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In part two of our Energy Transition Talks conversation with Helena Jochberger, CGI’s Global Industry Lead for Manufacturing, she and Peter Warren share insights from their industries, emphasizing the advantages of cross-industry collaboration, the need to integrate renewable energy sources and the evolution of ESG principles in business strategy. Organizations worldwide face sustainability challenges, but this discussion reveals that innovative thinking and networks that transcend traditional industry boundaries are driving collective progress.

The convergence of energy and manufacturing industries is increasingly evident as both sectors embrace sustainability and technology innovation to address global challenges. As these industries align their strategies toward decarbonization and efficiency, valuable opportunities emerge to identify shared learnings, goals and practices for a more sustainable future.

Material passports: The key to transparency

Helena highlights the significance of tools like material passports in tracking CO2 emissions and resource origins, which aids in achieving shared sustainability goals across industries. These passports provide transparency in emissions reporting, similar to energy certificates that track energy provenance.

Collaboration in the automotive sector

The automotive industry, particularly in Europe, exemplifies this trend through initiatives like Catena-X, which fosters collaboration among diverse stakeholders to enhance supply chain traceability and drive innovation in electric vehicle (EV) production and battery localization.

Decarbonizing steel: A renewable revolution

Looking at the steel industry's decarbonization journey, Peter and Helena highlight the importance of integrating renewable energy sources. Helena notes that steel manufacturers are not only producing metal products but are also investing in upstream energy solution, such as acquiring wind farms and hydrogen production facilities, to secure clean energy. This approach reflects a shift towards broader adoption of sustainable practices in response to global challenges.

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In the latest episode of our Energy Transition Talks series, Peter Warren and Daren Rudd discuss the critical role of the insurance industry in supporting low carbon energy projects. They explore how innovative insurance solutions can help manage risks associated with new technologies, the importance of data sharing between the energy and insurance sectors, and the potential for future collaboration to enhance risk management and reduce costs.

The transition to sustainable energy depends on major investment in innovative technologies including wind farms, solar, and hydrogen and battery storage. The success of these types of capital-intensive projects often depends on having insurance in place to help manage the inherent risk of financing large low carbon energy projects.

The insurance industry has a long history of innovation that aligns with the way the energy market is transitioning. Lloyds of London, explains Daren, was originally established to insure trade ships travelling to India. Likewise, in the late 1890’s the company that insured the Chicago World Fair—the first to be fully powered by electricity—established the standards and the analysis for energy and electricity assets going forward.

“For a couple hundred years, we've been very innovative in terms of coming up with new mechanisms and ways of working to insure and allow these big programs and these innovative new industries to grow…Insurers and the industry can work together to deliver a better result, particularly where innovative new things are working.”

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Shaping the future of the hydrogen economy: Ports, collaboration and sustainability

In the latest episode of Energy Transition Talks, Derek Marinos discusses the critical role of ports in the hydrogen economy with experts Dr. Magali Amiel and David van der Ploeg. They explore the current state of hydrogen as a low carbon energy source, the supply chain challenges in production and distribution, and the infrastructure developments being implemented by port authorities. The conversation highlights the importance of collaboration among stakeholders and the impact of market forces and geopolitical considerations on hydrogen's growth and adoption.

The promising potential of hydrogen for decarbonization

Hydrogen has long been recognized as a low-carbon energy source and now is considered crucial for decarbonizing hard-to-abate sectors, including heavy industry and transportation.

Significant investments are being made to scale hydrogen deployment in these challenging industries, plus successful proof of concept (POC) projects and trials in both sectors are leading to tangible impacts in the transition to hydrogen solutions. Sustainability remains a key driver of the global demand for hydrogen.

The key roles of ports and infrastructure in the hydrogen ecosystem

Ports are vital in the hydrogen ecosystem, addressing transportation, storage and distribution, and logistics and infrastructure challenges. From a storage perspective, ports are already well-positioned to serve as regional and international hubs for hydrogen supplies, thanks to their expert solutions developed via handling oil and other commodities.

[Wow factor: The European Union has set ambitious targets for hydrogen adoption with ports projected to account for more than 40 % of annual hydrogen demand by 2050. ]

Establishing a hydrogen supply chain is essential for transitioning to a low-carbon economy, especially for sectors difficult to electrify, like shipping and heavy transport. Key challenges include:

• Production Costs: The location of hydrogen production relative to ports affects transportation logistics.
• Storage Requirements: Hydrogen's low energy density necessitates larger storage facilities, which can be complicated by urban proximity and safety regulations.
• Distribution Infrastructure: International collaboration is needed to create effective pipelines and transport systems for hydrogen.

To build the necessary infrastructure, advancements in technology are vital, as existing pipelines for crude oil cannot be used for hydrogen. Regulatory consistency across regions is also essential to facilitate international trade. A notable initiative is the Hydrogen Alliance between Canada and Germany, aimed at establishing a robust international hydrogen supply chain by July 2024.

The need to forge alliance to shape the future

The hydrogen economy is poised for significant growth, driving the need to unite all players in the hydrogen ecosystem to share information, build trust and collaborate with industrial users for effective integration, especially in the current geopolitical climate. The quality of the hydrogen and the quality of relationship between the stakeholders will significantly shape what is possible in the future.

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Data-driven futures: Revolutionizing energy infrastructure

CGI’s annual Voice of Our Clients (VOC) global research gathers insights from both existing and potential clients, revealing key priorities for executives across industries. In the latest episode of Energy Transition Talks, Peter Warren sits down with Helena Jochberger to discuss the overlapping areas of focus revealed by data for both the Energy & Utilities and Manufacturing industries.

The Energy and Utilities framework—specifically in the upstream, midstream and downstream segments of oil and gas—often includes the chemical industry. However, Peter shares, CGI classifies it as part of Manufacturing, due to its process-driven nature.

Helena agrees, highlighting that in the chemical sector, where various recipes and ingredients are involved, effective Manufacturing Execution Systems are essential for managing complex processes that rely on numerous formulas. In the Manufacturing sector, she says, it's important to distinguish between two terms:

· Discrete Manufacturing: Involves producing physical products that require energy.

· Process Industry: Comprises energy-intensive sectors like metals, mining, and chemicals.

Focus on sustainability: Climate change impact on industries

One significant insight from the CGI 2024 Voice of Clients (VOC) report Helena highlights is that, like Energy & Utilities, industries such as metals, mining and pulp and paper are notably prioritizing energy transition, climate change and sustainability initiatives.

Specifically, the mining industry has a particularly high impact rate at 89% and the pulp and paper sector follows closely at 80%. Helena notes that the pulp and paper industry historically uses biofuels like black liquor for energy, showing a commitment to decarbonization despite ongoing climate challenges.

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Empowering energy decisions: AI meets Data Mesh

In part two of their Energy Transition Talks conversation, Doug Leal and Peter Warren dive deeper into the concept of Data Mesh and its impact on organizational structure. Specifically, they examine how Data Mesh enables business agility and AI innovation while necessitating a cultural shift, robust data governance and collaboration between IT and the business.

Data Mesh represents a significant cultural shift in how organizations manage and use data. Traditionally, data ownership has resided within IT departments, but Data Mesh advocates for decentralizing this ownership to various lines of business teams.

Doug highlights the four key principles of Data Mesh:

1. Domain-Oriented Decentralized Ownership: Data is no longer solely owned by IT; instead, it allows teams closest to its creation to take ownership and responsibility for its quality and reliability.
2. Data as a Product: Organizations are encouraged to treat their data sets as products, prioritizing data quality, usability, and timeliness, while focusing on how they can create value from them.
3. Self-Service Data Platforms: With multiple domain-oriented data platforms emerging, automation is key, and teams need to ensure these platforms are user-friendly and efficient. The goal is to remove bottlenecks and accelerate data sharing and collaboration.
4. Federated Computational Governance: This model supports governance tailored to specific domains rather than a one-size-fits-all approach, allowing for more relevant oversight.

The transition to decentralized ownership empowers business teams to take control of their data, fostering agility and responsiveness to market needs. However, it also increases their responsibility. Data governance is paramount for Data Mesh! It ensures data quality and security across decentralized domains, fosters trust and consistency in data usage, and balances autonomy.

Importance of data quality in Data Mesh

“Data quality is still a cornerstone of a Data Mesh platform,” Doug says, explaining that developing this domain-based data architecture requires a robust data quality framework. This involves ensuring data traceability and conducting rigorous quality checks for accuracy, completeness and consistency so organizations can build trust in their data.

Collaboration between technologists and business stakeholders is essential for identifying the most accurate truth as organizations integrate multiple source systems into their Data Lakehouse. This foundation is also critical for future advanced analytics, machine learning, and AI initiatives.

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In the latest episode of our Energy Transition Talks series, CGI Vice-President, Consulting – Data and Analytics Doug Leal discusses with Peter Warren the evolving landscape of data use in the energy and utilities sector, particularly in light of new AI applications. In the first instalment of this two-part conversation, they explore the challenges of scaling AI models, the move away from experimentation toward practical solutions and two key approaches to data management: the Data Lakehouse and the Data Mesh—both of which are shaping the future of data strategies’ success.

Utility organizations are facing increasing pressure to leverage data effectively for decision-making. This involves the integration of various data sources, such as Advanced Metering Infrastructure (AMI) and outage management systems, to enhance operational insights. While some organizations are already progressing in this area, Doug says, many are still in the early stages of their data journey.

Doug and Peter discuss two distinct approaches to AI: one that treats it as a novel tool to explore, and another that focuses on practical problem-solving. The latter, Doug says, is essential for developing a strategic approach to AI implementation, ensuring that solutions are not only effective for immediate challenges but also adaptable for future developments

“We need to be able to build a model or any type of AI solution in a way that will enable the organization to scale—not only scale that model for production, but also for everything that comes after that model, the innovation that comes after that model.”

The challenge of transitioning from proof of concept (POC) to production

Typically, a business unit recognizes the potential of a technology or model and decides to invest further. However, without a well-defined operational process to transition from proof of concept (POC) or proof of value to full production, this can create significant challenges and bottlenecks.

As Doug shares, only 53% of models successfully progress from POC to production, making it an expensive endeavor when roughly half fail to deliver results.

Shifting focus to Minimal Viable Products (MVPs) and practicality

Peter agrees, citing a current client’s approach that skips the POC entirely, jumping ahead to develop minimal viable products (MVPs) right away. He explains their strategy involves creating solutions that are aligned with their organizational goals and can be effectively scaled. This ensures that the IT team can support the growth of these products and that the business can derive tangible value from them.

Doug has also noticed a shift in mindset among clients. As he sees it, there’s a growing emphasis on how to effectively transition ideas into production rather than just experimenting, reflecting an increased understanding of the importance of assessing the real value and return on investment for these initiatives. Given the substantial costs associated with infrastructure, data scientists and machine learning engineers required for model development, organizations are increasingly cautious about treating these efforts as mere experiments.

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In the latest episode of our Energy Transition Talks series, CGI Global Industry Lead for Health and Life Sciences Ben Goldberg joins Peter Warren to discuss the interdependence between healthcare and energy systems, emphasizing the need for a balanced approach to ensure a healthy society. Specifically, they examine the interplay between ecosystems and supply chains, the emergence of smart, “green hospitals,” and how data innovation and digital twins are driving sustainable, resilient healthcare.

Digital twins and “triplets” in healthcare

While hospitals play a vital role in healthcare, they often contribute significantly to emissions due to aging infrastructure and inefficient buildings. For example, Ben points out that many hospitals have been around for decades, and while some modernization efforts have been made, they are still not energy friendly. This, he says, is an opportunity for new technologies to enter the mix.

Notably, digital twins—which create digital representation of physical assets—have gained traction in healthcare. Moving beyond just monitoring energy consumption, digital twins offer compelling use cases, such as providing visibility into the patient journey and help address outcomes. As Ben highlights, the ability to mirror the physical world digitally through digital twins has numerous facets and opportunities within the healthcare sector.

Sharing a term coined by Diane Gutiw, a leader in AI and digital twins at CGI, Peter raises the use cases for “digital triplets,” referring to using three interconnected digital twins:

1. A twin modeling the patient’s health and wellbeing
2. A twin modeling the operations of the healthcare facility itself (energy use, HVAC systems, etc.)
3. A third twin analyzing the causes and effects between the first two twins.

This model allows for optimizing not just patient care, but the facility's energy efficiency and sustainability as well. For example, Ben and Peter discuss the fact that "green hospitals" are being built globally to produce their own electricity and hydrogen fuel, while using digital twins to intelligently control heating, cooling, lighting, and more based on patient occupancy levels.

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In part two of the Energy Transition Talks discussion between Eurelectric’s Head of Energy Policy, Climate and Sustainability Paul Wilczek and CGI expert Peter Warren, they turn their focus to the opportunities and challenges of localized energy production, the role AI and new technologies play in balancing decentralized power grids and the long-term benefits of decarbonizing and electrifying the energy sector.

The renewable energy surge in Europe

Localized energy production and renewable energy is increasing, as energy and security of fossil fuels coming from more volatile regions face increased disruption and costs. Referencing various studies, projections and European Commission publications, Paul indicates that the deployment of renewable energy sources—particularly solar photovoltaic (PV) and onshore/offshore wind power—is expected to experience a massive surge in Europe across all scenarios.

As Paul explains, this rapid growth in localized renewable energy production offers several advantages:

· Homegrown electricity production: Europe will have a significant portion of its electricity generated domestically, reducing dependence on imports from potentially unreliable foreign partners, thereby enhancing energy security and supply reliability.

· Decarbonization: Renewable energy sources like solar and wind are carbon-free, contributing to the decarbonization of Europe's electricity sector.

· Price predictability: Domestically produced renewable energy can provide more predictable and stable power prices, reducing volatility associated with imported energy sources.

At the same time, he points out, the projected surge in renewable energy deployment presents challenges too: such rapid growth also necessitates addressing the challenges of variability and the need for substantial investments.

The role of AI and new technologies in managing the energy system efficiently

While traditional energy generation like hydroelectric power will continue to play a role, Peter says, the major shift towards renewable but volatile sources like wind and solar impacts not just the volume of energy produced, but also the frequency and grid balancing when the sun shines or wind blows. New technologies, he suggests, will play a supporting role in transitioning to distributed energy resources (DER) production.

Paul agrees, suggesting that a decade ago, few predicted the current dominance of wind and solar energy. Technologies like biomass and geothermal were expected to have a bigger role. However, the plummeting costs of wind and solar have made them the clear winners for now.

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