You are here

Energy maven

Schneider electric's CEO and chairman Jean-Pascal Tricoire believes technology provides the solution to the world's energy dilemmas.
Saturday, November 12, 2016 - 05:50

BT_20161112_RAFNEW1_2590229.jpg

BT_20161112_RAFNEW1_2590229.jpg
''If you don't have access to energy, you don't have access to progress and education. So your first priority is really access to energy.''

YOU'RE on the way to work. Before arriving at the office carpark, you check your phone to determine how many lots are available. The app indicates that there are more lots available in the neighbouring carpark, and you decide to make the turn to the other carpark instead. While getting out of your car, you suddenly realise that you've forgotten to switch off the lights at home. Tapping on the same app on your phone, you do just that on the way to the lift. Such technologies not only bring about more convenience but they also help cut carbon emissions through energy efficiency, according to Jean-Pascal Tricoire, CEO and chairman of multinational energy management company Schneider Electric. In other words, sometimes you can have your cake and eat it.

He pulls out his phone. "I will show you."

Mr Tricoire demonstrates the app he uses which allows him to check - even from where he is sitting in a restaurant in downtown Singapore - which meeting rooms in the company's building in Paris have been booked, and even if a room is not, whether it is currently occupied. He can lower the window blinds and turn on or off the lights in a meeting room through the app, he says. "I've got my home connected to the phone also. But I don't want to play (with it) because my wife is not going to be happy," he quips. "If I switch (the lights) on or off, I will really have big trouble."

By Mr Tricoire's reckoning, such technologies - and the services they provide - will contribute to solving the weighty problem of the world's energy dilemma: on the one hand having to reduce carbon emissions and therefore energy use, while on the other, providing energy access to the two billion people in the world who do not yet have access to reliable electricity.

sentifi.com

Market voices on:

Having lived in China in the early 1990s as the country was opening up, and in sub-Saharan Africa after that, Mr Tricoire is familiar with the power outages that plague many developing countries. "If you don't have access to energy, you don't have access to progress and education. So your first priority is really access to energy," he says. At the same time, the world needs to halve its level of carbon emissions. A study published in 2013 found that developed countries must reduce emissions by 50 per cent below 1990 levels - by 2020 - if the world is to have an average chance of limiting global warming to 2 degrees Celsius.

"If you summarise all of these, energy consumption will increase by 50 per cent, and carbon emission should be divided by two. So we need to do everything in life with an efficiency that is three times better." This will be an impossible task without the help of technology, Mr Tricoire adds. "Technologies that exist today are able to resolve this equation." Schneider Electric, he says, considers the ability to access energy for every person on the globe at every moment a fundamental right. At the same time, it also believes in having a green planet.

In Mr Tricoire's view, there will be two key technology revolutions that will help to resolve the two ends of this equation. The first is the development of affordable renewable energy with storage systems. The second is the movement towards the Internet of Things, where energy use, automation and software will converge. With this, the world will be able to increase energy efficiency dramatically. While the former is more often spoken of, "the biggest and cheapest and cleanest and fastest source of green energy is definitely energy efficiency", Mr Tricoire tells The Business Times over an hour-long chat.

Schneider Electric has made that its business, producing solutions that combine energy, software and automation aspects for four distinct markets: buildings, data centres, industry and infrastructure.

Cities, in particular, are at the core of the infrastructure market. "Cities today represent less than 5 per cent of the world's territory, 50 per cent of world population but more than 80 per cent of carbon emissions and energy consumption. The battle for climate change will be won or lost in the city," he says, adding that Schneider therefore feels very aligned with Singapore's Smart Nation ambitions. The technologies of today allow the world to save energy on one end, and to share it on the other. This, Mr Tricoire explains, is because the amount of carbon emissions that the world can emit is limited on a global basis; when one country emits more greenhouse gases, other countries have a smaller carbon budget to work with. "If we save everywhere, then the new guys will have access to energy. So you save to share on the other side," he says.

As he sees it, the potential of the Internet-related technologies has not yet been fully exploited. The first 20 years of the Internet were spent connecting three billion people together, says Mr Tricoire. In the next five years, three more billion people will connect to the Internet - plus 40-50 billion objects.

"So episode one of the Internet was connecting people to people. Episode 2 of the Internet will be to connect people to thousands and millions of objects. And it takes a lot of time for people to appropriate those technologies and change them into benefits."

While Schneider Electric is a technology company, what Mr Tricoire says he is really passionate about is the benefits these technologies can bring. "What makes the difference is the outcome, and what service I can bring to you. Do I make your house safer? Do I make it more comfortable?"

For instance, the firm is developing a weather forecast service for technical facilities, such that if there is a storm coming, "You say to users of solar farms to be ready not to have electricity for the next three hours. And we will bring orders to the water network: prepare for crisis management." On the other hand, if a heatwave is expected, buildings can be cooled in advance.

Investments into energy efficiency technologies can bring payback in three years, so the cost is "very affordable", says Mr Tricoire. What's stopping wider use and adoption of these technologies so far is the lack of training and unfamiliarity with them. "All of those technologies - whether it be renewables and storage or the Internet of Things - were not mature till five years ago. So no universities, no technical schools have been training people to do that. Therefore architects still design the old way, industrial people still think the old way."

But companies such as Schneider Electric are not free from blame either, he says. "We are a culprit because we are not communicating enough on that. But we are helping schools to set up programmes. The biggest problem is us, it's people."

On the other side of the energy equation, Schneider Electric also has a worldwide operation to enable access to energy for the poor. Under this programme, the group has in the past six years brought energy to five million people without access to electricity grids in Africa, Asia and South America. Beyond that, it has also trained some 100,000 young adults looking to enter the electricity sector, and invested in 14 local energy companies through a seven million euro fund.

It now aims to supply electricity to over 50 million people and train over one million electricians by 2025, as well as seed even more companies. This work is sometimes done as part of the Schneider Electric foundation, but also part of the group's core business.

"When it is the foundation, it is a subsidy. Otherwise we drive that as a low-profit or no-margin business. It's actually developing extremely fast."

How does it make sense as a business for Schneider Electric then, you ask.

"It makes sense for many reasons," Mr Tricoire replies without missing a beat. The company, he says, conducts 45 per cent of its business in emerging countries where populations are living in extreme poverty. "A company cannot develop or be prosperous in poor communities. We have a role to play to bring progress to those communities. If they don't have the right level of wealth, if they are not healthy, if they have security and safety issues, at the end of the day, there is no local market."

Companies have a responsibility not only to their customers and employees, but also to the communities around them, he says. "Of course it's not profitable directly, but first it benefits the community where we work."

Then there is also the added benefit of increased pride and loyalty for the company's own employees and even customers. "Because they play an active part in that," he points out.

The company has managed to get its partners, distributors and other business associates to work with it on such projects. Such views are unconventional, Mr Tricoire concedes. "It's a bit original I agree, but it's really positive for us."

It isn't just a long-term feel-good objective for the company either.

Working in emerging markets brings about a lot of innovation for the company, Mr Tricoire says. "When you manage to supply cheap systems of energy for tough environments, we learn a lot on electronics, resilience to humidity and mosquitioes, and cost reduction. We are getting really good at certain elements of cost. And when you do that, you can import those innovations to other places." For instance, while energy storage technologies are now creating a buzz in the Western world, Schneider Electric has been doing it for a long time, albeit with a more rugged and cheaper version for emerging markets, says Mr Tricoire. "So what we learnt in the emerging countries is something that will serve us in the rich countries."

Being original is a label that Mr Tricoire could well get used to. The engineering-trained COO-turned-CEO relocated to Hong Kong in 2011 with several members of his management team, becoming the first head honcho of a company on the French stock market benchmark to move out of France - causing a stir among the business community there.

Mr Tricoire says he made the move because the company was growing the fastest in Asia. "With such a growth rate, I think it's important to be close to the centre of gravity." Furthermore, as a technological company, "we don't do many things but for what we do, we have to be the best in the world. So it is absolutely paramount and crucial to be global."

Old habits and thinking, however, are hard to change. "So the only way to accelerate this move was to say: Look, you do what you want, but I move. So don't come to Paris to see me, come to Asia to see me. Then people agree to revisit their paradigm - you are confusing all of the traditional parameters so that you can rebuild another way of working." The Asia-Pacific is now the largest region for the group, contributing 29 per cent to its turnover of 26.6 billion euros (S$41 billion) last year. North America and Western Europe made up 27 per cent and 26 per cent respectively, with the balance from the rest of the world.

But it doesn't mean Asia takes priority at the expense of other regions; other members of Schneider's leadership team are based in the United States and in Europe. "We call ourselves a global and connected company," Mr Tricoire says. "That means when we make a decision you can be sure that around the table there will be people from the diverse continents." The radical move, however, has accelerated the diversity of the company because it can now offer global careers anywhere in the world, he adds.

In most companies, if one wants to climb the ranks, he or she typically has to move to the headquarters. "For us, the headquarters are not physical... So whatever your origin, whatever your country, whatever your gender, you have the opportunity (to progress in the career) without living too far away from your family. At a point in time in life you have to go back to take care of your parents, take care of your kids for schooling."

It's still too early to see the results from the move, he says. "I believe every decision of the management will have effects 10-20 years later." Still, what is visible is that this has accelerated the speed at which the company moves. "Because Asia grows faster. Asia is super competitive. Asia works 24/7. So it has forced all of us around the world to adopt that pace, and that's good."

And Mrs Tricoire - homemaker to their three teenage children - is okay with it as well? "When I don't play with the home," he says with a broad smile.


JEAN-PASCAL TRICOIRE

CEO and chairman, Schneider Electric

1963 Born in Beaupréau, France

Education

1986 MBA, EMLYON Business School

Electrical engineering degree, École Supérieure d'Electronique de l'Ouest

Career Highlights

1985 - '86 Positions at Alcatel, Schlumberger and St Gobain

1986 Joins Merlin Gerin (now Schneider Electric)

1988 - '99 Schneider Electric positions in Italy, China and South Africa

1999 - 2001 Head of global strategic accounts and of Schneider 2000+ programme to promote growth and reduce costs

2002 - '03 Executive vice-president of Schneider's international division

2003  Appointed Chief Operating Officer

2006 Appointed President and Chief Executive Officer

2011 Relocates to Hong Kong

2013 Appointed Chairman and Chief Executive Officer

Nespresso
Pair your daily business read with the perfect cup of espresso.

Subscribe to The Business Times today to receive your very own Nespresso Inissia coffee machine worth $188.

Find out more at btsub.sg/btdeal

Powered by GET.comGetCom