Digitalization of the energy sector will combat climate change
Hanno Schoklitsch, CEO, Kaiserwetter
Despite the United States’ controversial exit from the Paris Climate Agreement, renewable energy capacity has increased by more than any other technology and clean energy has never before been in higher demand.
Kaiserwetter, an international service provider for renewable asset management, urges the international community in the context of COP23 to continue to make progress from the COP21 and COP22 advances in the global efforts to stop global warming. Our core message is that the renewable energy transition is only possible with the help of digitalization. Digitalization enables investors in the energy sector to maximize the return on investment and to minimize the risk of their renewable energy investments.
Renewable energy is key in the fight against climate change
The depletion of fossil fuels and the socio-environmental degeneration that they cause has sparked the need for a profound energy revolution. The energy sector is in a necessary state of transformation that opens up a large potential for investment.
Since the 1990s, the clean energy sector as a whole has continued to grow year on year, a positive trend which contrasts with other energy sources like coal and nuclear in the electricity generation sector. In fact, investment in renewables is even on the rise in two of the most prolific polluters on the planet; investments increased by almost 20 per cent from 2014 to 2015 in the United States, a figure surpassed only by China.
The active expansion of renewable energy is the only way to achieve international commitments. The rise of renewables is not only beneficial to the environment, but also the economy, with a recent industry study demonstrating that global GDP would increase by over 1 per cent to about US$1.3 trillion if the market share of renewables were doubled by 2030. However, this will only be possible if renewable energy investors can rely on investment security, professional risk management, and standardised portfolio management for their assets, from anywhere and at any time. To do this, all we need is the Internet and the capability to analyze smart data.
Investment in renewables is fundamental
The influence of the major market players has shifted following the commitments adopted by the international community since the Paris Agreement and endorsed in Marrakesh at COP22, yet, to increase investment in the sector further pledges from all relevant parties are required. Today, governments and increasingly international investors are actively participating in the renewable energy sector, drawn in by their determination to fight against climate change and their commitments to the Paris Agreement. This increase in investor appetite has led to record purchases of renewable assets, such as wind farms and solar parks, reaching the highest-ever figure of US$72.7 billion, according to Bloomberg New Energy Finance’s ‘Global Trends in Renewable Energy Investment 2017’ report.
However, a true paradigm shift is needed, from both new investors, as well as parties already involved in energy investments, to transform the energy sector towards renewable energy power generation. The moment is now, and whilst energy transition has an important role for renewable energy to remain an attractive field for private investor groups, digitalization is the axis on which the revolution in this sector revolves.
Digitalization unlocks the potential of renewables
Digitalization is the inevitable revolution for the renewable energy sector by using the possibilities of Internet of Things (IoT) and smart-data-analytics. Along with a solid digital infrastructure, IoT allows access to data almost anywhere in the world. Successful data analysis can also help investors (banks, funds, etc.) to increase the productivity of their assets. If anything can encourage the financial community to further their investments, it is the promise of lowest risks and highest performance.
In light of this, Kaiserwetter has launched ARISTOTELES, a digital platform designed to simplify the executive level of investment companies, financial institutions and financing banks to monitor and manage its renewable energy portfolios. It aims to minimize the risk in renewable energies while maximizing the return on investments. ARISTOTELES integrates the possibilities of Internet and Things (loT), smart data analytics and predictive data simulation by combining technical and financial data.
Executive level dashboards display all parameters and KPIs at a click on any kind of device, which allows executives to know if and how the invested capital is yielding a return on investment, regardless of the means of production. Due to the advanced technology in use, ARISTOTELES captures the data of every asset around the globe.
The digitalization of power generation and energy asset management by using IoT and smart-data-analytics offers unexpected opportunities in boosting the expansion of renewable energies. Bottom line: ARISTOTELES is the answer to ensuring capital investments in renewable energy on a global basis by maximizing returns and minimizing risks.
ABOUT THE AUTHOR
Hanno Schoklitsch is CEO and founder of Kaiserwetter Energy Asset Management. He is a civil engineer and holds a Master’s degree from the University of Graz (Austria) in Business Administration. As a civil engineer, he is specialized in the construction of hydro power stations, which gives him the basic understanding of energy assets. Mr Schoklitsch started his career within real estate investment companies and headed the second largest German open-ended real estate fund. His professional experience brought him to understand the potential of digitizing asset management. Utilizing smart data and the Internet of Things (IoT) is key to taking advantage of the digitization within the renewable energy sector. Since the creation of Kaiserwetter Energy Asset Management, Mr Schoklitsch and his team have worked to develop a digital platform and tools supporting renewable energy investors, maximizing their performance.