Circular economy: Digitalization as a cornerstone of circular economy development for Europe and Africa

Episode 5

Spokesperson: Amel Chadli, VP Digital Energy & Energy Management Software, Middle East & Africa

Q1) Please share with our readers what innovative projects Schneider Electric is doing on the circular economy and what is the role of digitalization in it.

Schneider Electric is deeply committed to the circular economy because we believe in creating sustainable, energy-efficient solutions that not only drive growth but also protect the planet. The company rolled out several projects in this space, which can be grouped into three main areas: training and entrepreneurship, social and inclusive business, and impact investment funds, all part of our Access to Energy (A2E) program. 

Q2) Could you give examples of how digitalization can boost the transformation from a linear to a circular economy in Africa?

Absolutely, digitalization can play a pivotal role in transitioning from a linear to a circular economy in Africa. At Schneider Electric, we are actively utilizing digital technologies to advance sustainability and energy efficiency. 

The Internet of Things (IoT) is fundamental in driving this transformation. 

Schneider Electric's EcoStruxure platform is a perfect example of this. EcoStruxure is an IoT-enabled, plug-and-play, open architecture that delivers enhanced value around safety, reliability, efficiency, sustainability, and connectivity. It has been crucial in helping African businesses, cities, and industries manage their energy and process in ways that are safe, reliable, efficient, and sustainable.

EcoStruxure effectively digitizes energy management. Smart meters and grids, for example, can provide real-time data about energy consumption and production. They can help integrate renewable energy sources, optimize energy consumption, and reduce waste, thereby promoting a circular economy.

It is also worth mentioning the role of AI and big data in advancing a circular economy. These technologies can be used to predict patterns in waste generation, optimize operations and aid resource recovery, all of which are critical components of a circular economy. 

Q3) How can circularity improve the different phases of the renewable technologies’ life cycle through digitalization, retrofitting, repairing, refurbishing, etc? Are there any significant differences between the European and African markets?

Circularity can have significant positive impacts on the various phases of the renewable technologies' lifecycle, enhancing the overall sustainability and efficiency of these systems. 

It starts with digitalization. This allows for better tracking and real-time analysis of resource usage throughout the lifecycle of any and all renewable technology products. For example, Schneider Electric can monitor the efficiency and condition of hardware such as solar panels or wind turbines in real time, enabling proactive maintenance, predicting potential failures, and reducing the frequency of costly and resource-intensive repairs or replacements. This enhances the operational phase of the lifecycle and extends the useful life of the equipment.

Retrofitting and refurbishing, on the other hand, can significantly reduce the need for raw materials and energy for new products. By updating or repurposing existing systems, we can extend their lifecycle, reduce waste, and limit the demand for new resources. 

Repaires are important to keep material consumption low. For example, if a wind turbine malfunctions, repairing the specific component rather than replacing the entire turbine avoids material waste and unnecessary energy consumption. This plays a role primarily in the end-of-life phase but also can impact the operational phase.

When we look at the differences between the European and African markets, we see a spectrum of opportunities and challenges. Europe has more mature renewable energy markets and has made considerable advancements in circular economy practices. 

Africa, on the other hand, presents a different landscape. The continent is rich in renewable energy potential but is still developing its infrastructure.  While this means there might be fewer established routes for circularity, it also means there's a unique opportunity to build systems from the ground up with circular principles at their core. 

Q4) What are the primary challenges to be solved within the African Renewable Energy market in order to gain the desired benefits of digital circular business models?

The African Renewable Energy market is facing several challenges, including impacts from the pandemic, inflation, and energy costs. 

Using microgrids powered by renewables like solar could be a good solution for getting power to remote areas. But even if we use a lot of these, we will still have about 674 million people without electricity by 2030. We need to invest about $30 billion each year to make sure everyone has power by 2030, and most of that money needs to be spent in Sub-Saharan Africa.

To get power to everyone in Africa by 2030, we need to connect 90 million new people to the grid every year. That is three times more than today’s average. The best way to address this is to extend the national grids. Countries like Ghana, Kenya, and Rwanda are already making great progress.

Schneider Electric has been proactively funding projects, notably through its 'Access to Energy' initiative. 

This program is supporting companies that provide solar energy solutions and fund projects in Africa, helping millions of people get access to clean, reliable power. 

We are also continuously working with stakeholders at all levels including governments, local communities, and other private sector actors to create integrated solutions. In Senegal, Schneider Electric and Entrepreneur du Monde launched a project to provide reliable power for onion storage, reducing post-harvest losses. 

We believe that with our expertise in energy management and automation, combined with our commitment to sustainability and local development, the business is well-placed to drive the digital transformation of renewable energy in Africa. 

Q5) Notably youth and start-ups are giving a tremendous contribution to the digital revolution: what is the current situation in Africa when it comes to youth engagement in the digital transformation and circular economy?

Africa’s digital revolution is largely propelled by a youthful, dynamic, and entrepreneurial population. The continent has more than 200 million people aged between 15 and 24, which is the youngest population globally. This is a powerhouse demographic that is significantly contributing to digital transformation and the circular economy.

From Lagos to Nairobi, Cairo to Cape Town, there has been an incredible surge in tech startups leveraging technology to solve real-world problems. Many are incorporating circular economy principles into their business models, contributing to waste reduction, resource efficiency, and the mitigation of environmental damage. 

At Schneider Electric, we are committed to supporting this innovation wave in Africa. Through our Access to Energy program, we aim to develop inclusive business models and partnerships to provide energy solutions for off-grid communities. 

Moreover, our Schneider Electric Foundation focuses on training and entrepreneurship in energy to empower youth, helping them shape a more sustainable future. However, despite the significant strides, there are still substantial challenges to be addressed. These include limited access to capital, insufficient infrastructure, and skills gaps, particularly in remote and underserved areas. But with the ongoing efforts of governments, international organizations, and members from the private sector, we are hopeful and excited about the future of digital transformation and circular economy in Africa.

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Africa is a continent in continuous transformation, with a sustained economic and population growth, a fast-paced urbanization and a young generation of talents who is leading its business revolution. This transformation requires energy and will require it even more in the next decades.
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