In an exclusive interview with Internet of Business, Maher Chebbo of General Electric discusses the company’s take on how digital transformation is shaking up the energy industry.
As one of 20 executives selected by the European Commission in 2005 to establish the European Technology Platform for Smart Grids, Maher Chebbo is well-placed to shine a light on how the energy sector is adapting to the opportunities and challenges of the digital world. This, after all, is the initiative that claims to have coined the term ‘smart grids’.
Chebbo spent 21 years honing his IT and software expertise at global digital providers SAP, before taking on the role of chief commercial officer for power digital solutions at General Electric (GE), last April. As of this year, his position covers the entire energy value chain, meaning that he oversees the company’s digital solutions as innovation officer, as well as its work in power generation.
“One of the things I’m doing in my role is shaping the vision for GE Power Digital Solutions for 2030 and beyond. We’re laying out where we want to take our customers and where we want to take our society using GE digital solutions. We’re also working on bringing this innovation focus to the employees.”
The company is introducing a process whereby if an employee has an innovative idea, they can submit it, and it will undergo a process of due diligence to determine whether it’s worth pursuing. The hope is that this will allow GE to bring an innovation to market every three to six months.
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What digital transformation means for energy
I asked Chebbo whether this meant that successful digital transformation is as much about undergoing a cultural shift as it is making technical changes.
“Absolutely. Alongside the move from an industrial to a digital industrial company, there’s another shift as well, where everybody goes from believing that all our solutions are created in factories then pushed to market, to it being the responsibility of all of GE’s 300,000 employees to think innovatively – drawing on their experience from the years they have spent at the company, or elsewhere.”
If an employee thinks something is worth prototyping, whether it’s a digital or engineering innovation, GE are eager to tap into it. Chebbo gives the example of using drones to make inspections more efficient. With a €1.4 billion a year market, there’s huge opportunity for organically grown innovations to make a big difference to customers and offer them something new year-on-year.
Since the European Technology Platform for Smart Grids was formed in 2005, digital transformation has taken off in the energy sector.
“It was about changing the way we collect data on everything from power generation, to buildings, to lighting, and particularly making changes that meant customer energy usage data would be collected not once or twice a year but every 15 minutes.”
By opening these data streams to providers, you can optimise the overall value chain, providing customers with the nearest, cleanest and cheapest energy. From there, around €3 billion has been invested in smart grid transformation in Europe, with around 600 projects currently taking place in this area.
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Chebbo was in Brussels the day before our conversation, working with the European Commission to get a better understanding of the overall energy landscape, including topics such as heating, cooling and electric vehicles. Europe’s reliance on imported energy, which current stands at 53 percent, is a pressing issue. The powers that be are eager to strive towards future energy independence.
When asked about his plans for March, at our Internet of Energy event in Berlin, Chebbo emphasised the potential of IoT in the energy industry.
“I’m going to speak about the great opportunity we have as one of the sectors where the internet of things can bring a lot of value. This is a small community where we know each other very well. I have been working with a lot of the attendees for years and this is a chance to learn about their new projects and where they are today.”
Chebbo will also be chairing a panel discussion at the event on how challengers are disrupting the industry, so I wanted to get his take on the impact start-ups are having.
“I believe that start-ups are absolutely part of the game. They have minimal bureaucracy, so that most of their time is spent on their products and innovation. Sometimes, when you get bigger and bigger, you have lots of things to juggle internally. The associations are opening themselves up more and more to start-ups.”
Chebbo has backed this up by creating favourable conditions at ESMIG (the European smart energy organisation of which he is President) for challengers to join. GE has also introduced competitions where they identify customer needs and ask SMEs to present their best-in-class solutions, based on the Predix platform.
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Slow off the mark?
While larger, older industries, such as banking and construction, can be slow to adopted digital transformation, Chebbo feels the energy industry has done quite well in Europe.
“It really depends on the region. When I was in Brussels talking with the European Commission, we were saying that in Europe the energy sector is doing well. The networks are good, we don’t see a lot of blackouts. Therefore, most of our time is spent anticipating the future and how to make sure that we get more and more energy efficiency.”
Where the industry has been slow, is in its emphasis on the business case – why investors should take interest, whether it’s the European Investment Bank or the private sector.
“Where you have a lot of engineers they focus the engineering aspects, so perhaps the business side lacks attention. Between 2005 and 2015 we didn’t involve a lot of financial people to develop this side but now things are really moving. A lot of innovation projects that used to be research-led are now becoming innovation-led, which means at the end you get things done and go to market.”
The future of IoT in energy
Therefore, the challenge for the sector’s major players is to combine their influence and engineering might with the flexibility and creative thinking of emerging challengers, all while ensuring the business cases for their projects are clearly articulated.
Chebbo is confident the industry will deliver, which is unsurprising given what energy providers stand to gain from the efficiency gains of digitisation. GE was able to reduce EDP’s asset and maintenance costs by €7 million per year, funds that are now being reinjected into building their renewable capacity.
“Yesterday I had a meeting where we talked about the changing focus on electrical vehicles. They no longer care purely about research, they care about innovation and how to get electrical to market. In the next 10 years, you will see things moving really quickly, as quickly as the telecoms industry has been moving – I’m confident about that.”