Internet of Things, a key lever to reduce CO 2 emissions

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1 COP21 Internet of Things, a key lever to reduce CO 2 emissions November 13 th, 2015

Exponential technologies combined with Internet global model drive a new industrial revolution: the Internet of Thing Internet of things drivers

/GB Internet of Things 50bn objects connected to the web in 2020 : Magna Data +3Bn individuals connected in 2014 Peering & net neutrality

2 Exponential technologies combined with Internet global model drive a new industrial revolution: the Internet of Thing Internet of things drivers Exponential technologies #of sensors +33% yoy # sensors Bandwidth cost -25% yoy /Mbs Computingcost -33% yoy /transistor Storage cost -38% yoy /GB Internet of Things 50bn objects connected to the web in 2020 : Magna Data +3Bn individuals connected in 2014 Peering & net neutrality Infrastructure mutualization Interoperability Platforms Internet global model Source: HIS, KBPC, Internet world stats, A.T. Kearney A.T. Kearney / COP21 2

3 Combined with Big Data, IoT offers 4 key levers for asset optimization and energy savings Levers of energy savings with IoT 4 Full system automation Driver At full system level, objects interact, communicate and adapt autonomously how they operate to optimize their energy Example Ex: Autonomous control system of vehicles and road traffic in a city centre 3 Real time objects energy optimization Big Data algorithms analyse current and historical data regarding the use of objects and optimize in real time how they operate Ex: Real time optimization of aircraft engines based on data collected by thousands of sensors 2 Objects energy Monitoring and Control Sensors continually collect data on objects energy to provide a rigorous analysis Remote control of objects based on elementary rules to prevent energy waste Ex: Connected thermostat allowing heating remote control 1 Asset transparency Connected objects provide transparency over existing assets availability to maximize their use Ex: Car sharing platform to pool car rides Source: A.T. Kearney A.T. Kearney / COP21 3

Under current conditions, IoT could lead to a +200 Mt decrease in CO 2 emission, being ~23% of the 2030 objective CO 2 emissions objective and IoT impact (in Mt of CO 2, EU28) Assuming no other

4 Under current conditions, IoT could lead to a +200 Mt decrease in CO 2 emission, being ~23% of the 2030 objective CO 2 emissions objective and IoT impact (in Mt of CO 2, EU28) Assuming no other change in energy mix or pattern COP 21 Objective IoT 2 Opportunities % 1 Cop 21 objective for EU28 members : a 40% decrease in CO 2 emissions compared with 1990 emissions (4 170Mt). 2 Internet of Things 900Mt represents the current effort, i.e. the difference between current CO 2 emissions (3400Mt) and 60% of 1990 CO 2 emissions (2500 Mt). Sources: Ministère de l'écologie, du développement durable et de l'énergie, A.T. Kearney A.T. Kearney / COP21 4

5 Mobility and Housing should be the main contributors to CO 2 emission reductions IoT impact on CO 2 emissions by economic sector (2025 Vs. 2015) (in Mt of CO 2, EU28) 32,8 3,2 45,6 57,8 ~210 Mt of CO 2 69,7 Mobility Housing Industry & Services 1 Smartgrids Public Administration Total Note: Assuming no other change in energy mix or pattern 1 Savings on transportation cost in supply chain and decrease in energy for lodging, retail and telecom companies (data center) Sources; Eurostats, A.T. Kearney A.T. Kearney / COP21 5

6 In particular, Car sharing, Automotive telematics and Smart Home are the 3 use cases with highest opportunity Energy savings related to IoT, by sector (in Mt of CO 2, EU28) Use Case Main drivers of energy savings Mt CO 2 Mobility Car sharing Automotive telematics Traffic jam reduction Aircraft telematics Note: Assuming no other change in energy mix or pattern Source: A.T. Kearney Real time localisation allowing journey pooling Data collection and analysis for an optimal drive and fuel savings Vehicles coordination and rerouting itinerary to smooth traffic, Data collection and analysis for an optimal jet fuel Subtotal total Mobility Housing Smart Home Data collection and analysis for an optimal energy (heating and lighting) Industry and Services Smart grids Public Administration Energy optimisation Smart logistics Smart grid Smart gas Telecoms : data centres etc. Retail : Heating and cooling systems etc. Lodging and catering : heating and cooling systems etc. Logistics: connected truck fleet to optimize journeys and fuel Subtotal Industry and Services Smart grids optimizing output, distribution and of electricity Smart grids optimizing output, distribution and of gas Subtotal Utilities Street light control An optimised lighting system, reducing unnecessary street lighting 3,2 38,0 25,2 3,4 3,0 69,7 57,8 34,5 11,1 45,6 21,6 11,2 32,8 Total ~210 A.T. Kearney / COP21 6

7 The Mobility sector presents an emission reduction potential of ~70 Mt of CO 2 through 4 levers Energy savings related to IoT (in Mt of CO 2, EU28) Mobility Use case Objet Scope 2025 potential benefit Mt CO 2 Care sharing Automotive telematics Vehicle equipped with GPS Vehicle equipped with telematics (sensors) 0,72 vehicle per household, generating 475,5Mt of CO 2 annually, linked to fuel Overall European CO 2 emission linked to fuel is 475,5 Mt Decrease in # of vehicle per household using care sharing by 64% 8% of vehicles taken off the streets Vehicles equipped: 58% Decrease in fuel by 10% 38,0 25,2 Traffic jam reduction Aircraft telematics Vehicle partially or totally automated Sensors network in the plane and its engines 33h spent yearly in traffic jam by an average European driver, generating 8,5 Mt of CO 2 Total European jet fuel generates 151 Mt of CO 2 Traffic jam duration reduced up to 40% in 2025 through Autonomous Cruise Control, Platooning, intelligent signalling and eventually autonomous driving Aircraft equipped: 100% Jet fuel reduced by 2% on average 3,4 3,0 Total 69,7 Sources: INSEE, ACEA, CCFA, CEBR, Inrix, A.T. Kearney A.T. Kearney / COP21 7

Energy savings in Smart Homes and could reduce up to 15% household energy Evolution of the Smart Home Housing Security Remote monitoring Access record Intrusion detection Example: AT&T Digital Life

environmental impact Example: Netatmo, Nest Home devices Fire alarms Self stocking fridges Remote heating Example: Samsung smart home Impact on energy savings Technology Thermostats, lighting control

8 Energy savings in Smart Homes and could reduce up to 15% household energy Evolution of the Smart Home Housing Security Remote monitoring Access record Intrusion detection Example: AT&T Digital Life or Gigaset Elements Entertainment Content everywhere Multi-screen Remote control Example: Sonos; Apple, Samsung Connectivity Energy/Utility Reduce energy usage Reduce risk of damage Limit environmental impact Example: Netatmo, Nest Home devices Fire alarms Self stocking fridges Remote heating Example: Samsung smart home Impact on energy savings Technology Thermostats, lighting control panels Sensors: temperature, motion, luminosity Algorithms combining sensor information, historical data and preferences Mechanisms Learns user behaviour Programs itself Turns to Auto Away mode Remote access from mobile Saving opportunity 2025 Current yearly CO 2 emission per European household is kg Overall saving opportunity: 57,8 Mt of CO 2 - Expects 15% saving opportunity - Adoption by 50% of Households Note: Assuming no other change in energy mix or pattern Sources: INSEE, Eurostats, A.T. Kearney A.T. Kearney / COP21 8

9 Between 10% and 18% of energy consumed by service industries could be saved with IoT Energy savings related to IoT (in Mt of CO2, EU28) Industry &Services CO 2 emissions l inked to energy (Mt of CO 2 ) 239 Mt Retail 79 Mt Lodging 15 Mt Telecoms Smart Logistics 185 Mt Total Main optimization levers Heating and cooling systems Heating and cooling systems Data centres Engines IoT opportunities Energy reduced by 10% Energy reduced by 10% Energy reduced by 18% 10% of fuel saved 60% of trucks equipped (2025) Note: Assuming no other change in energy mix or pattern Sources: INSEE, Eurostats, A.T. Kearney A.T. Kearney / COP21 9

10 In addition IoT will enable the emergence of a more sustainable and the facilitation of renewable energies Non estimated IoT impacts on carbon footprint Towards an economy of usage, requiring lower resources Internet of Things enables renewable energies IoT will shift an economy based on mass and ownership towards a more sustainable model of use and full utilization of all assets This shift will lead to a reduced carbon footprint as a result of a lower industrial production: Manufacturing new objects will not be as necessary due to the development of pooling of existing assets An increased capability of detecting and repairing breakdowns will lead to a longer product lifetime With IoT, the electric distribution grid will be able to adapt to a widely decentralised and sporadic output of renewable energies Sensors and smartmeters are key to a real time adaptation of a local demand and supply They will make possible the connection of future decentralised storage systems IoT will increase the yield of renewable energies due to the real time adjustment of productive means based on data analysis Source: A.T. Kearney A.T. Kearney / COP21 10

11 Contacts : Hervé COLLIGNON Partner, Paris office herve.collignon@atkearney.com Julien VINCENT Principal, Paris office julien.vincent@atkearney.com A.T. Kearney is a leading global management consulting firm with offices in more than 40 countries. Since 1926, we have been trusted advisors to the world's foremost organizations. A.T. Kearney is a partner-owned firm, committed to helping clients achieve immediate impact and growing advantage on their most missioncritical issues. For more information, visit Americas Atlanta Bogotá Calgary Chicago Dallas Detroit Houston Mexico City New York Palo Alto San Francisco São Paulo Toronto Washington, D.C. Asia Pacific Bangkok Beijing Hong Kong Jakarta Kuala Lumpur Melbourne Mumbai New Delhi Seoul Shanghai Singapore Sydney Taipei Tokyo Europe Amsterdam Berlin Brussels Bucharest Budapest Copenhagen Düsseldorf Frankfurt Helsinki Istanbul Kiev Lisbon Ljubljana London Madrid Milan Moscow Munich Oslo Paris Prague Rome Stockholm Stuttgart Vienna Warsaw Zurich Middle East and Africa Abu Dhabi Doha Dubai Johannesburg Manama Riyadh A.T. Kearney / COP21 11

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