How is ENGIE working on the future of energy?

The Innovator: What is ENGIE doing to work towards a more sustainable future?

MW: We are really focused on developing low carbon or carbon neutral solutions. We are looking to foster collaboration internally and externally, through our research, our venture capital fund and new business factory (a venture builder aimed at combining the capabilities of the business units, internal and external startups and research.) The good news is we managed to reduce our carbon emissions by 50% in four years by shutting down coal plants and building wind and solar installations. The bad news is that was the easy 50%. The next 50% is the hard part and that is going to take longer than four years. There are three parts to our efforts. We are looking at biogas, hydrogen fuels and carbon capture along with renewable electricity from wind and solar; smart and efficient consumption on the demand side through the use of smart grids and batteries and smart mobility; and using advanced tools such as AI, drones and robots. At the same time the innovation team is trying to facilitate interaction with entrepreneurs around the world as well as governmental organizations such as NASA and ESA and others.

The Innovator: Can you give us an example of this type of collaboration?

MW: At the Port of Dunkirk we are working on the future of energy with support from the EU in collaboration with other research entities and startups. The project, called C2FUEL, aims to develop energy-efficient, economically and environmentally viable CO2 conversion technologies. The idea is to convert hot waste gas from an Arcelor Mittal steel mill into hydrogen and eventually burn it in a VW engine in the form of a low carbon fuel.

The Innovator: How is ENGIE leveraging new technologies in other ways?

MW: The amount of data that utility companies collect is incredible. It covers utility bills going back over a hundred years. Up until now we have not been savvy about how to use that information but this will change thanks to AI and other capabilities.

We will also be able to use AI for predictive maintenance instead of waiting for equipment to fail in place and we can use it to manage the grid more reliably. Blockchain can be used for tracking solar energy. Thanks to technology innovation and new business models energy companies will not look the same as they did 10 years ago. The future will be different but we don’t know all the answers yet.

The Innovator: Given that startups have innovative technologies but don’t have the ability to scale and the need for large companies like Engie to bring innovation in from the outside doesn’t it make sense for there to be more collaboration?

MW: Big companies have scale, are reliable and know how to execute. Small companies are nimble, creative and innovative. The good news is they are a natural fit. So, typically a company that has trouble innovating quickly enough buys its way into innovation by acquiring a startup. They pay a handsome price and there is a culture clash. Publicly listed companies have to follow all these rules and the net effect is the startups, who wish to be nimble, feel oppressed and the motivation of the entrepreneurs who got rich through the acquisition to work hard declines.

One way around this is for large companies to get involved earlier in the process. ENGIE does this through our venture capital fund, which invests in young companies to get to know them and align with them earlier in the process. Another way is to create new companies from inside of ENGIE. I teach entrepreneurship at the University of Texas and as part of my job, I have 20 PhD studies create one company every year for five years. If they can do it then certainly ENGIE can.

The Innovator: As we move towards a model where every consumer can – at least in theory– be a power generator – what should energy companies like ENGIE do to remain relevant?

MW: My view, and this is Michael Webber talking because there is not a consensus on this, is the industry will need to move towards a service model. In the current model customers might require energy in the form of a kilowatt-hour of electricity or gas. In the future energy companies might sell a certain number of hours of lighting or heated water or personal kilometers of mobility, not the electricity or the gas. The transition is already happening with mobility. Every auto manufacturer will have to move to autonomous vehicles and ride sharing instead of selling cars.

That kind of transition will happen in the energy world but unlike cars that last 10 years and auto factories that last a couple of decades the energy sector has assets that last 30 to 100 years, so the shift is scarier for us. It is going to happen whether energy companies want it or not. The world is changing, and we will need to as well. Our customers are already asking for smart city solutions. They want us to intelligently manage energy and traffic management and public lighting. So, the industry will be moving to more complex offers and more service offers. I think we are going to surprise people with how nimble we are.

Written by Jennifer L. Schenker  

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