Cristian Colţeanu explains the Power of 1%

The industrial giant General Electric (GE) is to become one of the largest software companies during the next three years, while the industrial IoT will connect via more energy equipment and stations with the help of the Could techology, told energynomics.ro Cristian Colteanu, president & CEO GE for Romania, Bulgaria and the Republic of Moldova.

Major companies are making things simpler for their customers, and they adopt the new digital revolution wave bringing in the Internet of things (IoT) and instant information. What is GE‘s vision?

We are excited by the Industrial Internet (IIoT: Industrial Internet of Things), because it has the potential to help address some of the core economic issues that CEE is facing today: to deliver growth through increased competitiveness and to create more value-added technology. The key in GE’s transformation is Predix, the world’s first and only industrial-grade cloud platform built for the industrial world, launched by GE in February 2016. Predix is leveraging on big data analytics and helps GE customers across the power generation, power distribution, healthcare, automotive, chemical, transportation, oil and gas and manufacturing industries to increase efficiency of their high value assets.

Another example of a step forward we took towards leading the digital transformation in the industry sector is the very recent decision (Oct. 31st, 2016) of GE and Baker Hughes to enter into an agreement to combine GE’s oil and gas business and Baker Hughes. This creates a world-leading oilfield technology provider with a unique mix of service and equipment capabilities. The “New” Baker Hughes will be a leading equipment, technology and services provider in the oil and gas industry with USD 32 billion of combined revenue and operations in more than 120 countries. By drawing from GE technology expertise and Baker Hughes capabilities in oilfield services, the new company will provide physical and digital technology solutions for customer productivity.

How can we tackle the major challenges of the transition in the energy sector towards a low-carbon economy: access to sustainable energy, climate-change mitigation and the rational use of resources?

The energy market faces the challenge to navigate between three objectives – security of supply, limitation of environmental impact and economic sustainability. In CEE, it’s a particularly tough challenge for two reasons: 52% of total power in CEE comes from coal and 76% of plants in CEE are more than 30 years old.

In this context, and considering that over 25% of the global energy is generated using GE equipment, we asked ourselves: What if we can harness the full potential of the ‘Industrial Internet’ to the energy sector in CEE and what if we were to connect all turbines and boilers to a single data center in the Cloud, thereby delivering just a 1% improvement in performance through big data analysis and plant optimization?

There will be a profound impact on all three of the energy market’s core challenges. As regarding the security of supply, it is estimated that the Industrial Internet could improve the efficiency of power plants by 1-2%. Even at the bottom end of this estimate, it therefore delivers 6MW more power from a 600MW plant. If replicated, this could be an important contribution towards ensuring the security of supply. Limiting the sector’s environmental impact: This also has a significant impact on CO2 emissions as every 1% improvement in efficiency reduces CO2 emissions by 2%. Economic sustainability: The potential cost savings are impressive too. Power utilities worldwide could save roughly USD 60 billion in 15 years if the efficiency of all power plants increased by just 1%. This is why we call it the “Power of 1%”.

In Oil & Gas we are harnessing the power of data to help our customers make better and quicker decisions and to make their operations and equipment as productive and efficient as they can be. This is driven by oil and gas digital applications made possible by GE’s cloud-based Predix platform for the Industrial Internet.

Aside from the very recent agreement between GE and Baker Hughes, within GE Oil & Gas, we’ve also launched a Digital Solutions – a transformative move that brings together all of the digital capabilities from across the business into one organization. GE Digital Solutions will work closely with the partners in “big GE” in San Ramon with GE’s Software Center, the expertise of GE’s global IT and commercial software teams, and the industrial security strength of Wurldtech, a Canadian GE Company acquired in 2014. We estimate that the industrial Internet will bring productivity gains of USD 8.6 trillion for industrial companies in the next 10 years – more than twice of the future value of the consumer Internet.

By 2020, more than 100,000 software developers will be building apps on Predix, and generating some USD 225 billion in economic value. The industrial-app economy will generate a rapidly growing number of Industrial Internet apps, accelerating the pace at which efficiency gains can be delivered.

How will digitalization affect the Romanian market in terms of players, consumers, the way business is done and how the interaction with consumers takes place?

GE’s current strategy focuses on digitalization, in all our activity lines, which implies a strong focus on energy efficiency, smart grids and the Internet of Things (IoT). Innovation is the foundation of our business model, bringing benefits to us and our stakeholders. Digitalization will re-shape the world as we know it, all layers included, bringing business and consumers close to one another as never seen before. Businesses in Romania will have to readapt to the demands of the digital consumer.

At GE, we have started this revolution way ahead. GE expects to become a USD 15 billion software business in four years, which would make the company one of top ten software companies worldwide, up to 2020.

How about the GE investments and figures in Romania?

By pairing digital technology with its domain expertise across industries like aviation, energy, healthcare and transportation, GE is transforming itself into the world’s leading digital industrial company. The Industrial Internet is profoundly transforming global industry and infrastructure, connecting machines, big data analytics, and people.

We are committed to the local market, as we cannot ignore Romania is turning into a key digital hub of the region. We are engaged to hire a further 700 digital specialists across the region over the next two years. Of these, more than 200 are software engineers that will be hired in Romania. We already hired 100 specialists in the first six months of the year in our offices in Bucharest. 40 more will follow until the end of the year, mostly highly skilled IT specialists.

All our activity lines have been aligned to the digital profile, while innovation is the foundation of our business model, bringing benefits to us and our stakeholders. To this purpose, we will continue hiring software specialists, adding a total of 100, in 2017. As such, we are building on our extensive industrial footprint in CEE with the best software brains the region has to offer.

Our main business indicator is our contribution to Romania’s exports, which amounts cca. 100 million USD yearly, and remains constant this year, as compared to 2015.

How do you see the Romanian energy mix in the future, considering that you said in the past that you don’t believe in Cernavoda 3 and 4, Tarnita hydro power plant and other mega-projects?

No matter the resources from which it is produced, energy continues to play a fundamental role in the national and international economy.

The way forward for the energy sector is responsibility (towards people, communities, the environment), through technological advance and digitalization.

A recent relevant example is the Ledvice lignite power plant in the Czech Republic: the supercritical boiler provided by GE is helping the plant to reach an efficiency of 47% (global average is at 33%), which means a considerable reduction of CO2 and other emissions. This is the latest technology for CEE region and will be implemented in multiple other power plants comparable in size to the Czech one. This is a gradual evolution, but GE is already taking significant steps in this direction, including in Romania.

We are looking forward for Romania’s energy strategy to be completed, to have a long term view and to allow Romania to contribute to energy security, enable the modernization of infrastructure, and further integration with the European market and interconnections with neighboring countries

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The full version of this article can be read in printed edition of energynomics.ro Magazine, issued in December 2016.

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Bogdan Tudorache

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