In a previous article, we commented on what digital transformation might be about, depending on the type of company you are – and in our last article, we commented on what might be expected of you as a company in terms of climate expectations. These expectations are probably most relevant for large companies; however, all have their role to play – and digitalization will in many ways contribute to reducing the world’s greenhouse gas (GHG) emissions. Some of these will be commented in the following.
Digital transformation can be a lot of things (refer e.g. previous article). In a micro perspective, it can be anything from implementing customer facing apps to restructuring your whole IT infrastructure – or changing all your business processes and business models – and the whole company culture.
In a macro perspective, i.e. with a national or global view, there are more fundamental challenges. Efforts required involve fundamental changes to the way we live and operate – and a main area is how we generate, use and manage energy. Typical climate initiatives in this area will include a change of energy sources, i.e. migrating from coal, oil and gas to “green energy” from solar, wind or water, increasing energy efficiency - and cutting down on energy usage.
Cutting down on direct emissions will obviously be important as well, be it from transportation, farms, production plants or otherwise. The main focus of this article, however, is how digitalization can help reducing GHG emissions and support the Paris agreement? Various organizations and companies provide useful material in this area, some of which include GeSI’s report on “Digital solutions for climate action”, GSM Association’s “Climate Action Handbook“, STL’s report on “How 5G can cut 1.7 billion tonnes of CO2 emissions by 2030” – and many more. By no means we will cover all the insight that is provided in any of these, however, I will offer some high-level perspectives.
While 5G can play an important role for other sectors ‘to go green’, the mobile industry itself is committed to taking climate actions to limit global warming to 1.5 °C as required by the Paris Agreement. In 2019, the mobile industry organization (GSMA) announced that its members would follow the Paris Agreement and reach net zero GHG emissions by 2050. In early 2020, GSMA announced that the overall mobile industry ambitions are GHG emissions reductions of 45 % by 2030 compared to 2020 as part of the decarbonization roadmap for the ICT industry facilitated by the Science Based Target initiative (SCBi) and described in this document.
Digitalization and ICT
In our earlier article digital transformation, we listed a number of examples of what digitalization might be about – and an important part of it was cloudification. While companies historically organized their IT infrastructure with large in-house computers and databases, cloud computing is the mainstream approach today – and has the advantage of dynamically being able to distribute processing load and storage across servers that, in principle, may be located anywhere – providing needed capacity and flexibility. It also separates hardware from software – and opens up for establishing large and general-purpose server parks or data centres.
The climate effect of this is that processing, and therefore energy, is used more efficiently – and thus there will be a positive climate effect. The use of large data centres will increase the energy use at specific locations, however, if the energy used is “green” at those locations (like in my country Norway), it will have an overall positive global climate effect. I would like to add, however, on the business side of this, that who will actually benefit from large local data centres can be debated. It depends a lot on the commercial and regulatory arrangements.
According to the Internet World Stats, 63% of the world’s population has access to the internet as of Q3 2020. Most of these are in North America (90%) and Europe (87%), however, Africa and Asia are only at 47% and 59%, respectively. On a global level, however, it means that 2.9 billion people in the world still do not have access to the internet. Most of these are in emerging markets with very low levels of industrialization and very poor electricity grids. It should be noted, however, that getting internet access to this 2.9 billion of people may have all the positive effects above – but it will also have the impact of increasing the total absolute GHG emissions – as all these people will start using more energy (mostly based on non-green energy sources). Improved energy management solutions and increased use of renewable energy sources will therefore be critical going forward – and through digitalization good solutions can be provided – e.g. through the use of Internet of Things (see mobile / wireless below), Artificial Intelligence (AI) and more.
Mobile / wireless
The potentially largest climate impacts from digitalization are likely to come from wireless technologies and applications. As I have been part of the mobile industry for all my life, I have been saying for years that “we are very lucky to be part of an industry that, by its pure existence, helps making the world a better place”. This goes for most areas of ESG, from social effects of giving people access to basic communication, to providing solutions for increased efficiency across sectors, providing jobs, supporting health, education, agriculture etc. See also the GSMA’s latest SDG Impact Report, reporting on how the mobile industry supports all of the UN’s 17 Sustainable Development Goals. Through mobile communication, there are also various examples on how operators help adapting to negative effects of climate change, e.g. by support humanitarian efforts around natural disasters, enabling home office solutions during the current pandemic situation etc.
One great example on how mobile can support climate ambitions is the growth of Internet of Things (IoT). In principle, connecting things does not necessarily need to be wireless, but for most relevant use cases it does. In general, connecting all kinds of things through wireless communication allows all things to communicate in a simple and (hopefully) out-of-the box manner – and this allows for a huge number of opportunities for saving energy. Some examples:
Smart homes, smart buildings, smart cities: Having all kinds of sensors in homes, buildings and everywhere sending signals to a management centre - and saving energy when not needed.
Intelligent Transport Systems (ITS): Having sensors in all kinds of vehicles or goods – e.g. improving public transport information, monitoring fleets, managing traffic flow, transport logistics and more – for optimizing transportation of people and goods.
Local energy management: Saving electricity from the macro-grid through micro-grids, e.g. local and renewable energy generation from heat pumps, solar etc sending energy back to the grid, using smart meters, local energy management solutions using energy whenever it is cheapest or when the grid load is lowest, and more.
Industry 4.0: Providing industry machinery with wireless connectivity for increased automation, improved communication and self-monitoring, e.g. through 5G or WiFi6.
Possibly also supported by IoT, establishment of smart electricity grids may also enable great energy savings, i.e. using real-time data and AI to balance supply and demand in the grid.
Wireless connectivity, in particular with high bandwidth, enables remote monitoring of production plants, homes or buildings – and with low latency, remote operation can also be a strong use case. Use of drones for monitoring will also be effective with high bandwidth and low latency. Remote monitoring or operation is expected to avoid travel and field work.
Smart apps for the support of various use cases are also important elements of digitalization. Examples of such can be smart health apps, smart education apps, etc – enabling people to get easy information or avoid travel. There are already also several smart transportation apps for car sharing, bike sharing, taxi rides etc. Smart agriculture apps optimizing production using fertilizers or managing life stock are very relevant. Another example in the agriculture area is optimization of the value chain through connecting all parties in the chain – e.g. like Farmforce here does. It has been claimed that 30% of food is wasted today (mostly in the supply chain – although also a lot through consumer behaviour).
What about 5G?
Digitalization is not necessarily about 5G – and neither is wireless. 5G is, however, a clearly improved cellular technology compared to previous G’s. It allows for a much higher density of IoT sensors – and it also provides a much higher bandwidth and a very low latency through URLLC (Ultra-Reliable Low–Latency Communication) which is strongly needed for many industrial applications – like Industry 4.0 and various other mission-critical applications. The same feature will also improve the use of Augmented and Virtual Reality (AR/VR), use of digital twins, drones and more – which will also assist remote operation – thus avoiding travel and field work – and also headcount. There could also be use cases for a digitally assisted field force.
The climate potential around 5G is great and, and the 5G standard has been designed with an objective of an 90% improvement in energy efficiency per unit of data (refer e.g. GSMA “Climate Action Handbook“). It should, however, be noted that the amount of data transmitted over 5G will significantly increase over current G’s – so in absolute terms, the energy consumption will still be a challenge. I also remember a statement from a senior executive from a very large mobile operator less than 2 years ago, one of the first to roll out 5G at scale, saying that “We need 3x no of base stations for 5G compared to 4G, power consumption is 3x more – and price is also 3x”. This was in an early phase and might have been somewhat tactical as well, however, it will obviously improve over time. It highlights the challenge, however. Therefore, every other area where energy can be saved, or energy efficiency can be increased, will be critical going forward!
It should be noted that increased energy consumption with increased data transmission is not only a challenge for 5G, however, but for every technology that transmits more data – simply due to the laws of physics, i.e. you can optimize any type of technology, but there is a limit to how much you can squeeze into the physical resources you have, be it time, frequency or space – and energy. Refer also our previous article on “5G will save the world – or will it?” with a reality check around 5G (and various other 5G-related articles).
The macro perspective
Using and managing energy have been key elements in this article – with a perspective on how digitalization can support it. However, the kind of energy we use, is also very important for climate change. In Norway, we are quite fortunate in the sense that almost all energy is renewable, mostly based on hydro-generated electricity - and more recently also from wind and solar.
In addition, most buildings in Norway are heated by electricity. This is not the case in other countries, where oil and gas boilers are widespread (in Norway these are banned these days). In the UK, on the contrary, the percentage of electrical energy used for heating is around 7%. Globally, electrification will thus be critical, not only for cars and other vehicles – but for the general use of energy.
Finally, although not necessarily very related to digitalization, cutting down on direct emissions will be important at a macro level, wherever they come from. This will require industries to collaborate with their partners – notably their direct energy suppliers and technology partners in the supply chain – to meet a “net zero” target. Also, Carbon Capture and Storage (CCS) initiatives will be important to achieve a net zero emissions result.
The intent of this article is not to be exhaustive in terms of all the positive benefits digital transformation and / or mobile communication can contribute with. It is rather to highlight the perspective that digital transformation (and 5G) will support the global climate ambitions - and also help in dealing with the challenges of climate change.
Therefore, if companies and governments want to contribute to saving the world from climate disasters, digital transformation and 5G are clearly important parts of the package!
OpenSky Consulting has competence in digital transformation and 5G – and also on climate change. We may be able to help ...