The energy transition question is no longer about “if” the oil and gas sector should drive change, but “how” it will do so. As companies consider the energy mix of the future, they need partners to enable their transition.
The efficiency question
“Through the energy transition, we will have multiple sources of energy that must be combined to offer an atherogenic energy mix,” says Christian Cravedi, ABB SVP and hub manager for Energy Industries in India, Middle East and Africa. “But ultimately, with every energy type, reliability, availability and efficiency are the key.”
He notes that it is a simple equation: Every system that produces energy requires energy to run, so higher efficiency means less energy consumed in the production process for a better product, and a lower environmental impact. “We integrate electrification, automation, field instrumentation, telecommunications under the umbrella of ABB Ability™, a fully digitalised solution allowing data to achieve reliable, sustainable output across different sources,” he says.
“Today’s technology allows the energy transition journey to guarantee reliability and efficiency,” Cravedi says. “Going back to basics, oil and gas companies are focusing on the reliability, availability and maintainability of the plant, and on emission control. In terms of philosophy and strategy, they are already investing into other energy forms like solar, wind power and hydrogen.”
Wood Mackenzie forecasts global hydrogen demand to increase between two- and six-fold by 2050, for example, and major energy companies around the region are investing heavily in hydrogen.
We need to be careful and effective in planning our future. Technology needs to serve us, not the other way around.
Christian Cravedi, ABB SVP and hub manager for Energy Industries, India, Middle East, and Africa Region
Investing with insight
Cravedi is wary of heavy investment without insight—during our interview, he recalls an interesting story. In the 1800s, billiard balls were made of ivory, taken from elephant tusks, which was expensive and cost the lives of many thousands of elephants. A billiard ball producer put out a large prize for anyone who could make the product less costly—both financially and environmentally. Cellulose was discovered and subsequent developments eventually led to the discovery of Bakelite, Vinyl, Nylon, PET, Polyethylene, Polypropylenes, etc.
“Imagine that some of the innovation that led to the plastic era started with the goal of protecting animals and conserving nature,” he says. “We didn’t understand that plastic was not designed to be used to build disposable goods and we were unprepared to manage the consequences on our environment of such a massive usage.”
This holds true for the energy transition—whenever society aims to develop new technologies, whenever we discover a new form of energy, we immediately need to develop a cultural and strategic approach that allows us to be adaptive in how we manage change, says Cravedi. One simple example is electric vehicles. They have potential to reduce emissions and are frequently flaunted as a major component in the overall solution to climate change, but we have yet to learn to manage the large number of electric car batteries that we will need to recycle. “Every new technology generates new challenges,” Cravedi says. “There is a hidden rule: Every new form of energy, every new material, every new technology challenges us to be ready for it .”
Every new technology calls for new challenges. If we don’t think upfront about how to manage these challenges, then we’ll have to face a different problem tomorrow.
Christian Cravedi, ABB SVP and hub manager for Energy Industries, India, Middle East, and Africa Region
Transitioning internally
Partners to oil and gas producers are also facing a dual challenge in the energy transition—not only do they have to help power the transition for national and international oil companies, but they also have to decarbonise their own operations.
Cravedi is positive about ABB’s outlook. “It’s a transition—ABB has a net zero objective for 2030,” he says. “We already generate 30% of ABB’s electricity needs from renewables, and 40% of our sites have stopped sending waste to landfills. We keep full track of all our objectives and we have a dashboard that indicates our level of achievement towards our target.”
He notes that localisation is already a part of energy transition plans, since shortening the supply chain means less international transportation is needed, resulting in lower emissions. “The Middle East region drive it through In-Country-Value programs, and this will have a positive impact on our business and environmental sustainability,” he says. This also applies to the partners that ABB works with—Cravedi says that the environmental impact and green approach of their potential partners are key criteria in the assessment process.
“We need to be careful and effective in planning our future,” he concludes. “Technology needs to serve us, not the other way around.”
