France’s Schneider Electric sees plenty of room to grow its energy efficiency business in Brazil, the company’s energy management vice-president, Philippe Delorme, told BNamericas.
According to the executive, by 2030, a low-carbon, climate resilient economic recovery in Brazil could deliver a net increase of more than 2mn jobs, which is four times more jobs in the Brazil’s oil and gas industry, in addition to a GDP gain of US$535bn.
With companies and industries pursuing a more sustainable agenda, while reducing energy costs, opportunities flourish in many sectors of the economy, such as mining, oil and gas, infrastructure, food and beverage and datacenters, Delorme said.
BNamericas: What is the potential for new businesses in Brazil’s renewable energy sector after the COVID-19 crisis?
Delorme: Brazil is a very specific country in terms of renewable energy, with a large share of its power being provided by renewable sources. Besides, it is a destination for a lot of money directed to clean energy undertakings.
In 2019, US$6.5bn were invested in new clean energy projects in the country. Globally, post-COVID, in 2020, power consumption should fall between 7% and 10%, and I think something similar will happen in Brazil. Before the pandemic, Brazil was exceptional for its size in the renewable area, getting growing investments. After COVID, it may slow down a bit, but I would say it is a trend that has come to stay in the world.
BNamericas: And in Brazil as well? Why so?
Delorme: Some 70% of Brazil’s electric power come from hydro plants, which makes the energy security topic an important issue. There is pressure in order to diversify the country’s energy matrix. Solar power, for instance, represents only 2GW out of 160GW, which is too little of a share.
BNamericas: Companies and industries are being forced to reorganize their working space because of the pandemic. How does it affect the energy efficiency market? Is Schneider being sought to provide energy solutions?
Delorme: Everywhere we support our customers to drive energy efficiency investment, they get their money back in one to five years, with average energy savings in the neighborhood of 30%. Globally speaking, buildings consume around 40% of the world’s energy, and, in Brazil, this figure is even higher. So the topic of energy efficiency is very important for the country.
The COVID pandemic is accelerating the process of digitization of buildings so they can be remotely managed. This can be true for hospitals, hotels or offices. The side effect is that the digital building is more energy efficient, because you can, for example, put it to sleep at night and you know where abnormal consumption is.
BNamericas: What are the projections for investment and growth of the energy efficiency market in Brazil in the next years?
Delorme: What is for sure is that energy efficiency investments foster the creation of local jobs, which is something every government in the world is looking for at the moment. By 2030, compared to business-as-usual, a low-carbon, climate resilient economic recovery in Brazil could deliver a net increase of more than 2mn jobs, which is four times more jobs than those already existing in Brazil’s oil and gas industry, in addition to a total GDP gain of US$535bn, equivalent to the annual GDP of Belgium.
It could also create US$3.7bn in additional agricultural production and US$144mn in additional tax revenues from the agricultural sector, besides a 42% reduction in greenhouse gas (GHG) emissions by 2025, compared to 2005 levels, exceeding Brazil’s current national climate commitment under the Paris Agreement.
BNamericas: Which kind of jobs are expected to be generated?
Delorme: Mainly in the service area, like maintenance activities. Governments are now realizing that building and construction is a big share of their GDP and energy consumption. So it is a good bet for any government to build a more competitive economy and providing new sustainable jobs to drive greener energy and less energy consumption.
BNamericas: What are Schneider’s revenue targets in Brazil?
Delorme: We do not disclose these numbers. What I can say is that Brazil is a very important country for us. We have 2,000 employees and four factories there.
BNamericas: In August, Brazilian power generator CPFL invested US$8.76mn in a new integrated system for network operation supplied by Schneider Electric as part of a broader strategy to digitize its processes. Is the company negotiating with other power generators similar contracts?
Delorme: In Brazil and all Latin America there is plenty of room for growth in this market. With the COVID-19 pandemic, many companies understood that, if they cannot manage to remotely control their network in a dynamic manner, their businesses will be in trouble.
We have strongly invested in new softwares for real-time management of networks in the pursuit of the optimal balance of supply and demand, and we hope to expand this business in Brazil and South America, participating in the digitization process of utilities.
BNamericas: What is the profile of Schneider’s clients in Brazil?
Delorme: Besides electric power distributors and generators, we provide services for mining and oil and gas companies, in addition to a growing category: datacenters. The social distancing rules have created a gigantic wave of new big datacenters that are running new applications.
These facilities are great energy consumers in need of reliable supply, and are pretty complex to design, build and operate. Then we also have buildings and food and beverage groups, among others, where we also see a massive switch to more digital investments, which goes in the direction where we are driving our portfolio.
BNamericas: Do you notice oil companies demanding more energy efficiency solutions?
Delorme: All these companies have an obligation from their shareholders or a very strong push to reaching sustainable goals. Besides, for all of them, energy represents a big cost, either in oil extraction or refining. So they are all accelerating energy efficiency investments and digitizing their industrial processes.
BNamericas: Oil majors such as Shell, Total and Equinor are investing in renewable energy projects in Brazil. Could this create new business opportunities for Schneider?
Delorme: This indicates that we are switching to a post-carbon world step by step. Not so long ago, the CEO of [French oil company] Total said that electricity would become the main global energy source. For the world to become carbon neutral by 2050, we have to be massively more digital and electric. While we will keep working to make oil companies’ operations in their current business more efficient, we will also help them switch to a more sustainable business.
About Schneider Electric
Schneider Electric is leading the Digital Transformation of Energy Management and Automation in Homes, Buildings, Data Centers, Infrastructure and Industries. With global presence in over 100 countries, Schneider is the undisputable leader in Power Management – Medium Voltage, Low Voltage and Secure Power, and in Automation Systems. We provide integrated efficiency solutions, combining energy, automation and software. In our global Ecosystem, we collaborate with the largest Partner, Integrator and Developer Community on our Open Platform to deliver real-time control and operational efficiency. We believe that great people and partners make Schneider a great company and that our commitment to Innovation, Diversity and Sustainability ensures that Life Is On everywhere, for everyone and at every moment.
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