FROM BROWN TO GREEN

Green energy is no longer an option but a necessity, even for an erstwhile traditional utilities group, says the head of Engie in Asia Pacific. By Uma Devi in Singapore

Energy companies are evolving quickly as the world shifts to cleaner and greener energy. Engie, for one, has shifted from a traditional energy corporation to being green-driven, and is now looking to help other organisations chart their transition roadmaps. Thomas Baudlot, 41, head of Engie Southeast Asia and chief executive of the group’s Asia Pacific energy solutions business, says that going green was a “very simple” decision for the French utility group.

Once the world’s largest independent power generator, Engie was a traditional utility enterprise — one with very carbon-intensive operations, and heavy exposure to coal.

Six years ago, the group completely shifted its business to a greener and cleaner focus, which was something of a shock to the employees, recalls Mr Baudlot.

“We looked into the future and saw that there was no other path than going green. There was no way we could continue operating our business without having a big impact (on the atmosphere),” he says.

Today, the Engie Group has over 170,000 employees across the globe, of whom more than 2,000 are in Southeast Asia. The company is involved in a number of industries including agri-food, data centres and pharmaceuticals, and prides itself on being a “one-stop solution provider” for its clients, offering them a range of services through its three businesses — electricity, natural gas and energy services.

As governments around the world act on the realities and urgency of climate change, there’s been an accelerated switch from so-called brown to green energy. Brown energy refers to power produced from polluting sources, while green energy is derived from renewable and non-polluting sources. Rising sea levels and temperature changes are just early signs of climate change.

And while more governments and businesses have begun to take the issue seriously, more can and should be done, says Mr Baudlot.

“There have been a number of initiatives that have been known to deploy green energy or efficient solutions. So that’s a really good sign,” he says. “(But) if we want to collectively win the race against climate change, then there will need to be an acceleration happening.”

The Covid-19 pandemic has helped spur the sense of urgency.

Mr Baudlot observes that many of Engie’s clients now have sustainability on their agenda as a priority. The company is thus seeing more demand for its services now than it was before the pandemic.

ONE-STOP SHOP

Asia is a rich and diverse continent, but this also makes it more challenging for a company like Engie that had to start from scratch in the region.

To separate itself from the crowd, Engie’s aim from the start was to build a platform to deliver a unique set of services to its clients. All of Engie’s services are fully integrated, which enables it to provide customers with a wide variety of options.

For instance, while there are other players in the market that can provide solar energy to an industry or building, Engie can go one step further by setting up smart systems within the buildings. The company can provide strategic thinking, design planning and a wide range of solutions that suit customers’ needs.

Although clients will not necessarily want all these implemented at the same time, the ability to offer the range puts Engie in a “completely different ballgame” by allowing the company to talk to customers at a “strategic level” to better understand their needs.

This, Mr Baudlot says, is important because energy transitions for a company — or a city — is a long journey that cannot be achieved without planning. For instance, Mr Baudlot points out, Singapore has set the most “ambitious norms” for the efficiency of its buildings.

He recalls a project that Engie had with a property developer in the city-state that was looking at how it could make one of its buildings more energy-efficient.

Engie considered technology and had its digital team come up with a few products that were “relatively inexpensive to deploy” which would further reduce energy consumption. The outcome? Energy savings of about 10%, by simply “operating better and putting more intelligence” into the way things in the building were used.

Businesses today still have the idea that going green will cost them money. But things have improved, Mr Baudlot says. More people are now beginning to understand that it makes sense to use technology to make processes or structures more energy-efficient.

Yet getting the energy transition imperative across to more enterprises remains a tough sell, especially in this region. “We’re still advocating it, but we’re very much helped by the fact that there is not much to do when you look at the cost efficiency or the sustainability impact,” he says. “You can embark on low-carbon solutions without it being painful.”

He adds: “Yes, (companies) might have a little cost to bear to implement the system. But you make so much savings from honing the system along the way that the equation is very positive.”

GREEN DATA CENTRES

Catering to different industries is no mean feat for any company. The energy sector is tricky in the sense that there is no one-sizefits-all narrative for companies.

“You don’t address sustainability challenges of offices the same way you would do for a data centre or for a real estate developer; it’s completely different,” says Mr Baudlot.

He recalls how one of the key challenges for Engie early on was to make a strategic decision about what sectors it wanted to focus on, and define specific strategies and offerings for those particular industries.

For Southeast Asia, the three sectors were real estate developers, data centres, and manufacturers such as those in pharmaceuticals and biomedicine. Among these three, data centres have arguably acquired a poor reputation in the green energy space.

While global spending on these centres has surged amid widespread internet usage, they have been termed “energy guzzlers” for their copious consumption of energy for cooling systems.

A report from the International Energy Agency (IEA) in June last year estimated that data centres account for about 1% of global electricity demand. Emerging digital technologies such as machine learning, blockchain, 5G as well as virtual reality are also poised to further, if not exponentially, raise demand for data services, which would lead to even greater energy consumption.

And given that many people everywhere have pretty much become “addicts to their phones”, more data centres will emerge around the world as the need for computer storage and computer power grows. “These facilities are running 24/7, and they are a huge strain on the energy systems of our countries,” he says.

But governments around the world have stepped up to tackle the problem. In Singapore, a moratorium has been imposed on the construction of new data centres as the authorities seek a more sustainable way to support the growth of the multibillion-dollar data centre market.

Meanwhile, the European Commission has included a key target in its digital strategy released in February last year for the information and communications technology (ICT) sector to achieve climate neutrality by 2030 while improving data collection and transparency.

End-users like Google, Amazon and Facebook have also pledged to go carbon-neutral, Mr Baudlot notes. This means that Engie’s solutions that will make their facilities stable are often “a good match”, and this gives him hope that green data centres will eventually become the new normal.

We looked into the future and saw that there was no other path than going green. There was no way we could continue operating our business without having a big impact (on the atmosphere)

You can embark on low-carbon solutions without it being painful. … You make so much savings from honing the system along the way that the equation is very positive

Engie designs and installs data centres that are as efficient as possible, using the minimum energy needed to cool computers that have been running continuously for long periods of time.

This can be done via carbon capture — the process of trapping carbon dioxide at its emission source, transporting it to a usually underground storage location, which ensures that no carbon is emitted from the unit.

Another way is to use green hydrogen, produced by splitting water into hydrogen and oxygen using renewable energy sources such as wind and solar.

While countries are still largely reliant on traditional energy forms to power their data centres, Mr Baudlot says the transition is already possible as the technology exists. What’s lacking is the scale that will allow the costs to be kept low.

“Green hydrogen is great, but it’s more expensive than traditional electricity,” he says. But by 2030, he foresees, green hydrogen will “be at parity” with liquified gas.

There has also been a lot of interest from countries such as Singapore, and in Europe and North America, to tap these technologies, he adds.

JOINING FORCES

While Engie may have a unique proposition, Mr Baudlot is quick to stress that partnerships have always been, and will continue to be, important for it to capitalise on opportunities across different industries and countries.

Partnerships are also one way for Engie to link up with bigger energy players, and make its mark in the industry. “A partnership allows two complementary players to work together. So the sum of the parts is greater than individuals, if you wish,” he says. “Partnerships are really very much in our DNA, it suits us well.”

In a partnership, Engie can help companies with the thought process of making the change to greener energy solutions, do the research and implement the solutions, while they stay focused on their core business.

A joint venture also allows Engie to grow its scale of solutions, says Mr Baudlot. And the company has inked a number of partnerships in Singapore. These include a tie-up with the local transport operator ComfortDelGro to provide electric vehicle (EV) charging across Singapore.

In July, Engie and LOGOS signed an agreement to build a platform to provide solar generation and renewable energy options for the latter’s Asia Pacific clients. Engie is also in a venture with JTC Corporation to develop and construct an underground district cooling system for the Punggol Digital District in Singapore.

Looking ahead, more partnerships can be expected for Engie as the global transition to cleaner energy gathers speed.

“As the world moves toward a low carbon footprint, a lot of our industries will make the shift and sustainability will gain momentum. And we will need skills, young talents, people that come up with ideas and energy to change our ways of producing and consuming,” Mr Baudlot says.