investment and maintenance cost, and of course its energy demand and relative efficiency. In other words, this attention to detail and completeness is needed to unlock the full decarbonization potential.

3 - A technology-neutral approach is vital

Having a technology-neutral approach to the decarbonization of energy related systems in place means that you should have no preconceptions about which model or configuration will work when adopting digital twin technologies. You need to start the journey with an open mind. A technology-neutral approach allows to draw flexibly from a variety of existing ideas and possible technology solutions. In short, predetermined technological pathways tend to end up with sub-optimal outcomes. Never commit too early to a single technological approach when examining all of the conceivable approaches to decarbonization because your digital modeling and AI number-crunching may surprise you!

4 - Data is the new gold

Preparing your dataset before you build your digital model(s) is something I have learned first-hand to be crucial to the entire process. In short, this means gathering, cleaning and structuring the data, but it will also require that the plausibility of the required data in real-world settings is checked. If you put garbage data into your digital twin model, then expect low-quality outputs. All too often, we have experienced these challenges when analyzing for example meteorological data being crucial for renewable solutions next to data sets about electrical consumption in buildings or feed-in profiles from photovoltaic, solar thermal, concentrated solar, wind, and hydro power plants at locations worldwide. In general, some patience paired with professional experience is needed to find, prepare and make the best use out of your data. There can never be enough data preparation and checking!

5 - Take your time!

Since digital decarbonization is obviously such a highly multi-faceted approach, better avoid looking for quick wins. Preparation of the energy system model needs care because it will be more complex – often much more complex – than you had initially bargained for. For sure, it all depends on the size of the endeavour: it takes rather a few months than weeks when adding renewables into an existing fossil power generation system as this might require spatial decoupling of power generation and consumption to handle imminent grid constraints and finally, a flexible use of battery storage systems. It might also take some time to onboard the right experts especially the ones with field expertise – but believe me, it’s worth it. In general: Success doesn’t come overnight, after all!

6 - Know your technology well

Although the decarbonization of energy systems obviously requires know-how with electrical gerneration, supply, and distribution, the final factor I recommend prioritizing if you want to achieve successful decarbonization is expertise with digital (twin) technology itself. Put simply, you require a high-level understanding of data modeling as well as expertise in smart data technologies if you want digital twins to help decarbonize your energy system. If you don't possess these skills in-house, then prioritize outsourcing them before starting your decarbonization journey. Digital decarbonization always need these most experienced practitioners coming from multiple disciplines to optimize the specific decarbonization path.

When applying a strategical approach, the impact of digital decarbonization can be quite impressive in numbers: for instance, in one of our projects with a German city with about 200,000 residents, we modeled its energy demand and infrastructure and found that 70 percent fewer emissions by 2035 would be perfectly feasible. This project also demonstrated that a 25 percent reduction in heat demand could be achieved in the same period which is a fantastic result by any standards.

In general, the main advantages of utilizing digital twins in future decarbonization strategies will be felt in basically all public and private sectors. Given that buildings account for about 40 percent of all current carbon emissions, focusing on the digital decarbonization of energy systems will make a huge difference to the climate of tomorrow. While decarbonization resonates best with the utilities sector as a whole, high energy demanding sectors such as the chemical and similar process industries, deserve highest attention as well. Benefits like running cost-minimized energy systems designed for specific locales, such as district heating systems, both conventional and renewable local utilities production facilities, community energy storage systems, and even better managed electric vehicle charging station capacity, will offer concrete saving potentials in municipalities and smart city environments.

While reducing wasted electricity – and, therefore, saving significant expenditure on daily operating costs – businesses will be able to strengthen their brand image as truly sustainable commercial entities. In the end, I would argue that there is a significant win-win for businesses that want to remain competitive and to be seen as a trusted supplier. Digital twins are, of course, only a part of achieving a best possible decarbonized future but they will become an increasingly important one.

Are you looking for more ways to decarbonize your smart district? Find out here!

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Digital transformation is becoming an ever more urgent business imperative, with executives keen to capitalize on the significant benefits it offers. According to research from Gartner, 87% of business leaders report that digitalization is their company’s top priority. Yet we regularly see executives who don’t know how to prepare their organizations to enable and embrace it. All too often, excessive focus on the technology itself means many leaders simply overlook the importance of planning and preparation with people in mind. And it’s one of the most common causes of failed digital transformations.

Of course, digitalization must have a business case, but ultimately its aim is to benefit people and society as a whole. Successful digitalization projects demonstrate an elegant, harmonious and interdependent interaction between technology and people for the wider benefit of everybody in mind. One element alone can’t succeed without the other. That’s why the human aspect is crucial. Leaders must strive for twin goals: early employee buy-in through effective change management. Let me break down how this works in practical terms.

What many fail to appreciate is that digital transformation is a people business in which human factors and culture are the predominant influencers. And the cost of ignoring the human factor is eye-watering; the failure rate for digital transformations stands between 60% and 85% (HBR Pulse Check Survey, 2019). As a leader, once you understand that it’s as much a cultural transformation as it is a technological one, you’ll find it easier to develop an overarching strategy that has your personnel at its heart from the beginning. 

As our CEO, Aymeric, reports, he visited a customer factory in Asia that had implemented a digital transformation. Its production machinery automation was successful. But management hadn’t adequately considered the workforce from conceptualization; employees remained oblivious to how digitalization could improve the processes for them. Because they hadn’t been involved from the start, floor managers were disengaged and resisted change, reverting to experience over automation to assign incoming jobs. New systems designed to track jobs through the production cycle were by-passed and the technology wasn’t able to learn.

Initiating cultural transformation

How, then, could this situation have been better managed so that employees recognized the benefits? If you put your workforce at the heart of any transformation, employees become agents of transformation rather than casualties. So, establish clear two-way communication up-front so everyone’s aware of the direct benefits, impacts and improvements you expect.

Part of this approach is to ensure new technology and user interfaces are instinctive for all generations represented in your company. They must be intuitive for generation Z (born post-1997) as well as baby boomers (1946-1964). Workshop your digital processes, encourage feedback and be prepared to redesign them if employees find new processes harder than legacy ones. Human-centered design has a helpful analogy in today’s music-streaming apps; most of them offer pretty much the same access to music but are all slightly different in UX design. People choose to use Spotify, Apple Music or Deezer, for example, based on how they interact with them. What digital leaders need to address is: what kind of technology and processes will a wide variety of employee groups and generations need and use, and still all find intuitive, attractive and engaging?

Successful change management boils down to understanding the diversity of our workforce; our job is to make sure we know exactly who our employees are, how they learn and what makes them tick. Efforts to align your corporate culture will dictate the success of any cultural transformation and change management. There are three aspects of cultural alignment on which the success of your change management depends:

• Information & functional silos
• Corporate immune system
• Generation diversity

Information & functional silos – how to mitigate isolation

Certain functions, like legal or finance, demand specific skills and qualifications, and employees within those groups consequently pursue vertical career paths. These individual function groups tend to value qualifications and skills over agility, and the privilege they tend to enjoy as a result of their expertise, influence and resources can create a functional silo.

These groups in turn can create information silos. Function-specific business imperatives within vertical groups that are, by their very nature, functionally oriented can ignore the broader company-wide advantages of collaboration. As a result, the organization can find itself in a situation where functional silos – in which many employees already feel isolated and disincentivized to collaborate – actively resist the sort of collaboration and data-sharing essential for digital transformations.

Look for opportunities for collaboration across different functions where isolated employees can break out of their silos to form new groups. Essentially, you’re looking to instill a shared culture across a diverse group of silos to develop common values and expectations. Once you achieve that, cross-functional teams can form and disperse quickly in response to commercial demands. The result? A more agile, coordinated operation.

The corporate immune system – how to use it

Let’s be clear; an immune system, like that of the human body itself, exists to protect the functioning status quo. Like the human body, that’s great if you don’t want to change anything. But disruption and innovation in an organization can be seen as a threat in the same way that a human immune system will see a viral infection, for example; individuals within your corporate structure may act to resist and neutralize anything that threatens to change any part of your company’s past and present.

Your corporate immune system – a key element of the human factor – can halt your entire digital transformation in its tracks. And it uses three key traits of human nature – resistance to change, skepticism and suspicion – to decrease innovations like digitalization. It’s important to recognize each of these three traits, so let’s have a closer look at the detail.

Resistance to change is partly rooted in a natural fear of the unknown, as recent experience with one of our clients shows. Engineers at a major energy equipment supplier feared losing their jobs to an AI design algorithm. The engineers were skeptical of an automated process. As a result, despite the benefits in time-to-market and reduced costs, the company experienced widespread resistance to proposed changes in design processes.

The solution was to pick out a handful of coaches from among the engineers, selected on their willingness to adopt change and their ability to act as role models to colleagues. These coaches were given access to the organization’s entire digital strategy, allowing them to see how important the transformation was to the company’s continued success. This gave the coaches the opportunity not only to identify new emerging roles as a result of the transformation – roles that would give engineers valuable extra skills – but to plot their development within the organization. Once satisfied that change was desirable, the coaches acted as intermediaries to explain the potential to their colleagues. As a result, engineering teams that had previously feared the unknown and were therefore resistant to change sensed the urgency and benefit of the change; in the end, those teams actively pursued change to bring about a successful launch of the algorithm.

Skepticism is insidious, so it’s important to keep an eye on it. Skeptics may have experienced failed transformations with previous employers, and this can strengthen a pervasive narrative that digital leaders may be untrustworthy. One way to overcome this is to identify prevailing skepticism in the team. It’s important to get a feeling for employees that might not possess core competencies that are critical to the success of any transformation: collaboration, disposition to change and agility. Conversations, support and internal or external training can be useful to upskill employees and address any gaps in core competencies that are identified.

Finally, the immune system deploys suspicion. Few employees simply tend to dislike the need for change. If they feel being left behind, they’ll look at the evolving target state and take that as justifiable grounds for suspicion. In reality, due to inevitable ongoing developments, the target state of digital transformations can continuously evolve – and change can happen quickly. If a small number of skeptics latch onto this, this tiny minority might already think the transformation will fail. If left ignored, the attitudes of that small minority could gain wider traction across the organization.

Generation diversity – how to identify & harness behaviors

It’s common for many organizations to play host for three to four generations of employees. Broadly speaking, your workforce will fit into one of four categories: baby boomers (1946-1964); generation X (1965 – 1976); millennials, or generation Y (1977 -1997); and generation Z (post-1997). Successful leaders know that they all think and feel differently.

That’s not to say these generations don’t share common ground, and we should beware of stereotypes. But leaders need to know unique attributes of distinct generations in order to take everyone of the transformation journey. Include the baby boomers, for example, and leaders are getting valuable knowledge, expertise and experience.

To make your transformation effective, the use of training to embed cross-generational mentoring is worth considering. The thinking behind this suggests that pairing different generations creates complementary strengths. One possible approach is to pair millennials with baby boomers, helping employees in their 50s and 60s understand exactly where their accumulated wealth of experience fits into your digital transformation. Another possible way is to follow the example of Italian fashion brand Gucci and establish a shadow board, made up of non-executive millennials to expose older executives to broader perspectives. Since it was established in 2015, its internet and digital strategies have been largely responsible for a 136% growth in sales.

Those two clear goals - early employee buy-in and effective change management – are at the heart of a successful transformation. Aligning your corporate culture to lay the ground for effective change management involves planning with people in mind and communicating those plans clearly; understanding their digital preparedness and anticipating employee reluctance will help ensure nobody is left behind.

So, before anything else: put people at the very heart of your transformation now. If you enable them as agents and advocates of change, together they will help you unlock the power and full potential of digitalization for your business.

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The speed of change often blows my mind. It took 75 years to get 100 million people using the telephone, but in 2016 it took just one month to get 100 million people playing the online game Pokémon GO.

Our world’s level of complexity is increasing tremendously. In today’s world of digital transformation, circumstances dictate that we make weekly if not even daily decisions of strategic importance. Nowadays, it’s vital to turn organizations into future-sensing organisms with the capability to probe, sense and respond continuously. IoT is a major lever for this transformation, serving both business and community. In fact, the best examples of IoT in action show that this double objective is clearly being met.

IoT is transforming the way we work – and the way we live.

Imagine the scene: a strong storm over an offshore facility. Grid operators are warning of outages. The challenge is to manage the gusts exerting excessive wind loads on the turbines of an offshore wind farm and to avoid potential interruptions to clean energy generation.

When storms like this exceed the operating limits of certain wind speed ranges, the turbines apply a brake and stop operating. However, there is an operational and commercial requirement for all turbines to be available as much as possible.

Here’s the solution: turbines with sensors and an IoT cloud-based platform incorporating for example machine learning (ML) that allow increased remote monitoring and troubleshooting. Using data from different sources, such as weather or operational data, allows to utilize the maximum potential of the wind farm. As a result, turbulence can be managed as optimal revolutions-per-minute are maintained and specific loads across the turbines are balanced.

How is this changing the world?

With assets maximized to deliver in extreme weather conditions, we’re less likely to suffer power cuts. So, the electricity in our hospitals, schools and homes stays on and our communication networks remain operational and robust. All with clean, zero-carbon energy utilized to its full potential – no matter how big the storm.

Manufacturers are usually eager to improve factory set-ups and assembly line design to attain greater worker safety and better resource efficiency. But how can that happen without taking the factory off-line for an expensive physical run-through?

The solution is a digital twin: A digital simulation of a real-life process that allows the factory to trial any proposed improvements or changes. Created with plant simulation software, the facility can develop a digital twin of the assembly line design based on a 3D material flow simulation model. In other words, it builds a factory simulator.

How is this changing the world?

What this example shows is how we can plan changes to any part of our physical world without exposing humans to unquantified risk. And we’re no longer subject to so many downtimes in our real-life systems; they march on while their digital twin ponders a more productive future for them.

IoT allows us to identify unknown pitfalls without any risk to assets, while business-critical systems remain online. Its primary human benefit here lies in reducing risks exposure during trial runs, for example on new factory line design. Further, it opens the way to improve workplace health and safety.
 

When we walk on the sidewalks of our streets, we rarely think about what is happening underneath us. But there’s an IoT story buried down there that is much more than just a legacy heating system blowing off steam.

A city underground network hosts a typically extensive array of critical infrastructure, including miles of electrical cables, water systems, and gas pipelines. If any part of it fails, everything can grind to a halt in seconds. That’s why it’s essential to monitor the underground network constantly to ensure the city’s functions are never interrupted.

Previously, maintenance would have involved work that was expensive, time-consuming, and dangerous. But by equipping critical infrastructure with smart sensors – predicting maintenance issues long before anything goes wrong – it’s possible to watch, detect and transmit the condition of fibre-optic cables and gas pipes in real time. Meanwhile, with the potential threat to public safety, IoT-based early warning systems are able to reduce incidents significantly.

How is this changing the world?

These technologies increase safety and reliability. They deliver efficiencies, save time and reduce costs. That means our broadband is less likely to fail; it ensures a safe water supply; and it minimizes the risk to human life and property from leaking gas pipes and manhole covers.

Think of how many factors determine whether our urban lives are happy or miserable. Can we move around the city with ease? Will the air we breathe impact our long-term health?

Air quality is one important consideration among many that challenges citizens and planners alike. In order to reduce the impact on people’s health, city authorities are searching for new ways to manage and reduce air pollution in metropolitan areas. One possible solution is leveraging the potential of cloud-based solutions and Artificial Intelligence (AI). Comprehensive data analysis and forecasting enable decision makers to improve emergency response times and lower emissions of carbon dioxide, carbon monoxide and nitrogen oxide. How does it work? IoT gathers emissions data in real-time and simulates immediate future actions designed to improve air quality for example by adapting speed limits or offering free public transport.  

How is this changing the world?

The forecasts allow cities to simulate measures to avert or mitigate breaches in air quality standards. The result? Lower greenhouse gas emissions that support a happier and healthier metropolitan life where we can move with ease and enjoy the full potential of cities.

Yes, the world is becoming increasingly complex, and so how we deal with it must mirror that. But underneath this complexity is a relatively simple philosophy – to adopt a growth mindset and learn to react effectively with solutions that genuinely benefit the individual, the organization, and society at large.

As we have seen, IoT has already affected us in many positive ways. Businesses are seeing both cost savings and greater revenue, and governments are finding better ways to provide essential services relating to security, infrastructure, environmental protection, and beyond.

And we are just starting. Now is the time to shape the future world we want to live in – using technology with purpose which serves both business and society!

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