Electricity has been hailed as one of the most important technological advancements in human history. For over a century it has brought light to our homes and catalyzed industrial revolutions. Now electricity will look to solve our biggest problem yet: climate change. In order to make our electrical use more efficient and sustainable, experts predict in the next 20 years more money will be invested into electricity than since the technology’s inception. This innovation will usher in a new era of electrical power that will fundamentally change how every structure uses electricity.
“The world will be massively more electric because electricity makes energy green,” Schneider Electric CEO Jean-Pascal Tricoire said to kick off the Schneider Electric North American Innovation Summit. Schneider Electric sees the next electrical revolution on the horizon. The multinational corporation employing tens of thousands globally is working to develop efficient and sustainable solutions for electricity and all of its applications. “The biggest migration will be buildings. In many places, buildings use fossil fuels for cooking, for heating. All of that is going electric, which will be green. Electricity isn’t a new technology, but this isn’t the same electricity. It’s about new forms of energy, renewables, and new grids.”
Electricity 1.0 is the story of harnessing the raw power of electricity into something usable, eventually producing the first light bulbs. Between 1870 and 1970, a period dubbed Electricity 2.0, power was distributed throughout the nation through programs like the Rural Energy Electrification Act. By 1950, 90 percent of Americans had access to low-cost electricity. In The 1970s, unintended consequences of mass electrification began to develop, ushering in Electricity 3.0, an era focused on understanding the impact of burning fossil fuels in power generation. The energy crisis of the 70s drove politicians to enact changes. After the Department of Energy was formed in 1977, conservation began to be a frequent topic of public debate. Evolving electrical grids from electromechanical to a higher efficiency solid-state laid the ground for electricity 4.0. The digitization of electricity will fundamentally change how buildings and people interact with the grid. Digitally inter-connected electrical systems will leverage data and interoperability to uncover new efficiencies, driving savings and innovation. The digitalization of energy means making smarter decisions quicker to achieve efficient electrical technologies’ highest function.
“Our problem isn’t new buildings,” Tricoire continued. “It’s the existing stock.” More than half of existing US buildings were built before 1980. Nearly two-thirds of our existing buildings will still be operational in 2050. Buildings more than four decades old were never designed to meet the challenges of our current decade. Upgrading and replacing energy-consuming equipment in buildings is the key to unlocking a new revolution in energy, according to Schiender. In the United States alone, more than $279 billion could be invested across the residential, commercial, and institutional market segments. This investment could yield more than $1 trillion of energy savings over 10 years, according to estimates from the Rockefeller Foundation. Better yet, retrofitting America’s building stock would create more than 3.3 million cumulative job years of employment.
Before the pandemic, the building industry was already going through rapid changes. Now this change has been accelerated. Just a decade ago, sustainable design was defined by LEED ratings, a relative rarity. Now sustainability is being pursued for almost every type of building. In New York City, buildings are being bought, modernized and flipped for this very reason. Considering that in your average office building, nearly 30 percent of energy is wasted, there’s massive room for improvement in electrical efficiency. Preventing the spread of an airborne illness like the coronavirus means circulating large amounts of outside air, which increases energy costs. Smart buildings full of IoT devices and sensors, all requiring power, all increase a building’s energy demand. Soon office buildings will likely be charging electric cars in their garages, further increasing demand. Global energy consumption in buildings will grow by about 1.3 percent per year from now until 2050, according to U.S. Energy Information Administration projections. Building owners and managers will be tasked with solving those dueling expectations of their tenants. That’s why so much investment is coming to the electric power industry.
For a glimpse of our electric future, look to San Francisco, where The San Francisco Board of Supervisors voted unanimously to ban natural gas in new buildings, which will apply to roughly 32 million square feet of commercial space in the city’s development pipeline, according to the San Francisco Chronicle.
Climate activists understand the role buildings play in our carbon emissions. Locally, natural gas accounts for roughly 40 percent of San Francisco’s overall emissions of greenhouse gases and 80 percent of building emissions. New construction will require cleaner, all-electric buildings that aim to reduce emissions while providing improved indoor air quality. In California, more than 30 local governments have passed restrictions on gas use in new construction since 2019. San Francisco, the state’s fourth most populous city, is by far the largest metro to make the change. The new laws allow city officials to issue permits for a building with gas plumbing in cases where constructing an all-electric structure is “physically, technically, or structurally infeasible.” It also makes an exception for commercial kitchens. Such a ban was challenged in a lawsuit by the California Restaurant Association when Berkley implemented similar measures.
Several studies have shown that electrifying our buildings is consistently the lowest-cost solution to reduce emissions in the building sector. The better a building can monitor its energy use, the better it can manage it. Heat pumps are becoming more efficient and incentivized by municipal power providers. More efficient appliances and electrical devices must be mandated by state governments. Electrical induction cooktops are gaining popularity among the world’s top chefs. Better use of batteries and thermal energy will also help electricity meet our demands safely. Advanced building management systems, high efficiency solid-state lighting, state of the art windows and enhanced building envelopes will be needed in new and existing buildings if we’re to meet climate goals.
“This isn’t new technology, we’re not talking about investment in the next 10 years,” Erin Grossi, Managing Director for global innovation and growth strategy at Accenture told viewers at Schneider’s Innovation Summit. “It’s next year. It’s 2021.”
All of those technologies will be a key part in the digitization of energy that defines Electricity 4.0. Each of those technologies will be connected and interoperable, sharing data for further optimization. Digitization means using new technology like those listed above to generate more data to create better AI and machine learning. Combining the two means our buildings will make better energy decisions faster because of automation.
Digitalization alone could cut total energy use in buildings by as much as 10 percent. Cumulative energy savings over the period to 2040 would amount to 65 PWh—equal to the total final energy consumed in non-OECD countries in 2015, according to the IEA. Digitalization is the key to decentralizing our power grids, which in turn leads to decarbonization.
Modern life depends on the continuous availability of affordable electric power. Electricity use in the U.S. is projected to grow by 25 percent from 2013 to 2040, according to the US Department of Energy. That creates both a unique challenge and opportunity. If we can meet new demand with renewables sources like wind, solar and hydroelectric, we can turn our power systems into the climate’s ally, instead of its enemy. We’re in the midst of a new era of electricity that is reshaping how we interact with technology more than a century old. It’s time to see electricity in a new light.