What is your core vision for Eaton over the coming years, in the context of the powerful shift in the energy infrastructure space?
Eaton participates across the whole spectrum of energy management, providing a wide array of solutions for customers. As a power management company, we do not generate power, but we control, distribute, and manage it; ranging everywhere from medium voltage all the way down to the point at which it is consumed. When people access the circuit breakers and switches in their home, that is part of our core business within the residential sector. We create larger versions of this in the industrial space and make it safe within the building. Today we also work with microgrids to optimize power usage, and reduce intermittency and utility bills. Eaton also focuses on energy storage battery systems, including management software.
At Eaton, we aim to build a higher growth and higher margin company, and redeploy capital effectively for a sustainable future. As the transition from carbon-based fuels to renewables takes place, large growth opportunities will emerge for our company, and within our ability to support others.
Could you expand on how electrification will open up growth opportunities for Eaton?
An EV today, with a 100-kilowatt battery, has enough power to run a typical home for as few as three days to as long as a week. I can literally run my entire house for one week off the amount of power that is stored in the battery of my Tesla. In order for the green transition to take place, we need the infrastructure to support it. For example, if you have a transformer that supports a community of 100 homes, today, there might be three or four electric cars there. As soon as you go up to 25 or more, the electrical infrastructure that exists today is not adequate to support that neighbourhood any longer. When everyone wants to plug in their EV at night, there will not be enough power available to support the charging requirements. We need intelligence built into the systems, and we need to upgrade the electrical infrastructure. This is what Eaton does with our utility customers.
In buildings, we can support charging half a dozen EVs. But once we ramp up to hundreds or thousands, we need to change the electrical infrastructure in our buildings and offices. This is where we see emerging opportunities for growth - when you go from cooking, working, and heating with gas, to working with electricity. Growth will stem from our core business, the electrification of the economy.
Which do you believe to be the greatest challenge we face when it comes to the renewables transition?
The greatest challenge with renewables is that the sun has to shine and the wind has to blow in order to create power.
There will be times during the day where we have a surplus, and other times when there will be a deficit. Energy storage provides the ability to capture the excess for the moments of lack. The industry is making tremendous progress in terms of battery density and the cost of battery solutions is coming down quite precipitously. We are also on a sustainable path to really figuring out how to make all of this economically viable.
When it comes to battery storage solutions, the tip of the spear is really what is happening in the automotive industry – with manufacturing these systems at scale. Massive investments are being made to support the future electrification of transportation, and this is how we will get to more efficient and elegant solutions.
How is Eaton taking steps to meet green and net zero targets as you move forward?
First, everything is becoming digital and connected. Almost everything that we make today will become intelligent and connected. This will eliminate waste and inefficiency. Smart circuit breakers in your home, and a smart load centre, will allow for variable rate charging, monitoring your appliances – for example, if you left the stove on, you can turn it off remotely.
Eaton is a values-based company in how we approach suppliers. We joined the Responsible Business Alliance in 2021, the largest coalition dedicated to corporate social responsibility, and have a list of internal metrics to ensure our supply chain is responsible. We also set very ambitious goals as a company to reach net zero, and have a goal to invest about US $ 3 billion in R&D for sustainable products by 2030.
What final message would you like to deliver to our international readership?
I think most of the world is really focused on climate change now. Core challenges emerge when countries face poverty and are in survival mode, with priorities being putting food on the table for families. It really is going to take governments, and forward-thinking businesses and leaders, to take on the challenge. It will take a societal reprioritization and a global cooperation environment, neither of which are overabundant. We believe Eaton is in a great position to lead, and we intend to.
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