Turn of time

With the mis­si­on state­ment of the All Elec­tric Socie­ty, Phoe­nix Con­tact descri­bes its stra­te­gic ori­en­ta­ti­on for the next deca­de. Roland Bent, CTO and mem­ber of the manage­ment board of Phoe­nix Con­tact, exp­lains how much more than just a slo­gan reso­na­tes in the­se three words.

Roland Bent, Chief Tech­ni­cal Offi­cer Phoe­nix Con­tact

Roland Bent is one of the for­ma­ti­ve per­so­na­li­ties of the last deca­des at Phoe­nix Con­tact. A gra­dua­te in elec­tri­cal engi­nee­ring, he has been working for the Blom­berg-based com­pa­ny sin­ce 1984 and has been a mem­ber of the manage­ment board sin­ce 2001. In addi­ti­on to mar­ke­ting and pro­duct deve­lop­ment, he is respon­si­ble for inno­va­ti­on and tech­no­lo­gy manage­ment. He is also in char­ge of Cor­po­ra­te Tech­no­lo­gy & Value Chain, Tool­ma­king and Metal Parts Pro­duc­tion, Qua­li­ty Stan­dards & Com­p­laint Manage­ment and the inter­na­tio­nal rese­arch and deve­lop­ment cen­ters.

UPDATE: Mr. Bent, a com­ple­te­ly elec­tric com­pa­ny – what is behind this visi­on and what was the rea­son to make it the mis­si­on state­ment for the next ten years of Phoe­nix Con­tact?

The All Elec­tric Socie­ty descri­bes a future in which rege­ne­ra­tively gene­ra­ted elec­tri­cal ener­gy as the pri­ma­ry form of ener­gy is avail­ab­le world­wi­de in suf­fi­ci­ent quan­ti­ties and com­ple­te­ly eco­no­mi­c­al­ly.

The­re were several rea­sons why we made this visi­on our gui­ding princip­le. On the one hand, of cour­se, a pro­ver­bi­al new deca­de in which we have star­ted. And not only on the calen­dar, but also with a new manage­ment team. And in the first half of this deca­de, 2023, Phoe­nix Con­tact will be 100 years old. But the­se are just the basic con­di­ti­ons that fit. Much more important to us were the con­cre­te tech­no­lo­gi­cal and soci­al chan­ges that we all face tog­e­ther. What will our com­pa­ny be like in the com­ing deca­des? What do we stand for? What exter­nal impul­ses do we take up and how do they influ­ence our actions?

UPDATE: You anti­ci­pa­te the ques­ti­ons. What are the impul­ses that lead to the mis­si­on state­ment of the All Elec­tric Socie­ty?

Car­bon dioxi­de, the use of fos­sil fuels, cli­ma­te chan­ge – the rele­van­ce of this glo­bal chal­len­ge can no lon­ger be igno­red. How we deal with it – that will be the respon­si­bi­li­ty of the who­le of huma­ni­ty, but it will also affect us as a com­pa­ny. The trend has been clear for a long time, but in the mean­ti­me con­cre­te mea­su­res to com­bat cli­ma­te chan­ge must be incor­po­ra­ted into our busi­ness activi­ties.

Cli­ma­te chan­ge will deter­mi­ne our time. This is a glo­bal com­mit­ment, mani­fes­ted in the Paris Cli­ma­te Chan­ge Con­ven­ti­on. And it has long sin­ce also been expres­sed in eco­no­mic terms, at the latest sin­ce the Com­mit­ment of Lar­ry Fink, the boss of Black­Rock, one of the lar­gest finan­ci­al inves­tors, who will only invest in sustainab­le tech­no­lo­gies with his huge fund. This atti­tu­de leads to dra­ma­tic chan­ges.

UPDATE: What exac­t­ly does the term All Elec­tric Socie­ty mean?

Cou­pled with the ques­ti­on of how clean ener­gy can be made avail­ab­le in suf­fi­ci­ent quan­ti­ties is the issue of the gro­wing world popu­la­ti­on. By 2050, we expect the glo­bal ener­gy demand to increa­se by 50 per­cent. At the same time, 850 mil­li­on peop­le today alrea­dy have no access to any form of elec­tri­ci­ty at all. The hun­ger for ener­gy will increa­se dra­ma­ti­cal­ly. And the solu­ti­on to this dilem­ma can­not lie in ren­un­cia­ti­on alo­ne, i.e. saving ener­gy. It must and can only be done tech­no­lo­gi­cal­ly, only with new inno­va­tions.
Now we come into play as tech­no­lo­gy lea­ders, becau­se tech­no­lo­gy is not the pro­blem, but will be part of the solu­ti­on. Digi­tiza­ti­on is one of the keys to sol­ving the pro­blems. We are firm­ly con­vin­ced of this.

UPDATE: Just the digi­ta­li­za­ti­on? Phoe­nix Con­tact sees its­elf as the “Digi­tal Indus­tri­al Com­pa­ny”. But aren’t our “ana­log” tech­no­lo­gies also indis­pensable when it comes to the All Elec­tric Socie­ty?

The All Elec­tric Socie­ty builds on com­pre­hen­si­ve elec­tri­fi­ca­ti­on, net­wor­king and auto­ma­ti­on. The­se are all core com­pe­ten­ci­es of our com­pa­ny, based on our DNA of con­nec­tion tech­no­lo­gy, elec­tro­nics in short, con­nec­tivi­ty. Of cour­se, the­se remain our basis, the­re is no ques­ti­on about that. But in com­bi­na­ti­on with our ever-increa­sing com­pe­ten­ci­es in digi­ta­li­za­ti­on, they beco­me a power­ful tool for sol­ving tasks.
An examp­le from our cur­rent pro­duc­tion: We digi­ti­ze con­trol cabi­nets as soon as they are crea­ted, working with a digi­tal twin. In this way, we drasti­cal­ly sim­pli­fy the pro­ces­ses for our custo­mers from plan­ning to assem­bly. In this way, know­ledge and pro­duc­ts of the ana­log world, i.e. the very clas­si­cal ter­mi­nal tech­no­lo­gy, mer­ge with digi­tal tech­no­lo­gy and crea­te com­ple­te­ly new pos­si­bi­li­ties.

UPDATE: How sen­si­ti­ve is the com­mit­ment to the All Elec­tric Socie­ty with regard to poli­ti­cal neu­tra­li­ty, to which Phoe­nix Con­tact actual­ly feels com­mit­ted? Isn’t it unusu­al for our com­pa­ny to take such a socio-poli­ti­cal stand when popu­lists vehe­ment­ly deny cli­ma­te chan­ge?

First of all, we fol­low the sci­en­ti­fic fac­ts and not the poli­ti­cal opi­ni­ons. We will not start to mis­sio­ni­ze. We will syn­chro­ni­ze with the fac­ts, and the­se have been adop­ted by 185 sta­tes at the latest with the Paris Agree­ment on Cli­ma­te Pro­tec­tion. To put it brief­ly: Cli­ma­te pro­tec­tion is the new norm. Cli­ma­te chan­ge and the need to com­bat it is a fact that is reflec­ted in poli­ti­cal and eco­no­mic mea­su­res world­wi­de. We must decar­bo­ni­ze our eco­no­my. And we sha­re this point of view, and we are right to do so. The pur­su­it of ener­gy will con­ti­nue to be a cen­tral task for the world’s popu­la­ti­on in the future. But clean ener­gy, i.e. ener­gy from rene­wa­ble sources, is still a rare com­mo­di­ty. But this is chan­ging in leaps and bounds. And this demand will be unstopp­a­ble and will beco­me one of the big­gest eco­no­mic dri­vers, that is a fact.

UPDATE: Which tech­no­lo­gies will be decisi­ve?

The star­ting point is the ener­gy of the sun, which, in the form of radia­ti­on, wind and water, will be the dri­ving force behind the All Elec­tric Socie­ty, becau­se it can be used to gene­ra­te and use almost unli­mi­ted amounts of elec­tri­cal ener­gy. Howe­ver, in order to have the fluc­tua­ting ener­gy pro­duc­tion of natu­ral resour­ces con­ti­nuous­ly avail­ab­le, we need the pos­si­bi­li­ty to store the gene­ra­ted ener­gy and trans­port it over lon­ger distan­ces. Power-to‑x plays a cen­tral role here, i.e. the con­ver­si­on of elec­tri­cal ener­gy into gaseous or liquid ener­gy car­ri­ers, such as hydro­gen. This will be a cen­tral fac­tor on the road to the All Elec­tric Socie­ty.

Hydro­gen pro­duc­tion from rene­wa­ble ener­gies

The aim will be to make rene­wa­ble ener­gy even more cost-effec­tive. Howe­ver, it can alrea­dy be seen today that one kilo­watt hour can be four to five cents per kilo­watt hour when gene­ra­ted using solar ener­gy, which is in the same order of magnitu­de as when gene­ra­ted on the basis of coal. In addi­ti­on, howe­ver, one ton of CO2, extra­po­la­ted, cau­ses dama­ge of around 180 euros. This cor­re­sponds to an addi­tio­nal 15 cents/kWh for coal-based elec­tri­ci­ty. So far, the­se are not inclu­ded in the pro­du­cer pri­ces, becau­se the­se costs are bor­ne by the com­mu­ni­ty.

But we must make rene­wa­ble ener­gies even more eco­no­mi­c­al and use them more effec­tively. We need eco­no­mies of sca­le that bring down costs. This can only be achie­ved through a holistic approach from the genera­ti­on to the con­sump­ti­on of ener­gy – the sec­tor cou­pling.

UPDATE: What is hid­den behind this term?

If we want to imple­ment rene­wa­ble ener­gy eco­no­mi­c­al­ly, we need impro­ved ener­gy effi­ci­en­cy across the ent­i­re value chain, i.e. from pro­duc­tion, trans­mis­si­on and sup­ply to con­sump­ti­on, and this in all ener­gy-pro­du­cing and ener­gy-con­suming are­as of life and the eco­no­my.
Hither­to, the­se are­as, the sec­tors, have been con­si­de­red sepa­r­ate­ly. But when we com­pre­hen­si­ve­ly elec­tri­fy the sec­tors, net­work them with each other and auto­ma­te them holisti­cal­ly, then we speak of sec­tor cou­pling.

As alrea­dy men­tio­ned, the­se are the core com­pe­ten­ci­es of Phoe­nix Con­tact, and this is whe­re we are tech­no­lo­gi­cal­ly at home. We the­re­fo­re out­line our active task as “Empowering the All Elec­tric Socie­ty”, i.e. making this visi­on of the future pos­si­ble. We do not build solar sys­tems, we do not have any power grids, ener­gy sto­rage sys­tems or Power to X sys­tems. We want to enab­le our custo­mers to use our pro­duc­ts and solu­ti­ons to net­work sec­tors both elec­tri­cal­ly and in terms of data tech­no­lo­gy in order to crea­te a smart, intel­li­gent con­trol sys­tem for the ent­i­re chain.

UPDATE: How do we inte­gra­te our custo­mers from the pro­cess and che­mi­cal indus­tries as well as the raw mate­ri­al extrac­tion of tra­di­tio­nal indus­tries into the visi­on of the All Elec­tric Socie­ty?

We also have to make the­se indus­tries “smar­ter” and have been doing so for a long time. Clas­sic petro­che­mi­cals will con­ti­nue to be indis­pensable for a long time to come, also in dri­ve tech­no­lo­gy. Oil, coal, gas – it is not yet pos­si­ble wit­hout them. But we are alrea­dy making a signi­fi­cant con­tri­bu­ti­on to ensu­ring that the­se valu­able raw mate­ri­als can be used more effi­ci­ent­ly. This is just as important for indus­try as it is for the envi­ron­ment.
And our part­ners from the­se indus­tries are them­sel­ves active and invol­ved in new fields, just think of the deve­lop­ment of hydro­gen tech­no­lo­gy or bat­te­ry sto­rage tech­no­lo­gy. Tog­e­ther with our custo­mers, we are brea­king new ground.
In fact, howe­ver, in the future we will increa­singly iden­ti­fy are­as whe­re we will streng­t­hen our role and our efforts. And the­re will be are­as whe­re we see no future and will redu­ce our com­mit­ment.

UPDATE: If ener­gy is avail­ab­le in suf­fi­ci­ent quan­ti­ties and its pro­duc­tion is com­ple­te­ly eco­no­mi­c­al – won’t the issue of ener­gy effi­ci­en­cy beco­me irrele­vant again?

It will take qui­te a lot of time until it is rea­dy. And it is pre­cise­ly ener­gy effi­ci­en­cy that is a topic with which we can make a signi­fi­cant con­tri­bu­ti­on today to the con­ser­va­ti­on of resour­ces and also to the imple­men­ta­ti­on of the All Elec­tric Socie­ty. And this will remain the case and will con­ti­nue to set tech­no­lo­gi­cal stan­dards in the future.
But yes, once the All Elec­tric Socie­ty has beco­me a rea­li­ty, the con­sump­ti­on of ener­gy will no lon­ger have such a nega­ti­ve impact. Then mobi­li­ty will be pos­si­ble wit­hout a guil­ty con­sci­ence – an appe­aling idea, isn’t it?

UPDATE: What time frame do you expect for the imple­men­ta­ti­on of the All Elec­tric Socie­ty?

The Del­phi stu­dy on the future of ener­gy sys­tems in Ger­ma­ny, Euro­pe and the world fore­casts a signi­fi­cant step towards the rea­li­za­ti­on of this visi­on by 2040. This stu­dy is based on the sur­vey of 80 renow­ned experts and thought lea­ders from deve­lo­ping, emer­ging and indus­tria­li­zed coun­tries and their assess­ment by 350 inter­na­tio­nal experts.
This is not so long in com­ing. And that gives me, that gives us hope, both in terms of the future pro­s­pec­ts for Phoe­nix Con­tact and for all of us.

Empowering the All Elec­tric Socie­ty

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