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Let’s Build a Smarter Planet: Green & Beyond

Rich Lechner, Vice President, Energy & Environment, IBM August 5, 2009. Let’s Build a Smarter Planet: Green & Beyond. Reality of a globally integrated business world. These issues are all interwoven. Economic downturn requires doing more with the same.

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Let’s Build a Smarter Planet: Green & Beyond

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  1. Rich Lechner, Vice President, Energy & Environment, IBM August 5, 2009 Let’s Build a Smarter Planet:Green & Beyond

  2. Reality of a globally integrated business world These issues are all interwoven. Economic downturn requires doing more with the same. Transience in price and demand for energy worldwide. The effects of climate change are now both a societal and a business concern. Increasingly empowered and interconnected customers .

  3. Environmental sustainability is an imperative for 21st century business Create products and services that give rise to new markets. Lower costs while overcoming operational barriers. Strengthen reputations while meeting regulations.

  4. ‘Green’ encompasses multiple, inter-related resources WATER Water is needed to generate energy and energy is need to provide water. CO2 emissions contribute to climate change, which impacts water systems. CARBON ENERGY Energy production results in CO2 emissions

  5. To realize the benefits of sustainability, an organization must take a systemic view of its value chain…. IT CUSTOMERS MANUFACTURING WORKFORCE TRANSPORTATION SUPPLY CHAIN FACILITIES

  6. Uncovering unexpected areas of cost... 10,855 liters 6.6 billion $46 billion Water required over the product lifecycle of a pair of jeans. Number of new trees needed to clear CO2 emitted by data centers each year. Value of the carbon offset purchases by 20 countries in order to meet emissions reduction targets in 2008.

  7. Uncovering unexpected areas of cost and opportunity 20 million gallons saved 74% less energy 2,400 tons avoided In water during chip manufacturing process each year by IBM’s Burlington FAB. Resulted in $3 million annual savings. By implementing a green data center, Care2 cut costs, improved performance, and promoted its sustainability to attract new members. UK retailer Tesco avoided an estimated 2,400 tons of CO2 emissions by importing wines in bulk and bottling them in lighter weight glass.

  8. The demand for change is growing 75% 1 in 4 59 59 countries and jurisdictions have or are pursuing implementation of mandatory cap and trade systems. Of companies have seen an increase in the number of advocacy groups collecting and reporting CSR related information about their company. Consumers say they would switch brands for a given product or service if provided with a more ethical alternative.

  9. These mandates for change are a mandates for smart

  10. Something profound is happening…. INSTRUMENTED We now have the ability to measure, sense and see the exact condition of practically everything. INTERCONNECTED People, systems and objects can communicate and interact with each other in entirely new ways. INTELLIGENT We can respond to changes quickly and accurately, and get better results by predicting and optimizing for future events.

  11. + + = An opportunity for smarter organizationsto find the value in ‘green’.

  12. To achieve these benefits, business and organizations need: Green infrastructures that are instrumented, interconnected, and enabled by intelligent energy management Sustainable operations which account for all environmental and social impacts of doing business. Intelligent systems optimized at the macro level –utility grid, transportation system, water infrastructure, and product design.

  13. Switches/routers Manufacturing Systems Storage Factories Warehouses Servers Air Conditioners/Chillers/UPS Vehicles Stores Data Center Energy Mgmt Console Desktops CellTowers Applications IP phones OfficeBuildings Pipes Databases A Green Infrastructure can lower cost, improve efficiency and reduce environmental impact across all assets OTHER ASSETs REAL ESTATE & FACILITIES INFORMATION TECHNOLOGY

  14. Green infrastructure: Applications and benefits SMART IS Building green data centers to support corporate brand objectives SMART IS Proactively addressing information growth and environmental regulation. SMART IS Holistic energy mgmt that enhances the efficiency of buildings and other assets. Fullerton Hotel:Singapore’s luxury hotel improved operational efficiency and lowers power and cooling costs by 30%. New infrastructure has reduced the data center server footprint by 75%. Sun Trust Bank:Built a green infrastructure to anticipate and respond to information growth, measure and verify performance and achieved data compression rates of up to 80%. Mabuchi-motors:Designed and built an intelligent HQ building in Japan that delivered 22% reduction of CO2, 13% reduction of life cycle cost.

  15. Sustainable operations enable organizations to account for all aspects of their business

  16. Sustainable solutions: Applications and benefits SMART IS Designing new hybrid systems that can reduce fuel consumption in urban delivery vehicles up to 70%. SMART IS Consolidating distribution centers to reduce emissions by 15% and fuel costs by 25%. SMART IS Reducing travel, real-estate and office costs while appealing to top talent. COSCO:After analyzing its operations across product development, sourcing, production, warehousing and distribution, the Chinese shipping giant consolidated its distribution centers from 100 to 40 to prevent 100,000 tons of emissions each year. IBM:More than 40% of employees do not regularly come into an office, saving $100M annually in real estate costs. Last year IBM saved $97M in travel costs by using online collaboration instead. Eaton: Developed a hybrid hydraulic powertrain system for UPS. If half of all urban delivery vehicles in the U.S. used this type of technology, we could save more than $1.5 billion annually in fuel cost, and reduce CO2 emissions by 8m metric tons.

  17. Congestion Water Energy grid Chemicals Energy Carbonemissions Carbonemissions Energysources Noise pollution Energy Publictransportation Smart home Intelligent systems gather, synthesize and apply information to change the way entire industries operate. Smart traffic Use real-time traffic prediction and dynamic tolling to reduce congestion and its byproducts while positively influencing related systems. Smart energy Analyze customer usage and provide customized products and services that help to boost efficiency from the source through the grid to the end user. Smart water Apply monitoring and management technologies to help reduce the use of water, as well as related energy and chemicals.

  18. Intelligent systems: Applications and benefits SMART IS Managing infrastructure and operations related to the effects of climate change in a complex water system. SMART IS Lowering congestion and carbon emissions by influencing traffic patterns on a city scale. SMART IS Knowing exactly where a power outage occurs and instantly dispatching a crew to fix the problem. Rotterdam: Monitoring and forecasting system for smarter water and energy management will collect and analyze real-time data on the rivers, ocean, weather and more, creating the world’s first Smart Delta City and helping attain goal of 50% reduction in CO2 by 2025. Singapore:Developing one of the world’s most sophisticated, smart transportation systems leveraging road pricing; integrated fare management; and deep analytics to predict and avoid traffic congestion up to an hour in advance with 85% accuracy. DONG Energy:Denmark’s largest power producer installed remote monitoring and control devices to gain an unprecedented level of information about the current state of the grid, lessening outage times by a potential 25-50%.

  19. EDUCATION • TRANSPORTATION • SOCIAL SERVICES •  SECURITY •  SAFETY • UTILITIES • HEALTHCARE • COMMUNICATIONS EDUCATION • TRANSPORTATION • SOCIAL SERVICES •  SECURITY •  SAFETY • UTILITIES • HEALTHCARE • COMMUNICATIONS Smarter Cities – A complex System of Systems • In 2007, for the first time in history, majority of population lived in cities – 3.3B • 60 million people moving to cities each year • 59 cities with 5 million+ citizens by 2015 • 70% world population living in cities by 2050 – 6.4B people • India’s urbanization rate at 50% by 2030 • $40+ trillion investment in urbanization in China (2005-2025)

  20. Environmental leadership: IBM case study results • From 1990 – 2007. reduced/avoided CO2 emissions by 45% relative to 1990 • Energy conservation over past 16 years equivalent to total energy use in 2008 • 42% of IBM’s employees do not regularly come into an office saving $100M annually in real estate costs • $97M in travel costs by using online collaboration in 2008 • Renewable energy purchases grew from 11M kWh in 2001 to 455M kWh in 2008 • For every 2 metric tons of IT equipment manufactured and sold, IBM processed and recycled 1 ton of product waste • Annual average water efficiency gain of 6% against target of 2% http://www.ibm.com/ibm/responsibility/

  21. Create products and services that give rise to new markets. Lower costs while overcoming operational barriers. Strengthen reputations while meeting regulations. ibm.com/green IT CUSTOMERS MANUFACTURING WORKFORCE TRANSPORTATION SUPPLY CHAIN FACILITIES

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