June 2018
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POWERING OUR FUTURE – DIGITAL DISRUPTION IN THE ENERGY INDUSTRY HYDROGEN THE NEW ELECTRIC?
LEADING THE CHARGE FOR ELECTRIFICATION WITHIN LOGISTICS TOP 10 GREENEST UTILITY COMPANIES IN THE WORLD
EMBRACING THE DISRUPTION ERA SHELL LUBRICANTS HAS RIPPED UP THE SUPPLY CHAIN MANAGEMENT RULEBOOK
WELCOME TO THE June issue of Energy Digital magazine. This month we are focussing on all forms of sustainability, whether that’s ‘going green’ or ensuring a big firm can carry on its legacy. Dean Laurent, purchasing manager at Arcadia, talks about how the European retail giant has benefitted from more costefficient energy to its stores in a deal with energy provider Gazprom. We’re also looking at digital disruption in the energy industry and some upcoming trends to keep an eye out for in the space. Turning to transport, we update you on the latest smart vehicles running on hydrogen power as well as Volvo’s first ever electric truck. Could traditional fuel be on the way out in a more sustainable age? We’ve also taken a look at the top 10 green utility companies to watch as they continue to grow. Want to keep up to date on the latest must-see events in the industry over the coming months? Check out our ‘events’ section to find out all you need to know. We are also proud to have spoken to oil company Shell about its move from forecasting to demand-driven planning in its supply chain and how this will improve efficiency for the business. Enjoy this month’s issue of Energy Digital, and if you have any feedback or stories to share, head over to Twitter @ EnergyDigital
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ENERGY 4.0
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26 Fashioning
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smart energy procurement
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POWERING OUR FUTURE - DIGITAL DISRUPTION IN THE ENERGY INDUSTRY
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Hydrogen the new electric?
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T R A N S P O R TAT I O N
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Leading the charge for electrification within logistics
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Company Name SECTOR
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C O M PA N Y PROFILES
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Orazul Energy LATIN AMERICA
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Q’Max Solutions USA
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112 Hypower Inc. USA
132 Qatar Cool MIDDLE EAST
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REVOLUTIONISING THE SUPPLY CHAIN THROUGH DEMAND-DRIVEN PLANNING Written by C AT H ER I N E S T U R M A N Produced by R I C H A R D D U R R A N T
Shell Lubricants has ripped up the rulebook in supply chain management, fully disrupting the industry
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lobal supply chains are facing increased customer and portfolio complexity. Heightening consumer demands are leading companies to look at ways to transform existing processes to drive efficiencies, lower costs, provide quality customer service, all whilst lowering working capital and inventory. No business is more invested than Shell Lubricants. The global leader (in terms of market share and branded product) in finished lubricants for the last 11 years, continues to house most of its downstream business on a single instance of SAP, enabling the company to standardise its work practices on a global scale. However, growing complexities and ambitious business plans have led to amplified pressures across its supply chain operations. “I think the challenge for supply
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chains, especially global supply chains that are heavily networked, is really what to do with this complexity,” explains Global Planning Excellence Manager, Nick Lynch. “In 2013/4 Terra Technology, who are now part of E2open, published an annual cross-industry survey which showed that whilst the number of products sold increases, the total amount sold remains pretty flat in most industries. Therefore, as the volume sold per product goes down we can expect SKU level forecasting to get harder the more spread out a portfolio is. This is a trend we certainly recognise. The future is not likely to be simpler than our business of today. “In practical terms this means that with our traditional forecast driven MRP planning tools, we purchase raw materials, manufacture products and put inventory into the warehouses based on our forecast that predicts that we’ll sell it. In reality, the forecast is sometimes correct; often it is not even with best-in-class forecast performance,” he says. “Products that don’t sell to forecast tie up precious working capital and may
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DELIVERING SUPPLY CHAINS THAT WORK
SMARTCHAIN IS A COMPANY OF INDUSTRY AND CONSULTING SUPPLY CHAIN EXPERTS WITH A LONG TRACK RECORD OF DELIVERING SUSTAINABLE CHANGE. We strongly believe that the Demand Driven Adaptive Enterprise and the Demand Driven Operating Model are the models for the future. These models are already unlocking the full potential of the Supply Chain for the organisations that are willing to embrace them. Our mission is to support these organisations – like Shell – as they take this transformational journey.
smartchainllp.com info@smartchainllp.com
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become excess or obsolete inventory. Lubricants fills over 2mn bottles a day, With more than 10,000 saleable SKU’s and undertakes 30mn deliveries a year it is easy to understand the pressure to direct customers and distributors. that this may put on operations. Those Lynch’s role to drive Shell Lubricants’ products will have consumed capacity long-term strategy and subsequent and materials that could otherwise roadmap for its global supply have been used for other products that chain planning, spanning business we do need at that moment. These processes, systems and organisation may be products design, is therefore that weren’t in one that cannot be the forecast underestimated. which become “We’re also a firefight and supporting the marine expediting chase. business, as well as This bullwhip or 10,000 ocean-going customers are served every noise isn’t limited vessels that carry day at 43,000 Shell-branded just to our internal Shell lubricants at fuel retail stations supply chain. It any time. So, just is clearly visible in terms of scaling in our extended that, they’re just supply through to our suppliers. huge numbers,” he adds. “A strategy based around simply being “better” at forecasting was simply DEMAND-DRIVEN PLANNING not going to be viable in the long term. In 2015, Lynch sought to look at Working harder with our traditional the advantages of demand-driven MRP processes and tools would not planning, which would seek to be enough. We had taken almost sidestep such pressures routinely all the low hanging fruits already.” seen within traditional forecast With 40 lube oil blending, base oil and driven methods and enhance Shell grease manufacturing plants, Shell Lubricants’ supply chain capabilities.
30mn
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“WE USE INVENTORY BUFFERS TO BREAK THE BULLWHIP EFFECT IN THE SUPPLY CHAIN, AND SPECIFICALLY IN DEMANDDRIVEN PLANNING, WE DO NOT USE THE FORECAST TO DRIVE OUR TRANSACTIONS” – Nick Lynch, Global Planning Excellence Manager
By implementing strategic inventory buffers, typically in areas where inventory is already held, demand-driven planning works to decouple the supply chain, breaking down traditional MRP processes which create a bullwhip effect. “You see this happening where you have a slight change in demand on one end of the supply chain, and by the time that has been filtered through all of the different replenishment calculations that go all the way along the supply chain, the variation that people at the end of the supply chain
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feel is significant,” explains Lynch. “We use inventory buffers to therefore break this effect in the supply chain, and specifically in demand-driven planning, we do not use the forecast to drive our transactions. Instead, we set up a buffer, where we wait until we have actual demand, and then make a decision based on this demand.” Deciding to take a very different approach to that of Shell’s implementation of SAP in the mid2000s, Lynch adds that he wanted to see how the business would benefit in the face of ongoing cost pressures
DEMANDDRIVEN INNOVATION: EPIC RESULTS Orchestr8 is the world’s best supply chain planning platform with 15 years of demand driven implementation success. Designed by planners for planners. The global leaders choice.
www.orchestr8.com info@orchestr8.com
SHELL regularly seen in the oil and gas industry. However, in today’s supply chain climate, big changes programmes like this require very solid and credible business cases. Lynch required leadership and financial backing, and strenuously looked at ways to harness available data and support the required results. “We had to be absolutely clear on the business case and ran simulations around how demand-driven planning would work in a lubricant supply chain. There are very few industries doing this. Nobody’s tackled it globally yet, so I think Shell Lubricants is the first global supply chain to adopt this methodology in its entirety,” he says. “We’re talking about 30-plus key manufacturing plants around the world and several hundred stocking points, distribution centres, regional distribution centres, warehouses etc. These supply both local and networked markets, so accurate data was absolutely crucial. It’s a multi-year project of significant change management scale, which required significant commitment to drive this transformation.”
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NICK LYNCH
GLOBAL PLANNING EXCELLENCE MANAGER
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DEVELOPING EXPERTISE In order to gain further support to implement demand-driven planning, Lynch liaised with Shell Lubricants’ regional planning managers in the Americas, Europe, Africa and Asia Pacific (APAC) to discuss the business’s ongoing supply chain roadmap. “There was enough interest at that first meeting to warrant their support for doing the first of the detailed simulations, which was completed in the North American business,” he says. By partnering with consulting firm, SmartChain LLP, the business then
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worked to simulate 12 months of real business data to look at how things ran during this period of time. With this data, Shell was able to simulate what would happen with a demand-driven methodology, with exceptional results. Noting that SmartChain LLP has been vital in transforming Shell’s supply chain capabilities, the firm has also been instrumental in delivering essential expertise across its entire design, build and implementation. “I reached out to SmartChain back in 2014 to take a first look and educate myself on this topic,”
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“WE HAD TO BE ABSOLUTELY CLEAR ON THE BUSINESS CASE AND RAN SIMULATIONS AROUND HOW DEMANDDRIVEN PLANNING WOULD WORK IN A LUBRICANT SUPPLY CHAIN. THERE ARE VERY FEW INDUSTRIES DOING THIS” acknowledges Lynch. “I introduced demand-driven planning to the Shell business with SmartChain in April 2015, which is essentially when we formally started, and they have been, effectively, our consulting partner on this for the duration. “It’s a small team of very high-calibre, specialised individuals who have implemented demand driven planning before in various businesses, who could give us the benefit of a proven methodology of how to design, build and implement this. This was critical, because the size of the prize at Shell
– Nick Lynch, Global Planning Excellence Manager
could be anything between 20% to 30% reduction in working capital, garnered from what we simulated. With a lubricant business of 5bn litres, this is huge but we must also get it right. “SmartChain bring a wealth of experience and is actively supporting our global rollout. We’re live in Egypt, Spain, Italy, Turkey and our European Material Scheduling
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centre in Krakow. We’re currently working with Russia, North America, Malaysia and the Philippines.” TECHNOLOGICAL DRIVE Nonetheless, although the results from the North America simulation looked positive, Lynch explains that both the European and Asia Pacific management teams required the simulation to also be undertaken in these areas for further assurance. Tests were therefore undertaken at plants in Ghent, Belgium, as well as Shell’s Hong Kong plant and network. “They are all very different, with very different supply chains in terms of the customers they serve, the geography, the product portfolio, the networking, etc., but all simulations produced very positive results,” Lynch adds. With such positive test results, senior leaders tasked Lynch to source essential software to further transform the company’s supply chain. “There was no way we could support this with a planner’s favourite tool…MS Excel,” Lynch adds with a smile. Whilst material requirement planning (MRP) capabilities in traditional
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enterprise resource planning systems such as SAP and Oracle remain forecast-driven, Shell looked at industry software endorsed by the Demand Driven Institute, which could not only remain compliant with Shell’s IT standards, but conform to the demand-driven way of doing planning across its entire business portfolio. “The Demand Driven Institute is run by Carol Ptak and Chad Smith, who are the authors of the bible of MRP in its current form. They have introduced demand-driven MRP as a new chapter, where they have codified the structure for how demand-driven planning should be implemented,” explains Lynch. “The software had to be globally scalable, match the strict Shell IT strategy of how to buy software, and had to be cloud-based.” Narrowing its options down in late 2016, the company undertook extensive demos and tests, bringing demand-driven planning to fruition in under two years. Partnering with Orchestr8, Lynch gained leadership support and submitted the group investment proposal required to proceed
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with such revolutionary changes, in order to enable Shell IT and the software company to build the required infrastructure. “With Shell being on a single instance of SAP, it meant that with Orchestr8, Shell IT only had to build the interfaces from our host SAP system into Orchestr8 just the one time. Every country around the world is on the same system,” reflects Lynch. “We went live with our pilot in October 2017. So, March to October we completed the design, build and first implementation. That was a terrific effort by all the folks involved.” UNLEARNING OLD HABITS Introducing such a change from traditional processes; however, it remains clear that demand-driven planning will only remain successful if it is embraced by those at the helm. This is a challenge where Lynch remains confident the business will overcome. “We’ve put nearly 200 people in planning through certified demand-driven planner training and are taking them through a sensible change journey throughout
FACTS & FIGURES SHELL MAKES SELLS A WIDE VARIETY OF LUBRICANTS FOR THE AUTOMOTIVE, HEAVY-DUTY TRANSPORT, MINING, POWER GENERATION, CONSTRUCTION AND GENERAL MANUFACTURING SECTORS LEADING BRANDS INCLUDE SHELL HELIX, SHELL RIMULA, PENNZOIL, QUAKER STATE AND SHELL TELLUS SHELL LUBRICANTS FILLS OVER 2MN BOTTLES A DAY AND UNDERTAKES 30 MILLION DELIVERIES A YEAR TO DIRECT CUSTOMERS AND DISTRIBUTORS. SHELL HAS 40 LUBE OIL BLENDING PLANTS, FIVE BASE OIL MANUFACTURING PLANTS, AS WELL AS 10 GREASE MANUFACTURING PLANTS PARTNERING WITH CONSULTING FIRM, SMARTCHAIN LLP, ENABLED SHELL TO SIMULATE 12 MONTHS OF REAL DATA TO LOOK AT HOW THINGS RAN DURING THIS PERIOD, AND THEN SIMULATE WHAT WOULD HAPPEN WITH A DEMAND DRIVEN METHODOLOGY
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the implementation,” he says. “If you can take out the firefighting, and the noise within the business – the expediting, changing schedules, etc. – then the day in the life of the supply chain individual will feel quite different when this is fully implemented.” Demand-driven planning will be a distinct game changer for Shell Lubricants, and enable the business to better serve its customers, with a higher stock availability and a lower working capital commitment. “If you think about a change programme, this is changing the planning in 15 time zones around the world, as well as the different depots and planning locations. With the first implementation in October 2017, we will be finishing the bulk of the implementation in 2019 with just a couple spanning over into 2020. “Shell Lubricants is an enormous supply chain, and I think this will provide a huge competitive advantage for Shell,” concludes Lynch. “Once one major player has moved over to this, more and more companies will be forced to take a good look at their planning processes and consider whether to move away from 20+ years of forecast driven MRP and the industry that exists around that. “It’s a significant investment and a bold move, but the returns are very attractive for all.”
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ENERGY 4.0
ENERGY 4.0 ACCORDING TO THE Carbon Trust, a 20% cut in energy costs represents the same profit savings as a 5% increase in sales for retailers. Given the numerous challenges facing UK high streets, such as the shift to online shopping, high retail rents and declining consumer spending, retailers that address their energy consumption and seek better deals from energy suppliers have a golden safeguarding opportunity to boost their bottom line. In doing so, they’d be following the lead of the UK’s largest privatelyowned clothing retailer, Arcadia. The retail giant, which has in excess of 2,500 UK outlets, has brought its energy procurement in-house over the past few years and, most recently, switched from a fixed to flexible contract for its gas supply. Energy Digital spoke to Dean Laurent, Arcadia’s Purchasing Controller, Sustainable Energy Management, to see how its shifting approach has given the owner of eight fashion brands, including Topshop and Miss Selfridge, greater control and understanding of how its resources are being used. Laurent, who previously worked for 28
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Debenhams and Selfridges, runs five teams and manages a circa £200mn ($266mn) spend. As the person responsible for the operational side of Arcadia’s procurement, he has seen his role develop extensively since joining the company and been instrumental in bringing about significant change in the company’s approach to both procurement and energy management. “When I first started 11 years ago,
purchasing was based out of Leeds [it’s now in London] and there were about eight or nine of us looking after procurement. We weren’t as fully involved in all of the areas as we are now. Packaging, for instance, didn’t sit under our remit and though print purchasing was an element of procurement, it was managed in isolation whereas we brought it into a centralised function,” he explains. “Over the past few years we have
pulled the more commercial aspects of the business into our team, enabling us to have wider control over the spend in multiple areas across the business. We have around 48 people working within procurement now, so it’s grown massively,” he continues. Energy and utilities is an area of particular importance to Laurent, who says he initially started looking after this about nine years ago and quickly found Arcadia had a large number 29
ENERGY 4.0 of outsourced functions around energy, utilities and procurement. Discussing how Arcadia’s relationship with energy suppliers began to evolve, he reveals: “A lot of the utilities companies like Gazprom Energy, British Gas and EDF were starting to come and talk to us directly, and so I engaged with them. They were very open and honest, saying that they wouldn’t necessarily give a broker a better deal. “I took it upon myself to train and align myself to a number of brokers quite quickly, and to understand the nuances of the industry and procurement. I realised we could do a lot of it ourselves and gas was the first one we brokered directly on our own. We were already with Gazprom so it was like a renewal and we ran it within our own company.” Laurent found that he was getting the same offering as when using a broker, but that working more closely with Gazprom Energy allowed greater flexibility and opportunity to negotiate. “The creation of our energy and utilities department all stemmed from me having those initial conversations with a lot of people and doing that first deal on gas. We realised we 30
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could do this in-house if we had the right skillset, so I put a business plan together, got HR to agree it, and got my CEO and directors on board. And that’s how we came to start engaging directly with utilities companies,” he reflects. Having built the energy and utilities team, which now comprises five people, and spending several years bringing the company’s energy procurement in-house, Laurent set his sights on a new objective that represented another significant change for Arcadia. “We were a business that was very risk-averse and liked certainty, but I realised we were missing an opportunity to take advantage of some better pricing, where the market might dip,” he explains. “I was championing a move from fixed to flex for a number of years – it just took me a while to convince various people, including our finance director, finance controller, CEO, property director and my procurement director, to move onto a flex deal.” Late last year, his tenacity paid off with Arcadia signing a flexible contract with Gazprom Energy for the supply and management of gas to 73 stores,
“We were a business that was very risk-averse and liked certainty, but I realised we were missing an opportunity to take advantage of some better pricing, where the market might dip� - D E A N L A U R E N T, PU RC H ASIN G CO N TR O L L E R, SU STAIN ABLE ENE R G Y M A NAGE ME N T, ARC ADI A
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offering the company a chance to make the most of low current and future energy prices should they occur. The deal marks Arcadia’s first use of flexible gas buying as part of its revised energy strategy and has since been extended to cover 280 sites across the entire Arcadia portfolio. Echoing the first time Arcadia brokered a deal independently, without using brokers or consultants, the first move from fixed to flex was with gas. “Gas was very much one of our learning curves,” Laurent remarks. Speaking candidly about whether the change was worth the risk, Laurent says: “It has worked out so far. There 32
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would be a spike and it could hit us but our business has learnt over the years, since working on flexible deals, that you take advantage of the lows and get caught sometimes by the highs, but overall we have done very well in our procurement strategy of gas.” While delivering as he hoped it would, Laurent cites the uncertainty of a flex deal as a challenge, explaining: “We have learnt over the years that it’s not simple – it’s almost on a geopolitical basis that you now have to look at what you by, how you buy and what impacts the market. We have learnt about the drivers for the market, and the importance of having the
ENERGY 4.0 strategy in place, working to that and being flexible to change your strategy.” As part of the contract, Arcadia has access to Gazprom Energy’s recently launched energy management tool InSight. The platform accesses live market prices and information and makes alerts available to its major energy customers – like Arcadia – and energy consultant partners, which can help reduce energy purchasing costs through a more strategic and agile process. Giving Laurent and his team this monitoring ability ensures Arcadia is getting the best possible deal, he explains, adding that obtaining consumption data is also critical when running an energy management team. “It’s important to us to have live access to our data, especially as we have such a large portfolio of stores. We also run our own energy management database, which mainly looks after all of our electrics, and work with a broker/consultant on a similar system for water, so having this for gas too has been brilliant; it’s allowed us to pull data, scrutinise data, assess and measure our consumption profiles, and run lots of analytics. If we see we’re using a lot of gas or
electricity in a certain location, for example, we can contact the relevant management team to discuss it.” InSight also plays a role in Arcadia’s CSR reporting and internal campaign to raise employees’ awareness about how everyone can impact energy consumption. “One of our key goals we’re striving towards is reducing our energy consumption by 3% year-on-year. That’s quite substantial when consumption is the size of ours,” he says. Revising Arcadia’s energy strategy has clearly been a pivotal career milestone for Laurent and he describes it as his “biggest learning curve and test” during his time at the retail giant. “I started life at the company procuring various contracts and the standard mundane types of products most procurement people buy, so buying something quite different and having the opportunity to start a new team and bring something in-house that had been fully outsourced, and actually see the success of this, is one of the biggest things I’ve done. I never expected to start buying utilities within Arcadia,” he shares. 33
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“ We recently worked with BizClik Media on an article which characterizes and explains the total value that Kudu Supply Chain has on company growth plans. From start to the finish, it was a pleasure working with the BizClik team. The feedback we have received from different audience groups on the article was phenomenal. It has attracted a lot of interest and attention to our company, our growth plans and has definitely created additional value to what we are trying to achieve.”
– Murat Ungun, Senior VP Supply Chain Kudu Corp
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SMART CITIES
POWERING OUR FUTURE - DIGITAL DISRUPTION IN THE ENERGY INDUSTRY TO EXPLORE THE DIFFUSION OF DISRUPTIVE IDEAS, ROBOTICS AND BLOCKCHAIN WITHIN THE ENERGY SECTOR, ENERGY DIGITAL INTERVIEWED REPRESENTATIVES OF SOME OF THE INDUSTRY LEADERS IN EACH OF THESE SUB-SECTORS Written by KIERON BAIN
SMART CITIES DIGITAL DISRUPTION HAS transcended our culture to a level nothing short of ubiquitous. Integration is becoming standardised across our information management technologies, acting as a herald for changes to our industries as a whole. Transitions within the energy industry always challenge conventional views and entrenched modes of operation, presenting both the opportunity to evolve whilst trying to simultaneously manage the environmental implications of widespread decommissioning and even the failure of previous technologies to attain the projected levels of return on investment. How is the industry shaking hands with emergent technologies? To explore the diffusion of disruptive ideas, robotics and blockchain within the energy sector, we interviewed representatives of some of the industry leaders in each of these sub-sectors, providing an intriguing picture of both the pathways and obstacles that could shape its journey over the coming decade. A holistic view – Tim Shire, KBC Increasingly software is now playing 38
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“TECHNOLOGIES LIKE BIG DATA, THE CLOUD, IOT AND ARTIFICIAL INTELLIGENCE ARE NOT JUST CHANGING THE BUSINESS, BUT ALSO RE-WRITING THE JOB DESCRIPTION OF THE NEXT GENERATION OF ENGINEERS” - TIM SHIRE, VP NEW SOLUTION STRATEGY AND LAUNCH, KBC a leading role in technological developments, surpassing the impact hardware and new physical evolutions played out across industries on a holistic scale. One leader in this sector is KBC Advanced Technologies. They have supported the energy and chemical industries since 1979 across 23 global locations. We approached Tim Shire, VP New Solution Strategy and Launch to gain an understanding of the complex relationship between digital disruption and this sector’s requirements.
How do you believe digital products and technologies have shaped the energy industry over the previous five years? What has been the most significant application of tech in your opinion? Digitalisation is starting to make inroads into the energy industry in many ways. Technologies like big data, the cloud, IoT and artificial intelligence are not just changing the business, but also re-writing the job description of the next generation of engineers. Â Of all these technologies, the
cloud has seen the most widespread adoption in the upstream oil and gas industry due to the large number of asset owners and operators who need to collaborate in complex fields. The resulting connectivity is really changing the way business is done, and enabling operators to do more with less, even in remote locations, with few frontline staff. Big data analytics is perceived by the industry to be the most valuable application of technology, however in practice we see that analytics has been limited to pockets of success and has not yet met its full potential. 39
SMART CITIES What has been the wider impact to the environment of digital implementation within the energy industry? How is the sector working to remove outdated and environmentally detrimental processes? There is huge potential for digitalisation to ease the industry’s impact on the environment, but the realisation of that potential has so far been limited. However, we are now seeing significant C-Suite commitment to reducing carbon emissions – from Shell and Chevron for example – so we expect to see a wave of digital adoption. We’ve found that digital solutions offer a much higher ROI than physical hardware in terms of carbon savings. By having the right digital strategy in place, a 3-10% saving on energy and carbon emissions is possible with a payback time of less than a year.
“THE ENERGY INDUSTRY HASN’T ALWAYS BEEN AT THE FOREFRONT OF DIGITAL IMPLEMENTATION – WE CAN LEARN FROM INDUSTRIES SUCH AS AUTOMOTIVE AND ENGINEERING” - MANON HIGGINS-BOS, STRATEGIC DEVELOPMENT MANAGER, NATIONAL NUCLEAR CORPORATION 40
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How is KBC garnering current and emergent technologies right now to make an impact into the way that energy is both generated and consumed on either local or global stages? KBC very much sees combining an ensemble of current and emergent technologies, along with human expertise, as considerably more effective than trying to replace current technologies or people with new technology. In the field of energy and sustainability, KBC has developed a fully comprehensive suite of energy management software and analytics, simultaneously covering both energy supply optimisation and energy demand minimisation. However, class leading tools need to be well maintained and require a level of expertise to fully exploit. Consequently, we have started leveraging the cloud to deliver our Energy and Sustainability Co-Pilot service. Streaming data to the cloud enables us to remotely assure the performance of the tools and provide proactive support and capability transfer from our expert consultants, in order to relentlessly improve all aspects 41
SMART CITIES of energy and carbon management. Automation in the nuclear industry – Manon Higgins-Bos, National Nuclear Industry Nuclear power has played an increasing role in the generation of energy in the West. In the UK the National Nuclear Laboratory occupies an instrumental role in helping the country’s industry deal with decommissioning and waste. We approached Manon Higgins-Bos, Strategic Development Manager, to discuss how automation is starting to inform serious change. What do you believe are the greatest challenges to digital implementation in the energy industry? How can we work to overcome these barriers? The energy industry hasn’t always been at the forefront of digital implementation – we can learn from industries such as automotive and engineering. Working collaboratively is one area that is challenging, but also a huge opportunity. Energy projects often involve many different parties and even though the intention to share knowledge is always there, 42
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it doesn’t always happen. This can be a particularly true in the nuclear sector, where a plant’s lifetime is more than a century, spanning several generations of employees. A key aspect is the decision-making process and looking at what point in the journey the plan to collaborate starts. For example, at NNL, we may work on a decommissioning programme where we will have strict timescales for the removal of waste. Sometimes materials may need to be tested for radioactive levels at the laboratory and pulling together that information, including waiting for results and feedback, can be a time-consuming process. Linking digital tools is one way to streamline this process, helping to get a clearer idea of timescales and remove any cost uncertainties. What do you believe is the most important emergent technology within the industry and how could this potentially change the world for all of us? The role of robotics within decommissioning projects is important and we are learning from the way they’re being deployed at legacy facilities where radiation levels
prevent manual access. Currently, decommissioning projects are the prime focus for robotics, with remote communication broadening the possibilities. Robots can be instructed across different sites and their ability to improve productivity and adapt to changing conditions can also be utilised in the build of new power stations. How do you believe that the nuclear industry can be aided by digital processes and technology? Which of this sector do you believe will change the most over the coming years? And how? Information management tools such as 3D CAD technology have massive potential for the nuclear industry. While an architect may be interested in precision drawings to provide a visual of the finished product, it’s the ability to share related data at different stages of development projects, through design, regulatory assessment, construction, operation and decommissioning, which holds the greatest value for the nuclear industry. 43
SMART CITIES
“THE BIG ENERGY COMPANIES APPEAR TO CONTINUALLY TAKE THEIR CUSTOMERS FOR GRANTED, HITTING THEM WITH PRICE HIKE AFTER PRICE HIKE. THEY WILL BE REPLACED IF THEY FAIL TO ADAPT THEIR BUSINESS MODELS” - OMAR RAHIM AND LORD REDESDALE, ENERGI MINE
Blockchain and energy – Omar Rahim and Lord Redesdale, Energi Mine The Bitcoin explosion in 2017 only alerted us to the emergent technology of blockchain. We are perhaps only now touching upon the possibilities of tokenised relationships. One company keen to exploit these opportunities is Energi Mine, which raised $15mn in under 81 minutes for its new token. We approached the CEO Omar Rahim, an industry player with 12 years’ experience leading in the gas industry, and Lord Redesdale, ex-Head of Energy in the House of Lords, to explore how blockchain could change the business. What do you believe to be the most important emergent digital products within the energy market? What impact do you think this will have on current businesses within the sector? Undoubtedly the emergence of blockchain. It is an immutable ledger for transparent record-keeping. Individuals will be able to trade energy securely in a peer-to-peer ecosystem. Power will be seized from the hands of the big six energy companies as blockchain will enable this to be transferred over to
SMART CITIES consumers. Therefore, consumers will be able to demand cleaner and cheaper energy – ultimately this creates more transparency in the system. This is a breath of fresh air in a notoriously opaque industry, quite resistant to new digital technologies like automation, which should have had a transformative impact years ago. How do you believe the industry will change over the next five years? If we look into the future, what do you think will be the most significant development as a result of digital disruption in the industry? The big energy companies appear to continually take their customers for granted, hitting them with price hike after price hike. They will be replaced if they fail to adapt their business models. We predict that one of these will become the new Nokia. People are making their own energy; however, they currently have no way to distribute it beyond selling it back to the big companies. The future is peer-to-peer and embracing new technological innovations such as blockchain will be paramount.
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In an ideal world, where would Energi Mine like to guide the industry over the coming decade? How could this potentially benefit the global community? Renewable energy is trending to become the main source of power. We can no longer go on burning fossil fuels and polluting our environment. Every person has the power to make a difference to their carbon footprint. Energi Mine is at the forefront of this shift. In a decade, we predict that Energi Mine will be the platform that energy providers operate through around the world. We hope our blockchain based token, the EnergiToken, will be key in the promotion of energy saving behaviour. This can encourage people to be more efficient and less reckless in their energy consumption. Energi Mine intends to become an integral part of the fabric of the energy market, driving these changes forward. If and when the larger energy companies finally catch up, they will be forced to adapt to a business model that prioritises transparency over profit.
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Hydrogen The new ele While hydrogen infrastructure might be lacking at the moment, there are big plans in place to expand the network of refueling stations to drive this zero-emission fuel forward Written by JESS SHANAHAN
ectric?
S U S TA I N A B I L I T Y HYDROGEN FUEL CELL electric vehicles (FCEVs) have been touted as an alternative to electric vehicles (EVs) for a number of years. Not only are they just as environmentally friendly, perhaps even more so, but they take away the need for lengthy charges and most have a range of around 300 miles. There are two things currently holding back the rapid adoption of FCEVs however. The first is infrastructure. While there are plenty of plans to roll out new refueling stations for hydrogen vehicles, the infrastructure still doesn’t allow for widespread use of this fuel. In March this year, ITM Power, Shell, Toyota, Honda and Hyundai formed a consortium and won £8.8mn ($11.86mn) in funding from the Department for Transport to improve access to an expanded network of hydrogen refueling stations in the UK. At the moment, however, it’s Scandinavia and Germany leading the charge for the roll out of FCEVs. The second barrier to full-scale adoption of these cars is cost. Hydrogen is sold in kilograms rather than volume and current prices are approximately £10 to £15 ($13.50 52
June 2018
‘At the moment, hydrogen FCEVs have much higher per-mile costs than EVs or internal combustion engine cars’
to $20) per kg. An average FCEV tank holds around 5kg, so a full hydrogen refill would cost between £50 and £75 ($67 and $101). At the moment, hydrogen FCEVs have much higher per-mile costs than EVs or internal combustion engine cars. For consumers, there’s very little choice available when it comes to cars, but plenty of manufacturers are working on their own FCEV. The Toyota Mirai and the Hyundai ix35 Fuel Cell are the two most popular models and it’s expected that
Honda’s Clarity Fuel Cell car will join them later this year. BMW, Audi, and Mercedes Benz are just some of the manufacturers developing hydrogen fuel cell models, so the market is set to expand over the course of the next few years. Currently, a more popular use for FCEVs is in the commercial markets. Many police cars, taxis and buses already run on the fuel in cities where there’s already a decent private infrastructure. Three fleets of 60 hydrogen vehicles will be deployed in 53
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London, Paris and Brussels as part of the Zero Emission Fleet vehicles for European Roll-out (ZEFER) project. The €26mn ($31mn) European initiative will introduce 180 FCEVs into a combination of taxi, private-hire and police fleets. Ben Madden, director at Element Energy told Fleet News: “We are delighted to be leading this major project which will demonstrate commercially viable use cases for hydrogen-fueled vehicles in high mileage urban fleets. 54
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“The increasingly widespread hydrogen infrastructure network in leading European cities as well as new FCEV models from manufacturers are beginning to drive real market adoption. “We are excited to see first largescale users starting to take up the technology in large fleets to do the day to day work of vehicles which operate in urban centres.” The first 25 cars have been deployed in London by Green Tomato Cars, with another 25
due to be delivered in September. These vehicles will offer the same service as current premium taxi services and will be allocated to standard bookings across London and the Home Counties. Also, in London, the Metropolitan police are using Toyotal Mirai hydrogen cars and trialing hydrogen scooters. In a city where there’s already a decent hydrogen refueling infrastructure, this makes sense. Many cities are also testing hydrogen buses. Last year,
another European project rolled out 144 hydrogen buses and seven new refuellng stations. The future looks bright for hydrogen vehicles with many countries offering grants and subsidies to help improve the infrastructure. In Kia and Hyundai’s native South Korea, the government offers subsidies to filling station operators to add hydrogen facilities. The goal is to have 310 stations across the country by 2022. More than 45 stations are planned across Europe as part of the H2ME Project by 2020 with a number of those already active, while over in the USA, it’s California that’s leading the way with 35 of the country’s 39 public refueling stations. The pioneering state also has another 29 planned. Despite the limited infrastructure, the Hydrogen Council has an optimistic view for the long-term, saying there could be around 10 to 15mn hydrogen-powered cars and 500,000 trucks by 2030 and by 2050 that number could grow to 400mn hydrogen cars and 15 to 20mn trucks. There’s no doubt there’s a long way to go for FCEVs, but 10 years ago, we were saying the same about electric vehicles. 55
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Leading the charge for electrification within logistics Written by JESS SHANAHAN
T R A N S P O R TAT I O N
With a number of big players within the automotive and logistics industries selling and trialling electric trucks of varying sizes, we’re at a turning point for the electrification of this competitive market
T R A N S P O R TAT I O N IN 2013, DHL made the commitment to move to all-electric powertrains but found that there just wasn’t a truck out there that could do the job. The logistics giant decided to make its own with the help of StreetScooter, a Germany university startup. Since DHL started working on its own eTruck, other manufacturers have joined the push to bring electric vehicles to the logistics market. Tesla, Volvo, Mercedes and many other manufacturers have since unveiled eTrucks of varying sizes. Recent research from McKinsey’s Energy Insights report suggests that eTrucks could account for 15% of global truck sales by 2030, but it’s urban light-duty trucks that will be the most popular, reaching sales as high as 25-35% in China and Europe. FUSO eCanter
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The light-duty trucks will have a loaded weight of 7.5 tonnes and a range of around 100km, and while this payload and range might not be suitable for long-haul logistics, it’s perfect for deliveries within a city. FUSO Trucks, part of the Daimler family, has already launched the eCanter light-duty truck, which sits nicely alongside the Eco Hybrid version – which has already seen customers saving up to 23% on fuel. At the launch of this new eTruck, Mike Belk, Managing Director of MercedesBenz & FUSO Trucks UK said: “Fully electric trucks are no longer science fiction – we at Daimler are already manufacturing them and now we’re putting them into operation with wellknown customers. We’re pleased to build on our relationships with DPD,
‘Recent research from McKinsey’s Energy Insights report suggests that eTrucks could account for 15% of global truck sales by 2030’
Hovis and Wincanton in this way, as they clearly believe the FUSO eCanter is a viable proposition for their urban distribution business.” Many other manufacturers are focusing their efforts on bringing small, efficient electric trucks to market. Recently, Volvo announced a 16-tonne electric truck called the FL Electric, with a range of 300km. Claes Nilsson, President of Volvo Trucks, commented on the announcement: “We’re immensely proud to present
the first in a range of fully electricallypowered Volvo trucks ready for regular traffic. With this model we are making it possible for cities that aim for sustainable urban development to benefit from the advantages of electrified truck transports.” While the purpose of this truck is still to serve urban areas, its weight limit and range make it very flexible. Volvo says that the truck will be primarily used for urban distribution and refuse operations. 61
Mercedes-Benz eActros 62
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T R A N S P O R TAT I O N It’s still the big rigs that are making the headlines, though, with Tesla and Mercedes both making huge leaps with their HGV projects. The Mercedes-Benz eActros is a heavyduty vehicle with gross weights of 18 or 25 tonnes. The company has already launched an innovation fleet of 10 vehicles to select customers to test the concept. Each of these will have a range of 200km, which is more than suitable for inner-city deliveries. It’s Tesla, however, that’s been picking up the lion’s share of coverage with the Tesla Semi, which is expected to go into production in 2019. This heavy-duty electric vehicle will have a range of around 800km and will serve the wider logistics market. Tesla says the Semi will achieve 0-60mph in 20 seconds when pulling 36 tonnes, the maximum allowed on US roads. Tesla recently revealed the pricing for these electric trucks, with the 300mile (482km) and 500-mile (804km) range versions coming in at $150,000 and $180,000 respectively. The company is also listing a ‘Founders Series’ version for $200,000. The costs of battery technology are dropping and Tesla is confident that its electric semi truck will work
Volvo FL
‘ Recently, Volvo announced a 16-tonne electric truck called the FL Electric, with a range of 300km’ 63
T R A N S P O R TAT I O N
out cheaper than a diesel equivalent when fuel costs and maintenance are taken into consideration. When Tesla unveiled its big rig, it stated that companies could recoup the cost of the vehicle in two years thanks to savings on fuel alone. Already, Tesla is taking large orders for these trucks with eager customers such as FedEx, UPS, TCI Transportation and Anheuser-Busch – the brewer behind Budweiser – jumping on the electric bandwagon. 64
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There’s no doubt that electric is going to play a big part in the future of logistics, but it’s the early adopters that have already placed orders that will benefit the most. According to the McKinsey Energy Insights report, the supply of eTrucks and the charging infrastructure are unlikely to match demand in the short term. The report states: “The supply of trucks themselves will likely be a bottleneck for freight transport electrification in the next few years. This will
‘ This is something Telsa is once again championing with trials of its mega charger, which will give the Tesla Semi a range of 600km after just 30 minutes of charging’
change as new models are launched and production comes online. “We expect that early adopters will mainly charge their fleet overnight at their own depots or warehouses. Thus, they will not be dependent on public infrastructure. The inability to charge while on the road means battery size needs to match daily range, which pushes vehicle cost up. However, once eTrucks become more mainstream, we expect the roll-out of supercharging infrastructure at distribution centers and along the main highways, enabling long-haul ‘refueling’ along popular routes.” This is something Telsa is once again championing with trials of its mega charger, which will give the Tesla Semi a range of 600km after just 30 minutes of charging. Adoption of electric trucks is all about practicality, cost and efficiency, unlike the consumer market where many drivers have strong feelings about internal combustion engine cars. While the consumer market will continue to grow as range improves and costs comes down, it’s likely the commercial market will grow more rapidly without this emotional connection.
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TOP 10
Solar is anticipated to become the largest source of low-carbon capacity by 2040 – total renewable power generation is anticipated at 40% and 80% is how much renewables contribute to new capacity in the European Union. Here are the top 10 greenest utility firms as ranked in the EI New Energy Top 100 Writ ten by OLIVIA MINNOCK
T O P 10
CHINA THREE GORGES CORPORATION
Website: www.ctgpc.com Ranked in the 10th position, the China Three Gorges Corporation has a capacity of 69 GW and a remarkable history. From 1918, when the idea of the dam was first postulated by Sun Yat-Sen, to 2014, where the project showcased its ability to deliver exceptional flood control, it has achieved impressive milestones and results. In addition to its green credentials, the dam mitigates flood threats and the devastation of plagues caused by massive flooding in the region.
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09 ENEL
Website: www.enel.com Enel has achieved a nod in the list thanks to its recognition by the Global Electricity Utilities in Transition Report by the Institute for Energy Economics and Financial Analysis, as well as ranking 9th in the EI New Energy Top 100. The company has been in play for more than 50 years and is focused on becoming the world’s largest producer of renewable energy.
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CHINA GUODIAN CORPORATION
Website: www.cgdc.com.cn This megalithic energy producer started in 2002 and is today one of the five largest producers of power in China. The EI New Energy report places them in eighth spot with a capacity of 143 GW and rated the firm as the one with the ‘highest renewable capacity’.
08
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07 INVENERGY
Website: http://nvenergyllc.com Invenergy is a United States-based organisation with a capacity of 5.8 GW and the largest independent, privately owned renewable energy provider in the country. The company has clean energy facilities located around the world and is committed to transforming the energy industry ‘from within’.
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ENERGIAS DE PORTUGAL (EDP)
Website: www.edp.com Energias de Portugal (EDP) has a ranked capacity of 25.2GW according to the EI survey and a corporate vision that’s somewhat spectacular. The company has publicly committed to invest 12mn in universal access to sustainable energy, which will not only make a significant difference to the challenges facing the energy market, but to people living in developing countries.
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05 E.ON
Website: www.eon.com Possibly one of the most well-known renewable and green energy providers in the world, E.On is the German company with an impressive global footprint. E.On is committed to ensuring that power comes from sustainable sources such as wind and solar energy and to support customers as they move towards the integration of green power solutions. 75
T O P 10
IBERDROLA
Website: www.iberdrola.com In fourth position, Iberdrola takes a strong spot in the top five for its commitment to green energy and renewable energy sources. One of the largest electricity companies in the world, the group has been paying attention to the need to go green and clean and has reduced its own emissions in Europe by 75% since 2000..
04
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03 CHINA GENERAL NUCLEAR (CGN)
Website: http://en.cgnpc.com.cn Yet another China-based company leads the way in clean energy – China General Nuclear has a mission to develop clean energy and a footprint that spans several continents. The organisation started in 1978 as the Daya Bay Nuclear Power Plant in China and recently changed its name to as it moved towards a more sustainable and integrated future. 77
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NEXTERA
Website: www.nexteraenergy.com NextEra is ranked in the lead as utilities that are doing the best job of shifting from fossil fuels to renewables. It’s a noteworthy accolade as many incumbents have been reluctant to leave the traditional fossil fuel realm for one that’s lit by the sun and powered by the wind.
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01 ACCONIA
Website: www.acciona.com Taking the lead is Acconia, a Spanish company with a mission to become the first global energy operator that’s exclusively focused on renewable energy. The company’s history spans more than 80 years and it has a presence in more than 40 countries worldwide. Acconia follows a Sustainability Master Plan that provides the company with a roadmap towards a more sustainable, low-carbon economy and a greener future. 79
E V E N T S & A S S O C I AT I O N S
Events The biggest and best events and conferences from around the world‌ Writ te n by AN D R E W WOO DS
E V E N T S & A S S O C I AT I O N S ASEAN Sustainable Energy Week (ASE) BITEC, Bangkok, Thailand 6-9 June This massive show expects 27,000 visitors, over 1,500 brands and over 80 seminars tackling renewable energy sources and the latest technology in this area. Wind and solar power are among the many systems and programmes featured and discussed along with thermal and waste-to-energy, hydro-powered programs, bio-mass and other green technology. Renewable energy and energy efficiency clinics staffed by experts are also conducted at the show. www.renewableenergy-asia.com
Intersolar Europe 2018 Messe München, Munich, Germany 20-22 June Intersolar Europe is the world’s leading exhibition for the solar industry and its partners and takes place annually at the Messe München exhibition center in Munich, Germany. The event’s exhi bition and conference both focus on the areas of photovoltaics, solar thermal technologies, solar plants, as well as grid infrastructure and solutions for the integration of renewable energy. Since being founded 26 years ago, Intersolar has become the most important industry platform for manufacturers, suppliers, distributors, service providers and partners of the solar industry. www.intersolar.de
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Ees North America 2018 Moscone Center, San Francisco, CA, USA 10-12 July Celebrating its 10th anniversary, Ees will welcome hundreds of 530 exhibitors and 15,000-plus trade visitors. The conference features 40 sessions and 25 workshops with more than 200 speakers. With over 20 years of experience, Ees brings together members of the solar industry from across the world’s most influential markets. Ees exhibitions and conferences are also held in Munich, San Francisco, Mumbai, Beijing and São Paulo. www.ees-northamerica.com
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E V E N T S & A S S O C I AT I O N S POWER-GEN & DistribuTECH Africa Sandton Convention Centre, Johannesburg, South Africa 17-19 July Co With 3,000 attendees, 100-plus speakers and 70-plus exhibitors, POWER-GEN is Africa’s premier electricity industry forum that brings together international business leaders and technical experts committed to powering up a continent. www.powergenafrica.com
Intersolar South America 2018 Expo Center Norte, São Paulo, Brazil 28-30 August With 11,500-plus visitors, 1,500-plus conference attendees and 180 exhibitors, Intersolar has become the most important platform for manufacturers, suppliers, distributors, service providers, investors and partners of the solar industry. Intersolar South America takes place at the Expo Center Norte in São Paulo, Brazil, and has a focus on the areas of photovoltaics, PV production technologies, energy storage and solar thermal technologies. www.intersolar.net.br
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Offshore Wind Executive Summit Norris Conference Centers, Texas, USA 13-14 September Bringing together decision makers from wind and offshore oil and gas, both from the US and Europe, the Offshore Wind Executive Summit provides the forum to establish new business relationships. Discussion points include project development, important policy issues and supply chain. www.offshorewindsummit.com
Asia Power Week ICE, Jakarta, Indonesia 18-20 September 2016 saw Asia Power Week take place outside of the ASEAN region, and also for the first time in South Korea, at KINTEX, Gyeonggi-do. For the second year in succession event attendance records were broken, with over 8,300 delegates and visitors attending the three co-located events. The event attendance record was then further broken in 2017 in Thailand, for the ninth staging in Bangkok. This year, for the first time Asia Power Week will take place in Indonesia at ICE, in BSD City, Jakarta. www.asiapowerweek.com
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E V E N T S & A S S O C I AT I O N S Asia Power Week ICE, Jakarta, Indonesia 18-20 September 2016 saw Asia Power Week take place outside of the ASEAN region, and also for the first time in South Korea, at KINTEX, Gyeonggi-do. For the second year in succession event attendance records were broken, with over 8,300 delegates and visitors attending the three co-located events. The event attendance record was then further broken in 2017 in Thailand, for the ninth staging in Bangkok. This year, for the first time Asia Power Week will take place in Indonesia at ICE, in BSD City, Jakarta. www.asiapowerweek.com
World Congress on Oil, Gas and Petroleum Refinery Radisson Blu Hotel, Abu Dhabi, UAE 27-28 September Conference Series LLC welcomes you to attend the “World Congress on Oil, Gas and Petroleum Refinery” in September at Abu Dhabi, UAE. The event invites all the interested participants to sharing their knowledge, research and gaining the information in the arena of oil, gas, petroleum and its allied areas. Petroleum Refinery 2018 gives a platform for analyst scholars, researchers and academic people to share and globalise their research work while the participants from industry/business sectors can promote their products thus felicitating dissemination of knowledge. www.petroleumrefinery.conferenceseries.com
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Intersolar India Bombay Exhibition Centre, Mumbai 11-15 December With events spanning four continents, Intersolar is the world’s leading exhibition for the solar industry and its partners. ‘Our objective is to increase the share of solar power in the energy supply. By providing first-rate services, our exhibitions and international conferences bring businesses, technologies and people from the most important markets around the globe together. We have 25 years of experiences in opening up markets, providing specialist knowledge and creating links.’ www.intersolar.in
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CHAMPIONING SMART TECHNOLOGY
in the ENERGY SECTOR Hugo Bailon, CIO at Orazul Energy, explains the goals and key points of the digital transformation that is changing the future of the company Written by MarĂa Cobano-Conde Produced by Ana Macfarland
ORAZUL ENERGY
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atin America is one of the global regions with highest energy production growth, where the industry is solid and has an important development horizon. Orazul Energy is a leading company in the generation of electricity, which in Peru carries out its activities through its two hydroelectric plants and a thermal power plant, taking care of the environment and the communities where it operates. Business Chief had the pleasure of speaking with Hugo Bailon, Chief Information Officer of Orazul Energy, on how technology is improving the company’s operations and the strategies that are being carried out for the digital transformation of the company. The energy industry – a dynamic sector Bailon has developed his extensive professional career in the oil and energy sectors, attracted by the dynamism and the combination of operations in the field with
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activities regarding the natural resources offered by the industry. He started working for Orazul Energy 14 years ago, a time in which he has developed a successful career path as IT Manager and finally as Chief Information Officer. He has contributed with his experience and expertise in the application of technology to the management of administrative and operational processes of the company in the region. Orazul Energy is a company by and for Latin America, as Bailón explains: “The challenge in IT is to adapt to a corporate strategic framework, but at the same time to tune in with the local reality of each country. Operating as a region helps us to efficiently take advantage of synergies and, for example, to have access to solutions that a country alone cannot independently afford. Likewise, standardising technologies in a regional manner allows us to negotiate with suppliers from a more solid and attractive position.” To carry out this regional strategy,
L AT I N A M E R I C A
“SOMETIMES YOU HAVE TO QUESTION IF THE BUSINESS STRATEGY IS CORRECT” – Hugo Bailón, CIO from Orazul Energy
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ORAZUL ENERGY
technology is fundamental when it comes to execution to be more innovative, efficient and intelligent. Orazul is mainly a generator of electricity, although it also participates in its transmission. Particularly in the case of Peru, it has hydrocarbon operations through the exploitation of a natural gas field and the transportation of that gas, together with its processing in a fractionation plant that produces domestic gas for the end user. The energy sector is very dynamic by nature, since energy is produced and consumed in real time. Orazul produces hydroelectric power in two hydroelectric plants, as well as thermoelectric energy generated in a thermal power plant which consumes its 52.5 MMcfd of natural gas. More than 400km of transmission lines and 200km of gas pipelines complement these operations. To handle this great complexity and extension of operations, technology is fundamental to make all the components and variables of the process work in the most synchronised and efficient way possible.
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Orazul Energy Where does the electricity come from?
L AT I N A M E R I C A
Bailon explains that, in the energy industry, concepts such as the internet of things and real-time control systems have been used for many years, but it is recently that this technology is being taken to the business network. The practicality, availability and cost reduction are making technology increasingly integrated into Orazul’s operations and streamlining processes that were previously difficult and expensive: “As an example, before it was difficult to set up a lubrication plant, a hydropower plant or auxiliary services because of the high cost. Today, with the enormous supply and low prices of the internet of things, you can do that. Integrating this information with the information of the main process, it is possible to digitalise the entire environment where the productive process is developed, which allows us to make better decisions in a faster time,� illustrates Bailon.
Carhuaquero Cirato Dam
The journey towards digital transformation Focusing on the digital transformation that Orazul has been experiencing for
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ORAZUL ENERGY HAS A PRESENCE IN SIX COUNTRIES IN LATIN AMERICA:
Argentina
El Salvador
Chile
Ecuador
Guatemala
Perú
a few years, the company bases it on three fundamental aspects: human capital, technology and processes. Orazul sees its employees as the best tool to carry out this transformation successfully, and in this way, it is committed to training and empowering its employees so that they evolve from performing operational tasks to more analytical ones in the processes they control. Bailon illustrates this concept with the example of Orazul’s electricity
production plants and the role of the operators in them: “We must transform the process and also evaluate the capabilities of people. For many of the operational tasks, the smarter systems can take care of that in a more automatic way now. If you give information that is easier to digest, the operator can spend more time analysing what would be their most efficient and profitable operation at that moment.” Both health and safety and
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“THE CHALLENGE IN IT IS TO ADAPT TO A CORPORATE STRATEGIC FRAMEWORK, BUT AT THE SAME TIME TO TUNE IN WITH THE LOCAL REALITY OF EACH COUNTRY” – Hugo Bailón, CIO from Orazul Energy sustainability strategies are aspects that are being benefited in terms of asset management and maintenance processes in the company’s digitalisation. At Orazul, risk assessment, the environment and compliance with and adherence to laws and regulations is of the highest priority since culturally at Orazul, these issues are not
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sacrificed in pursuit of profitability. More specifically, Bailon points to smart grids, self-generation, the increasing capacity of selfmanagement of users and the integration of these factors into the system as agents that will radically change the market. In the same way, he considers the interaction of companies with
Gas Plant
research and innovation centres as well as with start-up projects as an important part of the digitalisation and innovation process. Latin America currently presents a very attractive environment for investments in the energy sector. Orazul in the future Within a period of five years, Bailon sees the company fully integrated into digitalisation with solutions that integrate and automate the entire process, from production to online decision making as well as having all the plants operating via remote control. He points out the management of all information and data received from automated processes as the next challenge to achieve, and to big data, analytics and artificial intelligence as key tools to explore all this information. Orazul is currently exploring pilot programmes to learn and find the right way to implement these solutions. Digitisation has always been on the horizon for the energy industry and, more specifically in Peru, Bailon encourages companies to
ORAZUL ENERGY PRODUCES ELECTRIC POWER IN TWO HYDROELECTRIC PLANTS AND A THERMAL POWER PLANT Aguaytia Thermal Power Plant
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“YOU HAVE TO TRANSFORM THE PROCESS AND ALSO ASSESS THE CAPABILITIES OF PEOPLE” – Hugo Bailón, CIO from Orazul Energy adopt this change as something positive that can boost and incredibly encourage the development of the sector at better costs and with a greater delivery of value. He sees digital transformation as an integrated fact in daily life, which we are all already living though – therefore, it is a trend that companies have to consciously accept and take advantage of in order to improve their experience of their customers and improve the productivity of their employees.
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“Sometimes you have to question if the business strategy is correct. What is happening is that with the access to these technologies the processes are transformed and suddenly other processes appear that did not exist before. Then the strategy must change. That is where those opportunities arise to transform businesses and find space to add more value or transform the business model. This creation of value should benefit not only the company, but also society in general, “Bailon concludes.
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QMAX & TO A
THE JOURNEY
CENTRALISED, OPTIMISED
SUPPLY CHAIN
Through the advent of a centralised supply chain strategy, QMax continues to deliver success for drilling fluids customers in the global oil and gas industry Written by Dale Benton Produced by Denitra Price
QMAX
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s a company that promises to deliver with no excuses, the role of supply chain is crucial for QMax in staying true to its word. But that is what it proudly promises, and in 2015 the company brought in the talented Veronica Brown to oversee the development and continued growth of a market leading supply chain function. With over two decades of global supply chain experience in the oil and gas industry in roles with both Halliburton and BP, Brown brings significant experience of working with international customers in her current role as Vice President of Supply Chain at QMax. “I have been on both sides of the table when it comes to oil and gas,” says Brown. “I have worked as the operator and as the buyer. So, I understand how things work with regards to buying the products. We need to provide the services, but also how these services are then used by the operator, understanding their pain points, and what they are truly looking for in their product.” The supply chain function
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is undergoing a significant transformation in industries all over the world. No longer seen as a separate business function, supply chain is now recognised as a key driver of growth and, in some cases, guiding the strategic direction of a company. This is no different for QMax. Throughout her career, Brown has seen this evolution happen first hand. “This is something where I think QMax is a perfect example. I sit in planning meetings surrounding the future of the company, where we want it to go, what we want it to be, and supply chain is right there in those discussions,” she says. “It is very clear from the CEO to the VPs of Operations and Technology that they need to work closely with supply chain. It has been refreshing, to say the least. Supply chain is part of the discussion from the beginning, and it really enables true collaboration which, in turn, drives the company forward.” As a global supplier of solutions for
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Veronica Brown Vice President, Supply Chain
Veronica Brown holds a BS in Business and a MBA from Bellevue University. She began her oil and gas career in 1994 with Halliburton in Mexico City. Following a twoyear stint in Finance, she moved to a Supply Chain role, and then she was offered a position in the Latin America Region ERP implementation team based in Houston. She then progressed to several management Supply Chain roles within Halliburton before accepting job with BP in 2008. Within BP, she led teams in the Gulf of Mexico Region and as the Global Fluids Category Manager. Early in 2015, Brown joined QMax as Head of Function for Supply Chain.
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“I HAVE WORKED AS THE OPERATOR AND AS THE BUYER. SO, I UNDERSTAND HOW THINGS WORK WITH REGARDS TO BUYING THE PRODUCTS” – Veronica Brown, Vice President, Supply Chain
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Mud plant midland
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drilling needs, waste management, the Middle East, etc. need to order transportation, technical testing products from the US, they contact and analysis services, QMax has our central supply chain team and we always had a logistics arm, but buy the product and ship it to them.” through Brown it has its very first QMax has also implemented a Vice President of Supply Chain. Supply Chain Manager role within Following the acquisition of QMax each country it operates. These by Palladium Equity Partners, LLC managers communicate their local in 2014, the new CEO recognised an needs directly with Brown who, issue across the company, one working with the global team, that saw a siloed way of leverage their global working between supply volumes across the chain and logistics. organisation. This is where Brown One example is a came into play. discount that was Year founded “There was a negotiated with a US logistics department, supplier. Now that a very siloed one, QMax buys directly and there was a with this supplier in representative in every one the US and ships to other of our locations. The problem countries, the whole organization was they never communicated reaps the benefits of the discount. with one another,” says Brown. This is an example of how “So, the decision was made Brown, through her role, has to create a global supply chain an almost real-time view and organisation and this is when my role understanding and of what is was created. One of the changes we happening across the organisation, implemented was to centralise our working with the CEO, operations, supply chain operation. So, when and technology to leverage cost our operations in Mexico, Colombia, savings and enable efficiencies.
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Barite silos midland
In three short years QMax and Brown have come a long way, but no supply chain journey ever truly ends. As noted above, supply chain is a continuously evolving space and so Brown understands that the company must not rest on its laurels and continue adapt to this changing landscape. “Right now, as an organisation we are implementing an ERP system that will provide us with greater visibility not only of what we are buying, but also the contract negotiations surrounding that purchase,”
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she says. “We are negotiating a number of different agreements in different countries, and currently there is no visibility to see what exactly these countries are buying, unless I ask for that information. “Having an ERP system in place will provide us with that visibility, but it will also enable us to have a better understanding of our performance and generate better, more valuable KPIs as an organisation.” An ERP system is but one of the many ways that technology is redefining the supply chain
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QMax - Our Solutions
process, and while QMax currently runs most of this data capture through manual processes, technology will open the door to a more efficient and agile function. “Technology, starting with the ERP system, will enable us to improve our planning and demand planning for a product,” says Brown. “Once that is in place, we can add to that, such as transportation management systems. It will make the supply chain work better. I can have less inventory and be more efficient with planning and giving
forecasts to my suppliers.” With any transformation, particularly one that has been, and will continue to be, defined by technology and changing of process, challenge is inescapable. Brown recognises as much. In building the very foundations of a supply chain network to be more efficient and centralised, Brown knew that the first component required to enable change was the people. “Changing the mindset of people, be it operations or sales, and making them understand that supply chain
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“CHANGING THE MINDSET OF PEOPLE, BE IT OPERATIONS OR SALES, AND MAKING THEM UNDERSTAND THAT SUPPLY CHAIN IS NOT A ROADBLOCK, BUT RATHER ENABLERS FOR THEIR JOBS. THAT WAS A CHALLENGE AT FIRST” – Veronica Brown, Vice President, Supply Chain
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is not a roadblock, but rather enablers for their jobs. That was a challenge at first,” says Brown. “As we work closer together, they can see the benefit much better than before. They understand that just because we are not out in the field with the technologies or products in action, it does not mean we cannot come up with innovative ideas and solutions to help them address their pain points.” As a means of reinforcing this message, Brown promotes a culture of collaboration. She insists that everyone on her team meet regularly with their internal customers in operations across the different regions to understand their needs and listen to them. In creating an open dialogue across the entire organisation, Brown and her team are better prepared to help those who need it. This open dialogue extends further, as Brown has redefined the negotiations process through the creation of mixed negotiation teams. “It is not just supply chain going to
Anchor USA a QMax Company negotiate with the supplier. We engage technology, operations, sales, and finance,” she says. “Together we developed a negotiation strategy centred around how we can go out and work with the suppliers, understand exactly what is required, and how we can tailor and shape our negotiations to generate the best possible deal for both parties. For me, that has been a huge milestone for the company.” As QMax continues to grow and expand its supply chain network, Brown points to the implementation of the ERP system as the next big doorway to opportunity, as it will pull together the various elements of the
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supply chain into one centralised system, enabling visibility that will prove key in achieving future success. “My goal for QMax is to grow the organisation in a way that we can manage all the categories of spend, including the indirect spend categories such as IT,
and manage our total spend much better,” she says. “Because they are important. Of course, we want to continue to ensure that we are getting the best product or the best service, but for me it is the centralisation that will drive us into the future.”
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CONTRACTINGâ&#x20AC;&#x2122;S
BRIGHT Hypower has remained a leader within the construction sector thanks to its open-minded and bold approach to technology adoption Written by Catherine Sturman Produced by Tom Venturo
HYPOWER INC
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ne of southeast USA’s largest specialty contractors, Hypower has completed over a thousand projects valued at over $1bn. The family business’s humble origins and passion to provide quality services has seen it amass a diverse portfolio, grow to over 600 employees and overcome a number of challenges which many others have failed. Hypower houses several divisions, ranging from commercial electrical, new construction, renovation, and service and repair; to outside plant power and communications, telecom engineering, airfield lighting, ground mount solar and prime electrical infrastructure projects nationwide. Established primarily to undertake infrastructure projects in the early 1990s, the company’s specialty niche in runway lighting and airfield lighting systems, and work at the new Denver International Airport Runways put it firmly on the map. Its subsequent growth enabled the company to not only spread out geographically but add a significant number of strings to its bow. “We added traffic signals, high
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mast lighting, street lighting. We got into the traffic signal business, which filtered into the intelligent transportation system business. This taught us about fiber optic cables and telecommunications,” explains President and CEO of Hypower Inc, Bernard Paul-Hus. “In 1996, Congress deregulated the telecommunication industry to open up markets to competition by removing regulatory barriers to entry into the telecommunication marketplace, which led to a tremendous amount of investment from the private sector. This created a huge boom in the installation of fiber, which we jumped into. We moved more into telecom, but never got away from our roots in airports.” Despite the burst of the dot.com bubble, Hypower’s niche markets enabled it to remain afloat without concern, until 9/11. “9/11 was our first real big challenge because nobody saw
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Bernard Paul-Hus President & CEO
Bernard Paul-Hus, a 45-year resident of Broward County, began his career in 1986 as an electrical estimator. Bernard Paul-Hus directs the entire Hypower operation including corporate management and administration. He is committed to achieving excellence in every Hypower project through employee training, utilising cutting-edge industry technology and his unwavering dedication to quality. He ensures that every project team is unique and individually selected based on the qualifications and abilities of each team member to enhance the project delivery. His mentorship and guidance define Hypowerâ&#x20AC;&#x2122;s core values. Paul-Hus is actively involved in various committees and industry associations including TEC/VISTAGE Member since 1997; ABC (Associated Builders and Contractors) Board of Directors, a member of CASF (Construction Association of South Florida). Bernard is personally involved as a leader and a mentor with quite a few local charities â&#x20AC;&#x201C; HANDY (Helping Abused Neglected Disadvantaged Youth), Boys and Girls Clubs of Broward County, 4Kids of South Florida and Cystic Fibrosis Foundation. Hypower donates over $100,000 to local charities every year.
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that coming,” Paul-Hus explains “We’ve always been very reactive solemnly. “It wasn’t predictable in to the market, trying to stay ahead any kind of economic model, and all of what the market’s going to do. of our airfield lighting projects shut Right now, all of our divisions are down. However, we were fortunate firing on all cylinders, but sooner or to survive it, and within a year we later things will slow down. We now were back up and running normally. have enough foresight, vision and “The lesson we learned from data to anticipate these challenges, that, was that diversity was going and to weave our way through what to be our path going forward, the world throws at us.” so we needed to really diversify ourselves Forward planning into these counterBy paying significant cyclical niches,” he attention to its continues. “The tumultuous Hypower Inc most common history, Hypower was established in thing that gets has applied these done by companies lessons towards its like ours is buildings. future goals. Utilising But even buildings, as predictive analytics, we saw in 2008-2012 can a business intelligence pretty much evaporate. When this platform, and delivering ongoing happens, government-funded and training, employees are now able subsidised work stays relatively to elevate their abilities within steady, and if you’re good, you’re their own specialty niches. going to continue to win it. “Our focus needed to be on “We ended up with seven divisions, achieving the highest level of financial but when the recession hit, we acumen at a project management decided to narrow these down into level, and we’ve been working on the five groups that we have today. that since 2009,” adds Paul-Hus.
1991
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HYPOWER INC “Having project managers that are effectively as good as any accountant at not only the historical, but the predictive part of a project, the forecasting side, has proven to be a huge home run for us. It’s also created the ability to go from micromanaging everybody’s decisions, to putting them in this world of ‘If-Then decision making thinking’. “We believe in autonomous management making decisions. We’ve created systems and processes that allow staff to make their own decisions based on the data they’re being presented with and with the options that are open to them.” Creating a system where employees are therefore encouraged to look at data on a regular basis and look at their own performance, as well as their team performance, has taken the company to new heights. “There’s a couple of different softwares which we’ve customised. We’ve now started integrating all those platforms into our proprietary platform, called HYPE,” explains Jeff Emerson, Vice President of Electrical Construction. “This pulls in real-time data, giving
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project managers and people in the field the systems and information needed to make decisions. It pulls in how much are we spending on material, or how many hours we have spent. What is our production goal? Are we installing as much every day as we need to? What are the open RFIs? It takes all these different systems and integrates them into one. “We’re in the middle of more app development now, that’s going to give every single person in the field, no matter what level they are, a daily goal on exactly what they’re supposed to achieve,” continues Emerson. “Up until recently, we did this verbally and with spreadsheets. Now, it is automated on an iPad or Smartphone that everybody will be able to see first thing in the morning and report on throughout the day.” Digital disruption The use of data within construction and design is continuing to reshape traditional
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Jeff Emerson Vice President of Electrical Construction
Jeff Emerson is a talented and seasoned executive with over 20 years of experience in electrical contracting management and operations. He brings a wealth of expertise with strengths in areas such as financial and project execution, profit and loss analysis, workforce talent investments and long-term corporate strategy oversight. In his eight years with the Hypower family, Emerson has shown a strong understanding of how to obtain measurable gains, identify key performance improvements and provide tangible evidence of success throughout his leadership roles. With a reputation for judicious use of resources and resulting cost containment, Emersonâ&#x20AC;&#x2122;s work has been instrumental in providing Hypower with leading edge best practices and management reporting capabilities critical to the success of production systems and company performance. In addition, Emerson has effectively raised transparency and visibility within the organisation by bringing technology decisions and issues to the forefront of crucial Executive Committee discussions. His commitment to excellence lead the company to become one of the local pioneers to implement and utilise the use of Virtual Design and Construction (VDC) and its newly designed studio houses over 20 VDC specialists. w w w. e n e rg y d i g i t a l . c o m
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practices which have remained relatively unchanged – until recently. For Hypower, it is clear that the company remains keen to take full advantage of embedding new technologies across its operations. By strengthening its virtual design and construction capabilities (VDC), as well as harnessing building information modelling (BIM) technologies, the company has optimised its processes, reduced the number of mistakes and delivered higher quality projects at competitive prices, leading the business to remain ahead of the curve. “A lot of technology that’s used in modelling software, such as Revit, Navisworks, and AutoCAD are all pretty much industry standard. It’s the level of detail that sets us apart. We look for jobs where our customers or clients are going to appreciate the value that this brings,” explains Emerson. “When we’re 3D modelling and working with the rest of the team, you can view areas of concern, such as whether a conduit clashes with a HVAC duct, for example. We fix all these things before the material
‘Hypower harnesses Virtual Design and Construction and Building Information Modelling (BIM) technology to deliver higher quality projects at competitive prices’
HYPOWER INC
is ordered, or a stick of conduit is installed. This provides a lot of predictability, allows the schedule to be maintained, and the owner can look at the model and see what his building is going to look like inside and outside before we even start. Paul-Hus adds: “It’s the ability to virtualise a project by building it in three dimensions, while working with our fellow specialty trade contractors. We can all see the problems we’re going to have ahead of time, so we can fix it in this virtual world, so that when we get out there in the job site, it goes much better.” With up to 20 dedicated VDC/ BIM specialists, all large projects at Hypower utilise these essential processes. Coordinating with various trades is therefore encouraged across all avenues and moves the company towards the purchasing and prefabrication process. “Instead of ordering what might be typically six parts and have them come out in six boxes in the field, we’ll assemble all six of those pieces off-site and ship it out with a clear label that matches our VDC
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design, where the parts are then to be put it in place. We also use the Trimble Total station, which is our layout equipment,” adds Emerson. The use of new, digital tools has also overhauled traditional layout processes. “The team used to get in the field and use a tape measure, a chalk line, flags and drawings to figure out where everything’s supposed to go based on information provided from the contractor,” explains Emerson. “Now, when we receive information, all our points are laid out in a tablet. One team member can go out with Trimble Total Station, set out the laser, and mark where it all goes. Through this, we’ve reduced layout time by 70%. “We’re now also at near zero mistakes,” he continues. “In the last seven jobs, we have never missed a layout point, to the point that we’re actually helping others who are doing it the old school way. It’s therefore
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Barry Olson Vice President of Purchasing
Barry Olson started his career in the electrical industry in 1989, working for an electrical distributor and then transitioning into the contracting side of the business. Over the years, Mr. Olson has led the purchasing efforts of several large electrical contractors across the nation before settling in with the Hypower team in 2015. Devoted to the development of a procurement system based on partnerships with vendors, Mr. Olson has made significant changes to Hypower’s basic buying philosophy that has supported both Hypower’s long term growth strategy and contributed to bottom line profitability. Olson is also actively involved in the development of Hypower’s company culture; believing that the right working environment is conducive to maximum employee contribution leading to the company’s overall success. Mr. Olson holds baccalaureate and master’s degrees in organisational leadership as well as a master’s degree in management. Olson is also planning to start work on a PhD. in the fall of 2018 that he believes will equip him to further refine and develop Hypower’s workforce for continued growth and long term organisational stability.
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bringing value not just to us, but to them as well,” observes Emerson. “This will become the new norm in how buildings are constructed,” observes Vice President of Purchasing, Barry Olson. “People in their 20s and 30s are coming into the industry with their own ideas and paradigms of how much easier computer modelling makes things, for example. “We’re in a time where we’ve got a lot of senior managers that are also saying, ‘we’ve never done it this
way, we’ve always done it the other way’, and you now have enough new information and people in the industry asking the question, ‘well why can’t we do it this way?’ “Whilst there’s a blending of the two, at some point this whole platform of how buildings are put together is going to be the generally accepted practice,” he adds pensively. “I think we’re ahead of the curve in what we’re planning, because we are looking down the road as to where this will lead.” Nonetheless, Paul-Hus explains that the technology has presented a number of new challenges, particularly within Hypower’s
“Sooner or later things will slow down, but we now have enough foresight, vision and data to anticipate these challenges, and to weave our way through what the world throws at us” – President and CEO of Hypower Inc, Bernard Paul-Hus 124
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relationships with clients. “We can become extraordinarily frustrated at how difficult it is to sell the value of this technology to the end user, which is the owner or the general contractor,” he says. “If they are not experienced with the technology, we have not developed a good way to explain all of the things that would have gone wrong had we not gone through our processes. We have not been able to quantify in any meaningful way, all of the mistakes that we fixed before we got onto the site. “Us and the other trade contractors, through the virtue of our coordination, which is generally driven by the specialty trade contractors, have fixed so many problems, that when we go out to build the job, these problems will never happen, so the end user can never appreciate the fact that they didn’t happen. “We can measure year over year improvement, but if I tell a client that we’ve been able to drive 24% of our labor cost out of our jobs year on year on the same number of manhours, their first question is, ‘why isn’t your price lower?’” The cost
HYPOWER HAS COMPLETED OVER A THOUSAND PROJECTS VALUED AT OVER
$1BN
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trade off of planning for the labor gains yields predictability when done properly which ultimately saves time and the cost savings flow throughout the entire project. Increased agility Despite this, Hypower’s embrace of new digital tools continues to influence its positive culture of adaptability and change. “Five years from now, we expect that the hard hat that workers wear will have a chip in it with a visor that projects on the wall. I will walk into a room, flip down my visor and see all the work that I’m supposed to install that day,” explains Paul-Hus. “Rather than measure anything or do any layout work, it’ll actually be on the visor screen. I will simply need to walk up to where the device that I
After
need to install is, match it up with the shadow box that’s on my visor, and screw it to the wall, and I’m done.” “If you don’t have a culture that accepts the use of technology, you are going to be a company that struggles,” he adds. “The only way you do that is by implementing change, measuring performance improvement, rewarding people for following processes, and making sure that they understand this.” By placing significant emphasis on continuous improvement, Hypower is a strong believer in training and developing its workers, improving ways of working through the use of data, giving context to such data and then proactively reacting to the data received. “We don’t get focused on individual results, we get focused on
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ABC East Excellence in Construction Awards
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the overall result,” says Paul-Hus. “We don’t want to put too much emphasis on profitability as the rest of our core values could get ignored; people might make decisions to boost profitability that hurts our professionalism, which then prevents us from continuously improving and ends up hurting our relationships.” Inspiring others Not one to rest on its laurels, Hypower expects the best of its staff, and makes a significant effort to give back, not just to its employees but to the local community. Its efforts to drive positive engagement and quality results have seen the company become recognised as
Business of the Year by the South Florida Business Journal in 2017. To reward employees, Hypower seeks to gather all required data and runs a number of events, inviting employees to attend. Presentations are undertaken and the company aims to recognise all staff which are leading the it to success. Additionally, Hypower’s growth has seen it give back to local communities, both through its charity events, raising over $1mn thus far, as well as recruitment of locals. Paul-Hus explains: “A young manager we recently recruited was through a charitable organisation, Helping Abused Neglected Disadvantaged Youth (HANDY).
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HYPOWER INC
“If you don’t have a culture that accepts the use of technology, you are going to be a company that struggles” – President and CEO of Hypower Inc, Bernard Paul-Hus
NBC Telemundo Headquarters
This individual was displaced from Haiti because of the earthquake in 2010. He was brought to the United States, where he finished high school, went to Florida Atlantic University and gained a degree in accounting. We brought him in as an intern and now he’s a full-fledged employee.” “Peter Stoykov, our Marketing Director, and I recently gave a presentation to kids on a career path
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in the construction industry. We go into the community and we say, ‘look, we understand that everybody wants to go to college, but we also understand that not everybody gets to go to college. It could be because you don’t have the grades, it could be because you don’t have the financial means, it could be for a variety of reasons. It could be because you have a child too young and you just don’t have the time to have a job, but none of that means that there aren’t career paths to success.’ “We use our company as an
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example that you can start off in the field as an apprentice electrician and apply into our program or go to school while you’re receiving training. After four years in a certified program and a Journeyman prep course, as part of our Workforce Development Plan, you will receive a professional electrician’s license.
“At the end of four years, you’re making $50,000 per year. Your career path can follow suit. You continue to take our training, supervisory training, go to seminars, whatever it takes to continue your education. Keep climbing the career path to an executive level,” continues Paul-Hus. “I’m the President and CEO and I don’t have a college degree. I’m a really good example to stand and say, having a child at 19 years old, like I did, and not having a college degree doesn’t limit your ability to think big, chase your dreams, build
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VDC IN ACTION
“We’re in a time where we’ve got a lot of senior managers that are saying,
‘We’ve never done it this way, we’ve always done it the other way,’ but you now have enough new information and people in the industry asking the question, “Well why can’t we do it this way?” – Barry Olson, Vice President of Purchasing
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a business and be a leader. Do all those things that some people might have you believe you can’t do. Don’t listen to them and don’t get discouraged. There are multiple paths to achieving your goals.” The path to success Hypower’s long-term vision to ensure its vendors, customers, employees and shareholders remain happy will see the company continue to grow and deliver exceptional value and quality services, where digital tools will continue to support decision making and guarantee exceptional results. “Growth is the cornerstone of our success,” reflects Paul-Hus.
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“Growth means that we can continue to invest in these processes. It means that we can continue to show folks that are just coming into this industry to come to work for us, that there will be an opportunity. “There is a career path that will not be stymied by running into someone who you can’t pass due to attrition. We’re growing, we expect workers to learn. The more you learn, the more likely we are to be able to offer you that opportunity that’s been generated by our growth. So, growth is super important. “If, through the use of all of our processes, we continue to drive down what it costs us to do the work versus the market value of doing that work, even when times get tough and we lower our prices, our costs will already be in line with those lower prices,” he adds. “For now, we’re benefiting with higher margins, because we continue to pursue work at a market rate, not
at a cost-plus rate. However, when we get into that really tough world of the overall market shrinking, we should be able to maintain or even continue to grow our revenue in that tough economy, simply because we, during the good times, didn’t get complacent with our success. We continued to take the products of our success and invested in continuous improvement. When times get tough, we can perform at a lower cost basis than our competitors.” Paul-Hus concludes: “That’s really our goal, to continue to take what the market gives us. Right now, there are more opportunities than we could ever react to. “But when those opportunities become limited, we will be in an excellent position, with a very well skilled workforce, and with processes that have driven down our cost so that we can remain competitive without losing money even through those tough times.”
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A WO LEADE SUSTAI DISTR ENER
Written by Leila Hawkins
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s Produced by Rob Gray
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“We reduce electrical consumption by almost half. Air conditioning is at its peak 75% of overall electricity consumption during the summer months, so that’s huge” Yasser Salah Al Jaidah Chief Executive Officer, Qatar Cool 134
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Qatar Cool demonstrates how it’s possible to be a world-leading, wholly sustainable district cooling provider in a region with scarce water and soaring temperatures
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atar boasts temperatures that rarely drop below 23 degrees, something which, along with its many shopping opportunities and luxury hotels, makes the country hugely appealing to tourists wishing to escape cold winter months. However, the climate comes with its challenges: water is a precious resource, and air conditioning, an energy-intensive system, is required almost all year round. A far more sustainable system is district cooling. Rather than use electricity to cool the air like conventional air conditioning does, it employs chilled water that is transported through underground pipes, and can be recycled from a number of sources like seawater. Qatar Cool, a global leader in district cooling, uses Treated Sewage Effluent
(TSE) in two of its cooling plants, which is essentially wastewater that has been filtered of contaminants. Sustainable cool Chief Executive Officer Yasser Salah Al Jaidah explains that its main benefits are energy efficiency and savings in both operational and capital expenditure. “We reduce electrical consumption by almost half. Air conditioning is at its peak 75% of overall electricity consumption during the summer months, so that’s huge. Obviously as a consequence we reduce CO2 emissions, by reducing the demand for electricity.” A recent study they completed found that over the last eight years they have saved over a billion tonnes of CO2, equivalent to 1.9bn kilowatt hours of electricity. The cooling system
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also reduces maintenance costs, as the company employs an economic scale principle whereby each client maintains their own system. Another benefit is aesthetic. “If you see high rise buildings you don’t see these big cooling towers sticking out at the top” Al Jaidah says, as internal piping means there is no need for the traditional condenser units on the roof. Al Jaidah says these efforts make Qatar Cool “a very sustainable company, more so than any conventional cooling company out there”. Its experience of using TSE has led to an ongoing 25 R&D projects with non-government entities and universities. “We’re trying to push the envelope to make this business even more sustainable. An example is trying to look at the oxidisation of TSE, looking at evaporation, how we can capture that, and condensation recovery systems.” Its drive to be as sustainable as possible has won several recognitions from international institutions, and it is in fact part of their mission statement. “We’re a safe, reliable energy efficient and responsible provider of district
“We’re committed to supporting the environment, and the development of Qatar, and to create shared value for the customers, communities and shareholders” Yasser Salah Al Jaidah Chief Executive Officer, Qatar Cool
cooling services,” Al Jaidah says. “We’re committed to supporting the environment, and the development of Qatar, and to create shared value for the customers, communities and shareholders. Our vision is to be recognised as the best in class provider of district cooling services.” Qatar Cool currently operates two major districts, including the world’s largest district cooling plant at The Pearl-Qatar, a man-made island in Doha. A fourth cooling
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YASSER SALAH AL JAIDAH - CEO Yasser Salah Al Jaidah joined Qatar Cool on the 18 January 2015, as the Chief Executive Officer. Al Jaidah is primarily accountability for the planning, management and direction of the day-to-day aspects of the business of the company subject to such policies and directives as the Board may adopt. Al Jaidah has the responsibility from legal compliance, mission and vision, policy and planning, governance, financing and community relations. His main objectives for the organisation will focus on three main themes operational excellence, customer management and aggressive growth through development. Before joining Qatar Cool, Al Jaidah was the General Manager and Director of South Hook LNG in the United Kingdom, the largest liquefied natural gas (LNG) terminal of Western Europe and provider of 20% of the United Kingdomâ&#x20AC;&#x2122;s LNG consumption. He completed a bachelor of science in Electrical Engineering from the University of Missouri in the United States, he is also certified as a Project Management Professional (PMPÂŽ) from the Project Management Institute (PMI) and has an Executive MBA from HEC-Paris in Shanghai, China. He has over a decade of energy experience and has held positions throughout the field which include maintenance, operations engineering, project management, marketing and venture projects.
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plant is under commissioning in the West Bay district of the city, which is being built to LEED (Leadership in Energy and Environmental Design) certifications. Once completed, it will have a cooling capacity of 40,000 tonnes of refrigeration and, in contrast to the other cooling plants in West Bay, will use reverse osmosis. As a whole, Al Jaidah says Qatar Cool is “one of the five largest district cooling companies in the world. With that comes a lot of
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responsibility with making sure that we have the best standards, and the best trademarks in place, because we’re a leader of the pack.” Benchmarking He explains that the biggest challenge is not having benchmarks for comparison. “There’s nobody out there that is doing what we’re doing to learn from. With that there’s a lot of trial and error, and a lot of learning over time, what to do and what not
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do to, because not only are we one of the biggest, but we’ve probably got one of the most complex grids of any district cooling facility out there.” To address this, Qatar Cool uses consultants to ensure that tariffs, costs and energy efficiency are in line with those of its competitors. “That’s how we gauge ourselves,” Al Jaidah says. The other challenge is operating in a new, unregulated market, which gives rise to misconceptions on the part of the public. “People perceive that
we’re taking advantage of our position and our size. We’re not because we’re continuously benchmarking ourselves and our tariffs against the other players in the region. If regulations were put in place, I think that would settle minds about the industry, especially the tariffs perspective.” Working with Tarsheed, a national programme that promotes efficient use of energy and water, has helped with this. Tarsheed works with government agencies to promote
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“There’s nobody out there that is doing what we’re doing to learn from. With that there’s a lot of trial and error, and a lot of learning over time” Yasser Salah Al Jaidah Chief Executive Officer, Qatar Cool
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district cooling, and Qatar Cool has a MoU with the organisation, in addition to a Tarsheed award for energy conservation. There are also key partnerships with Tabreed, a fellow district cooling company, and a number of academic and energy institutions that can assist with technical issues. Social responsibility is another important part of the company’s culture. It runs annual events such as Conservation Week and Water Week with Tarsheed, Earth Day with local schools, and school awareness activities on the theme of energy conservation. Last year it won the CSR Leadership Award from Qatar University. New technology already plays a huge role in all of Qatar Cool’s processes, as everything is digitised, from controlling the water flow to chemical balancing. In the near future, it is looking further into the advantages that implementing artificial intelligence (AI) and machine learning can bring to district cooling. There’s certainly plenty of development ahead. The country is undergoing dramatic construction because of the upcoming World Cup in 2022, with new shopping malls, hotels, train stations, homes and restaurants springing up. These present myriad new opportunities for Qatar Cool. In the next five years Al Jaidah sees the company expanding not just within Qatar, but potentially beyond its borders too.
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