Interview with Timm Christoph Voigt - Part 2
Explore how AI, cross-industry collaboration, and new business models are reshaping buildings and data centres, driving the shift toward net zero and smarter investments in Europe.
How is artificial intelligence impacting the industry?
AI of course has an impact on the building technology space, it opens even more opportunities to develop smarter and faster intelligent solutions to optimize the building sector. AI based solutions for the optimization of buildings existed long before the Chat-GPT era, this has only drawn way more attention to the topic. The biggest challenge to the broad deployment of AI solutions across buildings is that most of the buildings is not connectable and needs retrofits to be able to make use of any smart optimization.
The other side of how AI impacts the industry is of course the incredible increase in demand for Data Centre capacity and the respective increase in related energy consumption. As this growth is going to continue, we need to find a way to make Data Centres sustainable. This is at the heart of our Innovation hub to accelerate the green transition of Data Centres that we recently set up together with Schneider Electric, Microsoft and Google. The partnership allows us to work together on solutions for the net zero data centre.
How do you see new collaborations driving change?
I think collaboration is key to solve the challenges the building industry needs to solve, no one player will be able to solve all of it alone, and we need to collaborate to solve today’s most pressing issues. Our collaboration in the Data Centre initiative with Players from the Industry but also with our peers, allows us to combine our knowledge and create better solutions faster. We will see more of those bigger cross industrial collaborations, but also on the small scale, with selected partners that can help deliver specific value propositions, integrated into our own value proposition. Think of it as an ecosystem.
But to further accelerate change and adoption in the industry we need is new business models, that make decarbonization the logical business choice and clear regulation that sets transparent targets and pathways for owners.
Today Danfoss serves customers in more than 100 countries. What are the main challenges in the European markets?
Elaborating a bit on where I left of before, European building owners feel a lot of regulatory pressure. They know there is a European target to move towards a net zero building stock by 2050, but the regulation is in big parts not clear yet. This gives owners mixed feelings. On the one hand they know they need to step up and make investments, but often they don’t know what exactly is expected from them. On top of that, we have a high interest environment in which owners are required to make these significant investments in their building to achieve compliance. Some of the owners are paralyzed because they don't know what exactly they're supposed to do, let alone how to finance it. People will only start moving with the right incentive structure. Or when the sustainable, or smart solutions, become the more profitable respectively the financially more viable choice. I think that’s where a lot of companies are still trying to crack the code.
What needs to happen to stimulate change in a context that is so challenging?
The building market is special in the sense that in a lot of parts the one who benefits from energy savings in most markets is the tenant, whereas the one who needs to bare the costs for the solution is the owner, without directly benefiting himself. That is one of the key challenges that we see in the entire central European market.
This looks for example different, in Finland whereas a tenant your heating is included in your monthly rent. So, it’s independent of how much you use. In this case, the owner benefits from creating efficiency and as a result we see way more investments into energy efficiency solutions.
If you manage to crack the code in central Europe and create a scenario that rewards the person who makes the investment you flip the entire investment rationale.
Do you think stimulating a different investment behaviour will lead to owners moving from product to service models?
Absolutely. If there are service models that make it easier, even for smaller budgets, to invest in solutions that are truly sustainable, that could definitely be a way to accelerate change.