EV batteries offer an ‘incredible store of energy,’ Schneider Electric North America President says

Schneider Electric North America President Aamir Paul joins Yahoo Finance Live to discuss tech innovations, the road to a clean energy-based economy, working with homebuilders, and the outlook for EVs.

影片文字轉錄稿

- Here to discuss the energy transition is Aamir Paul Schneider Electric North America President. We also have Yahoo Finance's Julie Hyman here joining in the conversation. A big welcome to you both. So first, Aamir, when people are looking at this as a not just a nice to have, you talk about the companies that choose to integrate digital and sustainable transformation in the value chains 2.5 times more likely to be among the best performing businesses than those who don't. Why is it still then seems to be such a hard sell?

AAMIR PAUL: First of all, I think it's actually becoming something people are more convinced they have to do. And the conversation has gone from should we to how do we. So I'm actually quite optimistic that it is becoming something more people are investing in. If you look at the last couple of years, we have to have empathy that a lot of people were dealing with seismic issues in supply chain and production and demand variability.

And so it's coming out of that and putting a parenthesis at the end of the COVID effort and starting this new effort, knowing that we have to begin now to have effect over the next decade. If you look at Europe, they've had to be forced, unfortunately due to the war in Ukraine, to do in 18 months what we have a longer time frame to do. So it's about taking advantage of that opportunity. But I'm actually seeing a lot more companies lean in and pivot from should we to how do we.

JULIE HYMAN: I'm curious, Aamir, what are some concrete examples of what exactly we're talking about here. So what does digital tech and climate? Are we talking smart thermostats, light sensors, things like that. And I imagine it also gets more sophisticated than that. So what does it look like?

AAMIR PAUL: Look, that's a great example. I'll give you two use cases. One in your home and one for industry. So in your home, imagine that you go from being just a user of energy to a prosumer, a producer and consumer of energy. What does that look like? Well, it starts with you get solar panels. Now you're producing energy.

Now if you get batteries, you start storing it. Now if you get an EV with a bidirectional charger, your car is also a consumer of the energy, you create it through your solar panels, but also a source of storing that energy. Now inside the home when you choose as a consumer, you can take loads like your gas cooker, and make that electric.

So as you electrify the home, owners have this real control about becoming producers and users of energy and using technologies like VPP programs and the right policy, they can sell that energy back. So at CES Consumer Electronics Show earlier we demonstrated an app where you can put your home into Make Me Energy mode Save Me Energy mode and Prepare for a Storm. mode. And that's an example of what we find in terms of smart energy and sustainable solutions.

Now you go to a factory environment, we have a factory in Lexington at 64 years old. It makes panel boards which go into homes. And we ask the team to use digital technology to see where they could find ways. So the first step is to use digital to survey where you're spending your energy. Then it's to decarbonize using things like microgrids, solar solutions, PPAs. And finally it's to make sure that you are automating your processes.

So the combination of those things over three years has made that a world economic forum lighthouse factory. It's saved 25% of its energy usage, 30% of its water usage, and is on its way to being one of our most productive facilities. So not only is it more energy efficient, but the raw efficiency means that we can actually do more even with the higher labor cost structure. So those are two examples of the journeys we give people.

JULIE HYMAN: And just a quick follow on the consumer side. So you mentioned the app. Where else does Schneider sit in that process? Where do you participate, and what has been the uptake for something like that app?

AAMIR PAUL: So lots of different places, right? So if you look at the core infrastructure with are squared E-products, that we've been part of the electrification of homes in America for a very long time. In fact, 4 out of 10 homes in this country have our content in them. So we work with the large builders like DR Horton and KB Homes to build those solutions out.

Today, if you went about an EV, you would generally get a service solution from a company QMerit. QMerit is a Schneider partner and a company we've invested in. And they will send an electrician out. So they'll match the demand of the user sort of like an Uber experience with a certified electrician that'll come out and help you deploy the solutions for your new EV but also talk to you about battery storage and solar.

And then lastly, we do that at a community level. One of the more exciting projects we had was with KB Homes. And it's a Department of Energy funded demonstration project, where the entire community of 200 homes is grid independent. So even if the grid has an outage, that community with the microgrid can continue to operate. And we see that distributed energy will be a big part of that.

So we operate at the atomic level. We operate at the solution level with OEMs. And we operate at the community level.

- And Aamir, I want to hone in on the EV space here because a lot of people when they think of investing, they're thinking know perhaps just the cars, the vehicles themselves, or perhaps the solar technology, but you're talking about digitizing really throughout the ecosystem of an EV. Break that down for us.

AAMIR PAUL: Well, if you think about it, the EV-- and GM and others have talked about this. GM recently talked about becoming an energy company. Tesla's talked about that. Why is that? Because the battery in your EV offers an incredible store of energy. Now there are some practical use cases.

If you want to be in a weather event, do you want to just discharge your one mechanism of going to a safer place, so how will people use that is a different conversation. But can we make sure the physics allow for the store of electricity in your car to also be available to your home. That's entirely possible. And bidirectional charging is what makes that happen.

And so more and more people can start thinking about their entire energy resilience. And the EV as a part of that equation. And some of these cars are being marketed with that, which makes sense.

JULIE HYMAN: I want to circle back around to something Rochelle asked about. And you said you know, Europe has sort of been forced to move more quickly because of what's been happening with the energy landscape there. I mean, you've definitely seen emergences here I think of Texas in particular and--

AAMIR PAUL: California.

JULIE HYMAN: Exactly. Being an issue. You know, and I know you have obviously a business case to make for this. But just also from a grid resiliency case, do regulators need to be more forceful on this front? I know there's been stimulus in this direction. But does there need to be more to push the US in that direction?

AAMIR PAUL: I think a lot is being done. And I think we're encouraged by it. I think what would be interesting is to make it easier for distributed energy resources to come into play. So we're actually speaking to the DOE about these things. And one of the things we talk about is how to make sure that interconnects are easier to put in, permits move faster. Sometimes permitting is taking five years.

And if you think about the Europe example, right, a permitting process that takes five years would not survive a crisis like they've had to go through. So how do we get that urgency in changing our system? And then there is obviously some concerns from the existing utilities about their economic structures and their models, especially in regulated environments.

So I think those are the areas. The interesting thing is already exists. That is not our barrier. The economics of the technology are getting better every day. And the cost curves are coming down. It is now a policy condition to allow for a new business model to come into play. And I think that's where we are. And if we can move faster there, that would certainly be encouraging.