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Gobbling Up Energy Costs with the IIoT

Nov. 27, 2019
What’s essential to preserve the planet is increasingly good for the bottom line.

When you’re weighing the pros and cons of launching an IoT strategy, add in to the pros: survival of your company, your family, and the planet.  The possibilities may surprise you: what can be essential to preserve the planet is increasingly good for the bottom line.

While there are other IoT components that simultaneously boost profitability and cut your environmental impacts, the most compelling is that the IoT allows previously impossible-to-achieve precision in every aspect of your business. That’s because, as I’ve emphasized in previous columns, in the past we could never obtain—or, equally important, share—real-time data about how things actually operated in the field. That meant we had to guess how products worked and then adjust machinery after the fact. That meant we tolerated a lot of waste in energy and materials that harmed both the environment and the bottom line.

We must be firmly grounded in the facts of global warming to appreciate the need for immediate and dramatic action. The situation is undeniably perilous—and getting worse, not better. No responsible company can remain on the sidelines.

In November, The UN Environment Program (UNEP) 2019 Emissions Gap report said we’re actually creating even more emissions now than a year ago, rather than making progress toward the goals set in the 2015 Paris Agreement. That confirmed the 2018 findings from The Intergovernmental Panel on Climate Change (IPCC), the United Nations agency evaluating climate change science (considered the leading objective expert on the issue),  that  “global warming is likely to reach 1.5°C [compared to pre-industrial levels — the stretch goal under the Paris Agreement] between 2030 and 2052 if it continues to increase at the current rate.” The levels are already higher than that in some areas—two to three times higher in the Arctic.  The 2018 report called for “rapid, far-reaching and unprecedented” changes to reduce emissions. Even at that level, the likely results would include increases in: “mean temperature in most land and ocean regions … hot extremes in most inhabited regions … heavy precipitation in several regions … and the probability of drought and precipitation deficits in some regions….”   

And it’s simply no longer responsible to listen to the “deniers” who claim (without scientific evidence) much of the change is natural: the objective UN experts conclude nearly 100% of the increase is man-made.

The time for debate on this issue is long since passed. The time for action is now.

Leading companies worldwide are already acting to cut their impacts, which will be even more important if the Trump Administration succeeds in withdrawing the U.S. from the Paris Accords. Most tellingly, Climate Action 100+, a global coalition of leading global investors managing more than $35 trillion in assets, has targeted 161 major “focus companies,” collectively responsible for more than two-thirds of global industrial GHG emissions and having a combined market capitalization more than $8 trillion, pressuring them to act. In response:

  • 70% have set long-term emissions reduction targets.
  • 77% have defined board level responsibility for climate change.

However, there’s a big gap between rhetoric and action: only 9% have emissions targets meeting (or exceeding) the Paris minimum goal to keep the rise to below 2°C.

The Internet of Things will play a key role in meeting these targets and in cutting your operating costs and increasing your profits. You can have your (solar-baked) cake and eat it too!

Smart energy         

In the short term, reducing energy use, especially through the rapidly developing “smart grid" approach, is probably the most productive, since it requires relatively little corporate expenditure. Smart meters at the factory and sensors on equipment precisely measure and relay real-time demand data, then the grid dispatches precisely the amount needed. The smart grid alone can cut emissions by almost 4% by 2030.  That win-win potential increases because the smart grid facilitates integrating renewable energy, plug-in hybrid vehicles and energy efficiency innovations

Even more promising: the Gates-funded solar startup Heliogen recently announced a breakthrough that may allow it to generate heat more than 1,000 degrees Celsius. That means Heliogen plants could potentially replace fossil fuels currently needed for heavy industrial plants, particularly in industries such as steel, petrochemicals, and cement, which collectively produce more than 20% of global carbon emissions.

That would not only reduce global warming significantly, but also probably reduce corporate utility bills.


It’s hard to think of an aspect of industrial operations that could have more benefits for companies and for reducing global warming than transportation, which accounts for  15% of carbon dioxide emissions.  The opportunities include every transportation sector:

  • Freight Rail. One of the first examples of profitable IoT use I wrote about was the Union Pacific, which has cut bearing-related derailments by 75% with infrared sensors every 20 miles along the track, trackside microphones “to listen for growling bearings,” and, for its biggest and heaviest coal trains, taking ultrasonic images to see inside the wheels. Even though it currently runs on polluting diesel, rail is inherently efficient, carrying 40% of U.S. freight ton miles while producing only 6% of U.S. freight emissions.
  • Shipping. Shipping is still something of a black hole in terms of technology, with 48 large ships lost last year, many ships simply out of touch while at sea, and even still using paper-based manifests. IoT-based precision location systems could both increase shipping efficiency and reduce emissions. CargoMetrics, for example, plans to hoover up all shipping data, including GPS, cargo manifests, and satellite tracking to create a precise, real-time picture that could “… help shippers find more fuel-efficient routes, which in turn could make an enormous impact on global emissions and freight pricing.”
  • Aviation is the transportation sector that probably is the best demonstration to date of the IoT’s ability to both affect profitability and reduce emissions through precision, as I’ve detailed frequently in the past.  The key is a combination of many sensors mounted on jet turbines (up to 5,000 on one Pratt & Whitney model), real-time analytics, and M2M applications that apply the analyzed data in near real-time to maximize efficiency. It not only reduces emissions by cutting fuel use, but also allows the turbine companies to fundamentally change their business models through “predictive maintenance.” It makes the turbines so dependable that the manufacturers can switch from sales to leasing them, with the price based on “power by the hour” generated, a win-win for customers and the manufacturers.


Agriculture illustrates how the IoT can address a specific industry’s needs in ways that, again, pay off for companies and reduce global warming reduction.

Unacceptable numbers of people already go hungry today, and there will be as many as 10 billion people by 2050, requiring a 2/3 increase in farm production to feed them.  The United Nations doesn’t wait that long to redress the situation, making ending hunger while making farming sustainable as the second highest (after ending poverty) of its Sustainable Development Goals for 2030, while warning that, “Right now, our soils, freshwater, oceans, forests and biodiversity are being rapidly degraded. Climate change is putting even more pressure on the resources we depend on, increasing risks associated with disasters, such as droughts and floods.”

Again, the IoT offers a range of tools that can make farming more precise through real-time monitoring, to take better advantage of the dwindling resources, especially water, that we still have, leading to more profits and less impact.

Pago Aylés, producer of some of the best Spanish wines, uses IoT technology from Libellium to accurately measure every aspect of grape growing. More than 100 sensors in the vineyard, measure “water air and soil temperature and humidity, and environmental pressure, as well as rainfall, wind speed and direction,” so the vineyard can not only irrigate precisely when and where water is needed, but also do advanced analysis of factors such as biological cycles, pests, and diseases that couldn’t be documented in the past, allowing them to project future production. The vineyard says wine quality has improved 30% using the sensors and Libellium’s Agrimés program.

More broadly, even small farms can now use auto steering to guide tractors on a precise, predetermined path, with benefits ranging from reducing topsoil erosion to avoiding costly and environmentally dangerous overlap of fertilizer and pesticides. It can be retrofitted on older tractors, a very important consideration since many companies are reluctant to invest in the IoT if it means scrapping durable heavy equipment that might have many years of remaining use.

No column about win-win IoT strategies to reduce environmental impacts and increase profitability could omit the most dramatic example of all, the Siemens “Factory of the Future” in Amberg, Germany. The IoT lets the company achieve an eye-popping 99.9985% quality rate, cutting its waste generation and boosting profitability. And the environmental benefits? Siemens used its MindSphere IoT platform to analyze its energy consumption,  helping the company “find inefficiencies and fix them. The result: within weeks the factory was saving thousands of euros” in energy costs.

Global warming isn’t a myth. It’s here, it’s a crisis, and — as Mr. Einstein liked to say, “you can’t solve a problem by the same thinking that created it.” The IoT, because of the unprecedented precision that it allows you to achieve, will help you boost profits while you do your part to save the planet.

What could be better?

W. David Stephenson, principal of Stephenson Strategies (Millis, Massachusetts), is an IoT consultant and thought leader. His The Future Is Smart (HarperCollins Leadership), is one of the first books on IoT strategy.

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