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Season 1 Episode 2: The Impact of Big Data on Energy Use

Edited transcript Season 1 Episode 2: Ramez Nasser

Section one: What big data can do

Chris: It gives me great pleasure to introduce Ramez Nasser, who is a lawyer and entrepreneur, former engineer and currently board director of a Euronext listed company in the climate tech space. So today we’ve got a great conversation about where big data meets climate change.

Ramez, thanks very much for taking the time to come in and speak to us. 

Ramez: A pleasure, Chris. 

Chris: So you’ve got a really interesting journey where you’re very much into big data and big data analysis, and we’re here to talk to you about where big data meets climate. Could you possibly tell us a little bit about your journey to this point?

Ramez: I started off as a mechanical engineer and then became a lawyer and became more and more entrepreneurial in my journey. And I am a founding investor in Energisme, which is a Euronext growth listed company focused on big data in the energy space.

Chris: The debate around energy does tend to focus in on particular types of technologies, whether they’re more or less useful. Where do you see big data fitting within that debate?

Ramez: I think to make any progress in any domain, you have to be able to measure what you’re doing to have any significant impact and be able to measure the size of that impact. And with the development of technology, of IoT, we’re equipping buildings, we’re equipping cities and factories with a whole host of electronic components and people to measure their efficiency and measure their efficiency at using energy effectively.

We have to be able to apply big data techniques as numbers multiply, to reach efficiency.

Chris: Could you dig into that a little bit more: what do you actually mean by that? That’s very big picture stuff. What does that mean in reality, on the ground?

Ramez: It means collecting a lot of heterogeneous data. So you’re talking about IoT data, scatter systems, BMS data, contract data, meteorological data, which is all very heterogeneous and increasingly complex. Being able to make sense of a lot of it, sometimes in real time, and to do so on a massive scale. And that’s a real technical challenge, but one that we have to meet if we are to go towards net zero, and to be able to measure our progression towards net zero.

Chris: There’s a lot of really good intentions in the world right now and it’s getting us a certain part of the way. But big data seems to seems to enable more understanding. Should we have a more quantifiable approach to managing these issues?

Ramez: I think quantifiability is essential to accountability, Chris. And in order to measure progress and to see a difference, we need to be able to measure that progress and we need to be able to analyse the data around it.

Section two: cleantech markets in the UK and Europe

Chris: Okay. You yourself are between London and Paris. You spend your time between the two, very much interested in the international aspects, how different countries and different cities are approaching these challenges. Tell us a little bit about the differences between London and Paris in their approaches to climate in general – mitigation, but also how data is being used in the two cities.

Ramez: You’ve got a public policy angle and you’ve got a private sector angle. On the public policy angle, the European continent, France in particular, has been very active in using both the carrot and the stick. An example of that is the French tertiary decree, which put some very real targets that people have to meet, especially real estate owners over the next 10, 20, 30 years.

So the idea is that by 2050 you will have to reduce your building emissions by 60% in France. So anyone who owns over a thousand square meters, or operates over 1000 square meters, will have to reduce their emissions by over 60% over the next 28 years. The UK has some very ambitious goals in terms of reaching net zero, but I think it’s left a lot more to the private sector, and there is less of a stick associated with that.

The French are pushing this agenda very hard. On the private sector side, I would say traditionally venture capital has been a lot more active in the UK than in France, but you’re seeing a levelling up between the two jurisdictions driven both by public spending and by corporate VC activity.

Chris: How have you seen the investment markets for big data meets cleantech evolve over the last few of years?

Ramez: Over the last five years you’ve had increasing VC activity, but you’ve got traditional VC and you’ve got corporate VCs and I think a lot of the traditional VC has been ‘spray and pray’ – taking lots of little small bets because it’s hard to see which techs will emerge. It’s partly driven by the fact that you’ve got two massive forces today in the IT space. You’ve got one which is the ability of large IT infrastructure companies like Microsoft, Google, Amazon and others to provide hyperscale data storage. And on the other side, you’ve got an AI ecosystem which is growing very fast, made up of mostly SMEs with people who have developed cool algorithms. But when you drill down, there’s a Forbes statistic which dates from 2016 and it hasn’t changed since: data scientists spend 80% of their time looking for data, cleaning up data, making it available and clean enough to be used for their algorithms. That’s 80% of their time. So the challenge is being able to refine all of the data that we’re accumulating in order for it to be used or usable by data scientists.

That will accelerate the energy transition. So we’re focused on the refining bit, which is the middle bit, is developing the technology that will allow us to treat, on a massive scale, data that comes from various systems; whether it’s IoT systems, BMS systems, cloud stored data. Because companies today are facility managers. Utilities in that space are sitting on vast cemeteries of data which could be turned to; if data is a new gold, they need to turn their cemeteries into gold mines.

To give you an idea of the scale we’re talking about: in 2010, we estimate that the total amount of data that was stored in the world and on our systems was between about one and two zettabytes. And to give you an idea, that’s 10 to the power of 21 bytes…is a zettabyte. By 2020 we were talking about 47 to 50 zettabytes. in 2035 will be talking well over 2000; 2000 to 2500 zettabytes.

So the amount of data we’re storing is increasing exponentially. It’s crucial that we develop the technologies to be able to make use of that data, especially in the energy space, which is one of the areas that accumulates the most amount of data.

Chris: Absolutely. If we’re going to successfully transition, we need to understand what we’re transitioning from and to. We need to understand the scale of the problem. What’s the role of regulation in that, to make your life easier? What would you say to the European Commission or to Westminster? 

Ramez: I think you need both the carrot and the stick. The carrot for example: in France there’s been a lot more grant funding for these types of technologies. There’s been public utilities and the government have been a lot more adventurous in testing technology than they have in the past. But you also need the right incentives: whether it’s a form of tax incentive, whether it’s a PR incentive. I think consumers today and users want to know that whatever company they’re buying from is behaving to the best of its ability in terms of maximizing its energy efficiency.

Section three: climate tech: attracting talent and capital

Chris: This is an area that you feel very passionate about, very strongly about, but it isn’t naturally the first thing that people think about when somebody thinks, ‘oh, I want to get into climate.’ Big data isn’t normally the place people will jump into; or for people in big data, climate isn’t the place that people will go and jump into.

Ramez: I respectfully disagree. What we have seen in our journey is we’ve had very low attrition on the tech side, for example. The reason is energy efficiency and climate change is an area where people find purpose. Rather than just trying to augment consumer spending for a particular type of luxury good, you’re actually doing something that’s meaningful and helping your community, your city, your country and the planet.

So I think especially for young programmers, being involved in energy efficiency provides a sense of purpose and is a source of very meaningful work.

Chris: Absolutely. I see why it would work. But the vast majority of people coming out of MIT are looking to go and work for Apple or Google or Microsoft or whoever. They’re not looking at climate issues. How do we change that? How do we get those great talents – and of course, from London Business School as well – into this type of space, as opposed to looking and looking for the large multinational tech companies?

Ramez: I think that the large multinational tech companies that you were mentioning realize as well that they have to provide a sense of purpose to be able to recruit stuff. It’s a source of talent retention. For all their sins, they are making a concerted effort to be a lot more energy efficient and to be a lot more mindful than they were maybe 20 or 30 years ago, when energy efficiency was a footnote.

And with energy prices increasing and affecting companies as well as consumers, I think it’s something which is a lot more top of mind now. You can’t open a newspaper today where you don’t relate to the cost of energy and the cost of living increasing. So energy efficiency is, I think, front of mind for a lot of people.

In my case, part of the entrepreneurial journey was meeting people who were very passionate about it, and it was an opportunity to be able to try and get involved in a technology that would be tech for good.

Chris: What is your role in Energisme? 

Ramez: I’m one of the founding investors, and have been a non-executive and occasionally acting general counsel. When you have a fast-growing company, you have to do all sorts of things and help – it’s all hands on deck, as it were.

Chris: Of course. So you’ve IPO’d on Euronext. How did you find that journey, where investors open to you? How do you see the market in general, in terms of capital for cleantech big data?

Ramez: I will say two things. On a more personal level, we did the first IPO on Euronext Growth during the first lockdown, so it was a lot of zoom roadshows and there was a lot of institutional appetite. We were massively oversubscribed because I think there’s that recognition that the tech is increasingly available. It’s being at the right place at the right time, and being able to recognize that and make the most of it. 

On a broader scale, I think you have generally a lot more VC money moving into cleantech. But in cleantech, you’ve got to differentiate true technology from consulting work, and a lot of tech companies today are actually selling a lot of consulting work. The challenge is in finding the techs that are really differentiated, and that is quite a specialized skill.

Chris: Recent events have created a lot of nervousness and uncertainty not necessarily reflected in stock markets, which personally I find slightly bizarre. But how do you see the next three or four years in terms of appetite for investments in the cleantech space, given that changing world: potentially higher interest rates, higher inflation, higher cost of living. That’s where we’re going into at the moment.

Ramez: I think that cleantech is an absolute priority. Both from a moral perspective – this is what populations in Europe at least, in America as well, expect from their governments is a move to a lot cleaner power; and it’s also a question of geopolitical significance around greater energy independence. Now that will happen probably through a mix of cleantech, of nuclear, and a diversified energy supply.

Section four: decarbonising data

Chris: What other parts can big data can play in this? For example, one of the hot topics right at the moment is carbon credits, and whether carbon credits can be put onto some form of blockchain to make them identifiable and make them more easily tradable. That’s just one example. We can talk about that. Any other applications that you feel big data can help with?

Ramez: Absolutely. I think when it comes to blockchain (which is fundamentally a ledger technology) in any form of trading – and that obviously includes carbon credits – it’s very helpful in terms of creating traceability. And a possibility, if you look at it from a legal perspective, because you can also use it to get third party certification. 

Now to know which ledger technology will eventually prevail, what will be adopted will not only be a function of technology, but also of regulation. And regulation is still nascent in that space. But you can imagine that there’s going to be – is already starting to be – carbon credit tokens that will be tradable. Tesla has used a lot of carbon credits in its manufacturing, it has been a great source of revenue for them.

So, it’s hard to tell today what role blockchain is going to play. I think you’ll have a lot of people who will potentially burn their fingers in doing so.

Chris: One of the big environmental concerns around big data is server farms and the use of energy. So the obvious question is: is the juice worth to squeeze? You’re spending an awful lot of power holding and processing this data. Is it worth it?

Ramez: When you look at the energy consumption of big data and data centres today, you can say that about 1 to 2% of the world’s energy consumption is related to data centres and computing power. In some countries it’s a lot higher, like the UK or the U.S., where there are far more data centres, and therefore they’re a bigger share of the overall energy bill.

However, what we have seen is servers and electronic components becoming a lot more energy efficient. Hyperscale data centres have allowed for very efficient cooling systems that consume a fraction of what they were consuming only ten years ago. And so the overall energy consumption of datacentres has not been linear. On a per byte basis, it’s been steadily reducing. And the hyperscale storage facilities over the large clouds have put in a lot of solar power, put a lot of renewables to power those datacentres. Because they’re fully aware that, again, the end consumer who is helping drive that change expects a lot more greener storage of data.

Chris: In some parts of the world that is true. In other parts of the world, traditionally for the places where you have the cheapest energy, there’s a lot of server farms and the cheapest energy normally means dirty coal. 

Ramez: You have to start somewhere!

Chris: I know you’ve got to start somewhere, it’s true. But you say the costs of big data storage are coming down. It isn’t a linear progression, but on the other hand the amount of data being stored is going up exponentially. 1% to 2% is still an awful lot of energy. It’s the equivalent of the airline industry. So it’s something that does really need to be thought about. Is this genuinely worth our while?

Ramez: Yes. So I think there’s two ways of trying to tackle this issue. The first way is becoming more efficient. You talk about data storage: cooling systems become more efficient, electronic components, servers becoming more energy efficient, with virtual servers being able to run more and more applications on a single server. That’s helping a lot, and that’s part of the efficiency drive.

Then there’s a less pleasant side to it. If you want to be energy efficient, you have to find ways of consuming less. Not just being more efficient, but physically consuming less. An example is in public lighting, you have some very large highways where at night there’s very little traffic If you switched off public lighting from one in the morning to five in the morning, you’d be saving four hours of night time lighting, which most cities don’t do.

You can look at it as one sixth of 24 hours, but it’s more like one third of a night. So you can get some real economies, and for that you’re going to need technology to be able to measure the traffic, to be able to switch on lighting, sometimes on demand if you’re working on street lighting, for example.

I think that’s part of the future of smart cities, is making a lot more efficient use of the energy you have by also trying to diminish the consumption. But our population is growing; as a planet our consumption is growing. And that’s something we have to tackle as well, in terms of finding ways where we can really save energy by trying to alter demand for energy.

Chris: Yes, that’s great. That hadn’t occurred to me. Wouldn’t you say that it’s so obvious, why aren’t we doing it already? And I guess the answer is data: we don’t understand it properly yet. So just to the second part of that question then, are there any other like areas in the big data space that we should be excited about keeping an eye on, that you think could really make an impact?

Ramez: On the big data space? I mean, I think we’re at the very beginning of the use of AI and of the efficient use of data for the greater good. But once you have developed that technology, you can apply it to so many other sectors outside of energy efficiency. For example, in the medical space, being able to find diseased material or finding correlations that we couldn’t think about previously. So I think big data has a big future in front of it in many sectors.

Section five: mitigating risks

Chris: It also has big dangers attached to it as well. Data plus analysis is equal to knowledge; knowledge is equal to power. Power is subject to abuse. How do we protect against big data becoming all encompassing, all-controlling?

Ramez: There’s an element of public policy, clearly. But I think it’s a technology that’s developing very fast. And the countries that don’t invest in it will become more dependent on others. I mean, we’re all interdependent in some way, and so we have to make choices, whether it’s your interdependence militarily, energetically, or from an energy point of view.

Big data today is almost a race. I think it’s essential to be at the forefront of it.

Chris: What role do you think that the European Union and Westminster and so on can be playing in protecting that data?

Ramez: Well, you have GDPR that’s in place. And I think you’ll have a whole host of new regulations as time goes by. You raise a very important point, which is that when you talk about data, you also talk about metadata. So, for example, an IoT probe that sends a message about a temperature or water temperature measurement actually sends a bunch of parameters in each message, maybe 40 parameters. One will be the identifier of the probe, its location. It will be the battery life. It will be its frequency of transmission. And so being able to pick apart the metadata and share only the part of the data that you need to share with the customer, with the supplier or within an ecosystem is becoming crucial.

To give you a practical example, let’s say you’re a utility and you’ve deployed tens of thousands of probes from different manufacturers, and an AI company comes to see you and says, ‘we have a solution to optimize the battery life of all your probes.’ Now, when you know the cost of installation of a probe, if you’re able to optimize the battery life of a probe it has a very significant impact.

Chris: Just tell us quickly: What is a probe along a network? When you talk about probes, what do you actually mean?

Ramez: It can be a smart meter; a form of intelligent temperature gauge; a traffic measuring device.

Chris: So it’s anything that provides data back into the system.

Ramez: Anything that sends data back to a storage facility. But it can also be a scatter system in a factory, it can be a building management system. Any piece of data that you receive today contains a lot of metadata. And being able to pick the part of the metadata that you’re willing to share…so if you’re that utility, you want to be able to share only the data that relates to the battery life of your probe and not everything else, whether it’s the location of the probes or any other data which may be become part of your IP. So being able to share all of that battery life requires the ability to de-structure that data, understand it, and pick the parts that you want to share only.

Section six: advice for a purposeful career

Chris: One question we try to try to ask is: why should people care about what you care about? Whether it’s an LBS student sitting there wondering what’s to do with their career, whether it’s somebody who’s an alumni or C-suite executive, wants to spend their time or their money or their business into this space. Why should this be the space they’re putting their time, their energy, their their efforts or their finances into?

Ramez: I wouldn’t want to tell anyone what to do with their life. But I think we all need to find a sense of purpose in what we do. And sustainability and the energy transition is a major societal issue. It is probably one of the key issues facing the planet today, and it’s a sector which is growing very fast. So for me, it associates purpose with opportunity. Everyone, hopefully, has to be able to make a decision in a space where they can find both those things, and to find some form of happiness.

Chris: if we break it down into what your day looks like: can you tell us a little bit about your customer journey, your interactions with your clients? What do you do for them? How do you do it? 

Ramez: Any entrepreneurial journey, every day is different. You have to have both the appetite and the ability to handle different days. However, I think anyone starting in that space, whenever you’re dealing with big data, you’re generally dealing with organizations that accumulate that data. And it is often fairly large organizations that accumulate that data. So you have to be ready for a customer that doesn’t necessarily think as entrepreneurially as you do. What it actually means is that sales cycles that small companies have to deal with in that space can sometimes be disconcerting in the beginning.

You have to be very patient, in being able to hand-hold your clients until they’re ready. We find our customers are also on a journey of discovery. To give you an example, we offer both SaaS (software-as-a-service) and PaaS (platform-as-a-service) solutions in our business because we’re seeing, increasingly, customers paying attention to what happens to their data and issues of data sovereignty. Where is the data stored? Who can access it? How is it accessed? Where are the cybersecurity risks associated with storing data? That is something which young companies have to be able to answer increasingly quickly. I think that data sovereignty will be a major issue.

Chris: Now, obviously, you are a quoted company on a recognized investment exchange. So we can’t call you a startup anymore. But you were a startup, you had to go through these challenges. Is there any advice that you can be giving on that point or in general, for startup companies or people thinking about starting up a company in this space?

Ramez: Two things come to mind. Number one is that a lot of what we do, once you see it, sounds pretty obvious, but the necessarily obvious is not always easy to achieve. So what we’ve seen is a shift in mentality over time, where the large blue-chip customers thought that they ought to manage the entire software side of their business. But when you’re an energy company or a hardware manufacturer, software is not native in terms of development culture. So a lot of large clients have gone through the lifecycle of trying to develop internal solutions, finding that it’s very hard to bring together the required competencies to achieve that, before externalizing. So I would say increasingly there’s a mindset shift towards ecosystem thinking.

This is something that we worked on very early on, is recognizing that we bring a part of the puzzle, but we’re willing to work with other pieces to fill the picture in. Today, what you’ll see is that we work with AI companies. We see ourselves as an AI enabler, to provide an entire turnkey solution to the customer and allowing the customer – or encouraging the customer – to develop their own IP using our tools, but of which they remain in control.

That ecosystem thinking, I think, is a shift in the way businesses are developing now. And IT is becoming so complex and specialized that you have to be willing to think in ecosystem terms to progress quickly.

Chris: What advice would you give to somebody setting out on this journey? If you had your time again, what would you wish somebody had told you before you started out on the journey?

Ramez: Probably a lot of things, Chris! But I think the key thing is resilience. There is no simple journey. There are always bumps on the road. And you have to be humble and resilient about those. And I would say be ready for longer sales cycles than I initially expected. We’ve found ways to now shorten them. and that is part of ecosystem thinking. I think in any industry today, what you have to do is have your ears to the ground and talk to a lot of people, and be willing to try different solutions to existing problems.

Section seven: getting to the promised land

Chris: As the world moves towards net zero there’s a lot of challenges, a lot of talk, there’s a lot of big words, a lot of good intentions. But where does data fit with us finally reaching the promised land of net zero?

Ramez: I think data and technology is an enabler. But fundamentally, on the one hand, at an exogenous level. energy costs are going to have an effect on your top line and your bottom line. So I think companies, as the price of energy goes up and as part of improving either their topline or their bottom line, depending on which side of the business they’re on, will increasingly work to reduce their energy footprint. In the case of utilities, it is providing additional service to their customers or facility managers to manage a company’s carbon footprints. 

At a more endogenous level. I think we’re moving away from having just a single energy manager in an organization or a head of innovation that looks after CSR. Where energy 20 years ago was a footnote in a CSR report, I think today it needs to become a KPI for managers. So if you are running a fast food chain, for example, maybe a store manager needs to also take responsibility for the energy consumption of that store. Making energy efficiency a KPI – and that will take slightly different forms in different types of organizations – I think is key to involving everyone, to move more quickly to net zero.

Chris: I have to agree with that. Just to slightly question the premise though, we started out by saying, ‘as energy prices go up,’ and that isn’t necessarily a given, certainly from where we are. We’ve had a long term of relatively stable energy prices until very recent days. When you say energy prices are going up, you put that as a self-evident truth. What will make it a self-evident truth? Do we need carbon pricing? Or is it just the current situation in the world that made you say that?

Ramez: You’ve got energy mixes which are different in each country, so the answer is slightly different. If you’re relying on an old nuclear plant, then that is mostly depreciated in terms of cost and your energy pricing is potentially lower where the cost of energy can be viewed as lower. And if you’re investing massively, then it will take time to absorb the cost of doing so.

But I think energy is not only about finance and its cost, it’s also a geopolitical issue and it’s an environmental issue, and it’s an issue for future generations that will transcend future generations, so I think it needs to be looked at from different angles.

Chris: Okay. Well, one of the themes that comes throughout this conversation has been everyone’s place in an ecosystem; how ecosystems can be helping with all sorts of situations, how people need to be playing their particular role within the overall energy transition. Just as a as a way of wrapping up the conversation, could you dig a little bit more into your beliefs around ecosystem thinking?

Ramez: To be efficient in the energy space, everyone needs to focus on what they do best. From our perspective, we’re involved in tech. We don’t intend to tell our customers how to run their businesses. We intend to provide them with the analysis and the data that would allow them to take the decisions that they need to take.

But I think in an ecosystem, you need to get the best of what people are good at. If it is any company that’s developed an algorithm for managing public space lighting, you need to be able to work with those. And I think the days of all of the IP being developed in-house and retained by a single utility or large corporate are largely over if you want to keep a competitive edge.

So I think the change of mindset we’re seeing is already happening, but we’ll need to accelerate. It’s both a challenge and an opportunity to make a real difference.

Chris: Thank you very much, Ramez. That was a fantastic conversation. 

Ramez: Thank you, Chris. I really enjoyed it.

 

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