Expert insights: an interview with Olivier Sala, Group Vice President Research & Innovation at ENGIE
October 28, 2021
In preparation for The Business Booster next week, we had an informative discussion on decarbonisation, sustainability and digitalisation, with Olivier Sala, recently named Group Vice President Research & Innovation at ENGIE
These topics have been at the core of ENGIE’s strategy for a number of years. By 2016, ENGIE had already pledged to decarbonise, decentralise and digitise their operations. As Olivier recalls, “We had a head start on the road to decarbonisation, ahead of our peers, with the early closing of the majority of our coal-fired powerplants. This was a bold move at the time, and helped us decrease our emissions by 50% in the first 3 years. A major achievement, it was just the beginning of our long-term commitment to sustainability”
This year, ENGIE stated their goal to achieve carbon neutrality by 2045 in all 3 scopes of CO2 emissions (1,2 and 3). The roadmap to meet this target hinges on 4 key levers:
- A significant development of renewables (+49 GW by 2030) and low carbon heat (+8 GW by 2025)
- Complete coal phase out by 2025 in Europe, and 2027 in the rest of the world (electricity and heat generation)
- Switching of gas units from baseload to capacity services with less running time (to complement intermittent renewables)
- Fueling all gas units with green gas (biomethane or hydrogen by 2045) or equipping them with CCUS (carbon capture, utilisation and storage)
“Aside from the reduction of our emissions, a large and growing part of our business focuses on helping our clients on their own net-zero journey,” says Olivier. “We do this by providing green energy, energy efficiency services, infrastructures and commercialisation of carbon certificates. This represented 21M-ton CO2 saving for customers in 2020. We aim to double our contribution to 45M-ton CO2 reduction by 2030”.
The role of innovation in achieving decarbonisation targets
It would be difficult to achieve these targets by relying on the technologies and business models of today. That is why at ENGIE the role of research and innovation on the decarbonisation journey is key, and focuses mainly on technologies that render their renewable assets more flexible, more sustainable, more efficient and more circular. They also work on technologies designed to provision gas networks and gas-fired generation assets with green gases (biogas, hydrogen, syngas) in the future, and those that decentralise energy infrastructures for cities, communities and commercial/industrial establishments by using green energy sources and waste materials/energy combined with energy efficiency solutions.
Innovation is not only about technology, however, and ENGIE also seeks to innovate in their offering to customers, bringing integrated offers, as-a-service performance contracts or more innovative financing and digital solutions.
How ENGIE collaborates with start-ups
In addition to research and innovation, ENGIE is also keen to invest in innovative start-ups through their corporate venture arm, ENGIE New Ventures. They have invested in 28 startups to date, with the purpose of providing options for the group on new technologies and business models. A key criterion for investment is for these start-ups to work together with their operational entities on pilot projects and commercial contracts. The group has also acquired a number of start-ups in their core activities in order to boost their expertise and time to market. Equity investment is just one lever among many in working with start-ups, however. In a true open innovation approach, ENGIE partners and collaborates with start-ups through a number of different arrangements to bring innovations to life in their markets.
Digitalisation and energy transition
Until very recently, Olivier Sala was also managing director of ENGIE Digital. He stresses its importance, “Digitalisation is, of course, a vital lever in achieving our decarbonisation targets, measuring progress and increasing efficiencies. We need a more data-driven approach with digital applications. We have increased the number of employees working in software development at ENGIE Digital threefold in the last 5 years, and developed 12 key platforms to enable the operating digitalisation model of our activities. Notably, Darwin, a platform to run our growing number of renewable assets; Nemo, for the operation of our district heating/cooling infrastructures, and our brand-new platform Ellipse, an end-to-end software tailor-made to accelerate the decarbonisation journey, from setting the baseline and defining targets, through identifying the key actions and most appropriate roadmap, to guiding implementation and measuring progress. The tool was used to build our roadmap, and is now made available to enhance our clients’ own decarbonisation journeys”.
Reaching a net-zero Europe by 2050
Nearing the end of our productive talk, we asked Olivier to share his views on the main challenges that Europe faces to reach net-zero by 2050, a goal set by the European Commission: “There are 4 very important levers to achieve net-zero, but the right ratio between these levers is also important in delivering impact on time and on budget. The main one is energy efficiency, which is meant to represent 42% of our decarbonisation target. This is a particular challenge for the building stock, where a structural change with strong policy incentives and investments will be necessary to upgrade existing buildings and assure new ones are built to the highest energy efficiency standards. Electrification of uses is another important lever, but needs to go hand-in-hand with a growing supply of green energy for transport, buildings and industry. Green gas supply in large quantities is an important challenge, to fuel energy needs that cannot be electrified in a cost-effective manner. Existing gas infrastructures can bring significant value and lower transition costs as we gradually move from natural gas to green gases. As biomethane alone cannot fulfil this need, industrialisation of the hydrogen value chain and infrastructures is a real and pressing challenge. All the more so, as Europe lacks the natural resources to be self-sustaining and green gas imports will be necessary. And lastly, an efficient implementation of sector coupling and hybrid solutions across sectors and technologies (V2G, hybrid heat pumps, electrolysers, CCS) can bring an additional layer of optimisation to the transition journey”.
Interested in learning more? Check out Olivier’s keynote at TBB on the 4th of November at 15:15 during the TBB plenary session. Olivier Sala is Group Vice President Research & Innovation at ENGIE.