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As the world strives to meet ambitious climate goals and reduce carbon emissions, the need for innovative solutions, strategic partnerships and sustainable investments is more critical than ever. By leveraging technological advancements, securing regulatory support and engaging in cross-sector collaboration, these stakeholders can not only drive the transition but also unlock new growth avenues and ensure a resilient and sustainable energy future. The energy transition is not only a necessity for combating global warming, but also an opportunity to drive growth and create new industries and jobs.
Contrary to previous expectations, Europe has emerged as a leader in driving the energy transformation, surpassing the United States in both activity and innovation with funding of power, biogas and energy storage. Europe’s status also has been propelled by investments from the Middle East, with several energy giants from that region on track to become major backers.
Russell Reynolds Associates recently hosted the 16th installment of its Energy Matters series, welcoming Laura Fleming to discuss the extensive potential for cross-sector collaboration and how the transition to renewables is not just a climate imperative but an opportunity for multiple industries.
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Laura Fleming Country Managing Director, Hitachi Energy Ltd. (UK) |
Laura Fleming is the country managing director in the UK and Ireland for Switzerland-based Hitachi Energy Ltd., leading the company’s strategic direction, operations and growth in one of the world’s most dynamic energy markets.
Laura joined Hitachi Energy in July 2022, bringing over 20 years of leadership in the development and commercialization of large-scale renewable and infrastructure projects in the UK and Europe. Before joining Hitachi, she spent 10 years with Spain-based Siemens Gamesa Renewable Energy SAU (SGRE).
Laura is on the board of RenewableUK and is a member of the Onshore Wind Taskforce, formed by Ed Miliband, the UK’s secretary of state for energy security and net zero. Laura’s primary motivation is to make the world a better place for everyone through collaborative and systemic thinking, which enables the creation of sustainable communities and the delivery of clean, affordable power for all.
Originally from the Netherlands, Laura holds a BSc in town and country planning from Utrecht University and a masters’ degree in economic development from Glasgow University.
By 2050, electricity will need to meet 50% of global energy demand, according to the International Energy Agency. Those involved in the energy transition, including government and business, have focused on increasing generation capacity. The next step is to prepare the grid system for renewable energy. In some countries, including the UK and several in Western Europe, this is a significant challenge, with legacy systems requiring both new builds and retrofitting.
Retrofitting the grid and building new transmission systems is a huge opportunity, ensuring not only that the world sustainably transitions to renewable electricity, but also that the manufacturing sector is re-energized as equipment demand surges. Laura shared that Hitachi Energy alone is spending $8 billion globally on new investments and growing its workforce by 15,000. The UK government is one of the most ambitious globally in terms of its commitment to decarbonizing the grid, pushing toward a net-zero system by 2030. With other governments to follow suit, the opportunity for the energy equipment sector is significant and stretches beyond solar and wind turbine manufacturers.
Grid systems need to be both modernized and digitized to allow for the flow of renewable energy. The new ways in which consumers and businesses use electricity—such as electric vehicles, batteries and solar panel—require an integrated approach to create efficiencies. These new technologies, which will accelerate the path to net zero, will put additional pressure on the grid. Digitization and the use of artificial intelligence in areas such as predictive maintenance and energy monitoring are crucial in transforming how companies can better serve customers while remaining competitive and efficient.
For established electricity producers and suppliers, the urgency to innovate has led to a significant increase in software and digital technology startups, many of which are scaling up operations. At the same time, established companies such as Hitachi, France-based Schneider Electric SE, and many others are capitalizing on these software innovations and create new revenue streams from energy-as-a-service solutions.
Emerging technologies have enabled productive collaborations among energy companies, technology leaders and research institutions. These alliances are motivated by a shared drive to innovate and implement sustainable energy solutions, capitalizing on the distinct strengths of each partner. Partnerships allow businesses to balance the deployment of resources between core activities and new business areas, reducing the financial risk of unproductive investments.
One example is the partnership between Switzerland’s ABB Ltd. and Finland-based Coolbrook Oy. The two technology companies established a collaboration to reduce industrial greenhouse gas emissions through electrification. The partnership builds on ABB’s brand and strengths in industrial automation and Coolbrook’s innovative electrification technology, powered by clean energy, to drastically cut the CO2 emissions in steam cracking. The new product has direct application in hard-to-abate sectors such as chemicals, cement and other asset-heavy industries.
Long-term technology and software collaborations help accelerate a product’s journey from proof of concept to implementation. An example is the partnership between Germany’s Uniper SE and Microsoft in the United States. Uniper gains access to the latest innovations in software and artificial intelligence, including learnings from other sectors, and Microsoft has opportunities to pilot its latest tools and leverage Uniper’s AI lab.
Effective partnerships can transform ways of working and lead to innovation and cost savings among developers and suppliers. Laura addressed Hitachi Energy’s innovative partnership with SSE PLC and Equinor ASA on the Dogger Bank wind farm project. They have adopted a program model rather than going project by project. As a result, Hitachi Energy was able to standardize ways of working and bring lessons to the next project. This has been successful in looking at the delivery of Dogger Bank A to Dogger Bank B. It has led to deeper customer relationships for Hitachi Energy and accelerated the delivery of a crucial energy project.
As the energy sector grows, companies are feeling the pressure to transform and innovate to meet future needs. The future of energy will be digital, as companies need to offer greater connectivity options to customers, as well as to allow for various actors in the energy ecosystem to interact. This is to support grid efficiency, energy storage and distributed generation to meet demand and remain efficient and profitable. New jobs have been created to support emerging business models.
The challenge is not just identifying people for new positions, but onboarding them into organizations and taking advantage of the synergies within diverse teams of established leaders and disruptive thinkers. The energy sector needs to work hard to position itself as an employer of choice—not just for engineers, but also for technology, policy, finance, and legal professionals. For companies to transform and thrive, they will need to embrace new technologies and ways of working.
As energy transition reshapes the sector, energy company boards and leadership teams need to foster a culture of innovation and collaboration, highlighting their commitment to change in order to attract leaders from a variety of sectors. As this transition accelerates, the energy sector has an opportunity to become the hub for the most innovative thinkers and leaders.
Chris Nicholson is a senior member of Russell Reynolds Associates’ Global Industrial & Natural Resources Practice, covering the Energy markets. He is based in London.
Abigail Skerrett is a member of Russell Reynolds Associates’ Global Industrial & Natural Resources Practice and leads the firm’s Global Energy Transition Practice. She is based in London.
Irina Dascalu is a member of Russell Reynolds Associates’ Global Industrial & Natural Resources Research team. She is based in London.
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