Schneider Electric Unlocks Green Procurement Opportunities

Procurement leaders face a decision point as electricity demand accelerates across Europe. The growth creates a need for rapid investment in power infrastructure and digital grid management systems.

According to Esther Finidori, Chief Sustainability Officer at Schneider Electric, this demand could create opportunities for organisations to secure long-term energy supply agreements. Esther spoke at a panel discussion on electrification at the Climate Innovation Forum during London Climate Action Week.

"When you think about it, the energy system and the data and telecommunication system are the two things you need that are the backbone of your economy," says Esther.

"Without electric, energy without data and communications, you have no economy."

The pressure on grids means procurement teams must work with utilities and suppliers to plan for expanded capacity. Traditional approaches to grid expansion remain costly and time-intensive.

Data centres create an investment case

Energy efficiency typically reduces electricity consumption. However, power-hungry data centres have changed the calculation for procurement professionals sourcing energy contracts.

Esther says increased electricity demand from artificial intelligence infrastructure should be viewed as an economic opportunity. She says: "we need to consider anything that is an increase of electric demand as good news.

"All the tensions arising now on the demand that will be generated by AI factories. Is this a conflict of uptake? We should see this as a major opportunity to finally have demand growth that unlocks the investments we need in terms of supply, in terms of grid upgrades, so that we can electrify our energy system."

The growth in demand could enable procurement teams to negotiate better terms with suppliers as generation capacity increases. Price volatility remains a concern if supply fails to keep pace.

"We need to anticipate a future where there will be abundant electric and that electric needs to be affordable," says Esther.

"If each time we hit a demand-supply crisis, prices hike, we will have a negative loop in the electrification momentum."

Digital infrastructure procurement priorities

Schneider Electric's sustainability chief says digitisation of the grid offers flexibility for buyers managing peak load costs. Smart grid technology allows organisations to shift consumption patterns.

"What we see as well is that demand will increase faster than our ability to commission new supply and our ability to retrofit," says Esther. "We need to start planning for a grid that can adapt and evolve fast. And the key to that is digitalisation."

Data architecture enables grid operators to manage maximum load at specific times. This could reduce procurement costs for organisations able to adjust their consumption schedules.

"The issue is not the total of electricity available; it's the peak, it's the maximum load at a point in time," says Esther. "And that's very easy to move provided that you have the right data architecture to manage the grid and control your peak."

Esther says procurement functions should prioritise suppliers offering digital grid solutions. "Massive and rapid digitisation is the way forward so that we can go with the right speed to evolve the grid," she says.

European infrastructure investment requirements

Hilde Tonne, Chair of ARUP, participated in the panel and outlined the scale of investment needed across Europe. The figures suggest sustained procurement activity through 2050.

"[It] is going to take approximately, for Europe, €5tn (US$5.68tn) of investments prior to 2050," says Hilde. "[That's] €210bn (US$238.5bn) yearly from now on and onwards. However, that number is less than what the EU is paying today on imports of fossil fuel."

Hilde says procurement strategies should focus on domestic generation capacity to improve energy security. This means sourcing agreements with wind and solar providers.

"We have to think homegrown. It starts there," says Hilde. "It starts with wind, solar and other renewables that can be close to us, that we can steer ourselves, in order to have that security, that resilience and that basis for electrification we talk about."

The shift could mean procurement teams need to evaluate renewable energy suppliers and infrastructure contractors more frequently. Supply chain resilience becomes a factor when considering long-term power purchase agreements.