Industryweek 1428 19383 Neil Rasmussen

Executive View -- Energized for Efficiency

June 16, 2009
Neil Rasmussen is helping Schneider Electric pursue its ambitious agenda of becoming a global leader in energy management -- and working to save the planet in the process.

Neil Rasmussen has an electrical engineer's fondness for statistics and formulas, and the numbers he shares with audiences these days are startling. Currently, 28 billion tons of carbon dioxide (CO2) are being emitted into the atmosphere each year. By 2050, it is projected that figure will rise to 54 billion tons without any substantial technology changes.

"The scientists are telling us that the best analysis says we have to hold the line at 450 ppm [atmospheric concentration of CO2] in order to guarantee that we don't have massive climate change, such as melting the ice sheets in Antarctica and Greenland," says Rasmussen. That would require cutting emissions tenfold, to 5 billion tons annually. Such a drastic reduction represents both an enormous societal challenge and a huge business opportunity for Schneider Electric. With $23 billion in sales and 114,000 employees operating in more than 100 countries. Schneider is in the process of focusing its operations to become an energy management solution provider for customers in four business areas: power, industry, buildings and IT.

While Schneider Electric officials acknowledge the role of renewable energy in helping to solve the looming climate change crisis, they say the most productive course is to focus on energy management. They point to a recent comment by U.S. Secretary of Energy Dr. Steven Chu that "the most dramatic reductions in greenhouse gas emissions will come from energy efficiency and conservation." Clearly, there's plenty of opportunity. Some 44% of greenhouse gas (GHG) emissions come from the operation of buildings and plants, few of which go through a commissioning process to help tune their disparate systems for energy efficiency.

Neil Rasmussen
Chief Innovation Officer
IT Business Unit
Schneider Electric

"When there is out-of-the-box energy management functionality for buildings, our customers will view that as an innovation. Our role is to figure out how to get there."

Rasmussen says efforts to make buildings, data centers and plants more energy efficient are in their infancy. Schneider Electric's broad line of electrical distribution and automation and control products and expertise, he believes, offers it a key role in helping customers monitor and reduce energy consumption, but the company only represents one piece of the puzzle. "There is a whole ecosystem of providers that will be necessary to achieve this," he says. "We don't generate power and we don't make end-use equipment, but we do a lot of things in-between that have a huge impact on energy use -- things that decide when to turn on and off equipment, things that decide if the equipment is sick and needs to be replaced, and things that distribute power efficiently."

Citing a McKinsey study that 73% of users will disregard energy-efficient investments with a payback time above two years, Rasmussen says regulators have concluded that free-market solutions alone cannot solve the GHG problem. Energy efficiency standards and regulations are being developed around the world, and, he notes, "They will dramatically affect the behavior of businesses."

Developing highly efficient buildings will require a new approach to their design and construction, he says. "Instead of buildings that are each a unique expression of a craft industry art, we need to make it more of an engineered science that improves over time," he observes. That will require open standards for specifying building requirements and designs that integrate multiple building subsystems. It is a huge job, but in Rasmussen's view, "absolutely central to any forward-looking organization."

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