Schneider Electric Goes Really Green

Oct. 8, 2010
While Square D safety switches, circuit breakers, load centers and motor controls make up a big chunk of Schneider Electric’s core market basket, the company has expanded way past this electrical base and into the world of energy management solutions

While Square D safety switches, circuit breakers, load centers and motor controls make up a big chunk of Schneider Electric’s core market basket, the company has expanded way past this electrical base and into the world of energy management solutions. That’s the key message that Paris-based Schneider Electric wanted to drive home to the 40-plus business editors attending an all-day press conference on Sept. 28 in Chicago.

While Schneider has doubled its sales in the past four years, Jeff Drees, the company’s new U.S. president, told the editors that Schneider’s real future lies in becoming an energy management specialist that links its green products together to provide its customers with a one-stop total solution for all of a building’s energy needs. In addition to its familiar electrical products, this $22 billion company, which has more than 100,000 employees in over 100 countries, is a major player in the UPS and industrial controls markets and has growing positions in energy-efficient lighting, HVAC and building automation, security, solar and electric vehicles.

It’s a grand vision that doesn’t always include electrical distributors and reportedly puts Schneider at the “big-boy” table for discussions with companies like Google, Amazon and IBM on how electricity will be generated, used, saved, sold and transported over the next two decades. Key to Schneider Electric’s vision is selling its energy solutions by talking in dollars-and-cents to CFOs, accountants and other financially minded buying influences at customers. “‘Green’ has never sold a product,” said Drees. “You have to convert it to the financial payback generated for the customer.”

Some of its progress in the green arena may be rather sobering for distributors, contractors and the design community. Drees said Schneider now handles some of its largest turnkey retrofit projects direct because customers want a single point of contact for some large-scale projects. However, Schneider Electric’s executives said distributors, contractors and designers will still play a huge role in the design, sale and installation of green electrical products because of the sheer size of the opportunity at hand. They look at a typical commercial building built over the past 10-20 years and know their products and systems can help the building owner slash energy usage by up to 40 percent.

“It’s easy to save 20 percent in a building,” said Barry Coflan, senior vice president, Offer Development, Buildings Business. “It takes a little work to get to 30 percent to 40 percent.”

In addition to helping customers save energy now in new and existing buildings,

Schneider Electric executives and other speakers at the press event offered their opinions on where the sales opportunities will be 20 to 30 years into the future. In a wide-ranging presentation on the macroeconomic global implications of the green market and the smart grid, Aaron Davis, chief marketing officer, said half of the world’s energy demand will come from China and India by 2030, and that electric vehicles may one day generate more power than they use and that car owners could channel excess electricity onto the smart grid and sell it.

He also said Germany’s Munich Reinsurance (Munich Re) is investing the Desertec solar project in North Africa that may one day provide much of Europe with massive amounts of electricity from miles of thermal photovoltaic installations because its management team believes over the next few decades global warming will cause massive ocean flooding of coastal development — generating billions in insurance claims. They believe a project of this scope could help cut down on greenhouse gases and claims.

One of Schneider’s customers also took the long-range view with an intriguing two-word answer to the question about where green movement is ultimately headed: self sufficiency. As owner and founder of Palladium Technologies, Ft. Lauderdale, Fla., a provider of integration and automation systems for some of the world’s largest yachts, Michael Blake knows all about the need to be self-sufficient when sailing the ocean without a port nearby to refuel. And because he lives in Fort Lauderdale, where many homeowners have back-up generators if hurricanes knock out power, it’s understandable when he says, “The end game is self-sufficiency.”

That’s a pretty interesting answer when you think of the billions utilities and the government plan to spend to rebuild the U.S. electrical grid and develop utility-scale wind farms and PV fields. If homes and businesses could one day produce most of their own power with PV panels, fuel cells and other sources of decentralized power, you wonder how it would affect the utilities that spend billions on upgraded facilities and distribution systems to produce power centrally and transport it over thousands of miles of transmission lines to the point of use.

– Jim Lucy, Chicago