Future of industry: embracing data and clean energy

Data and energy are two of the world’s most important resources. For both, we are seeing a significant shift in supply and demand dynamics – and we must innovate to adapt.

That was my key takeaway from speaking with startups, conglomerates, academics and venture capital investors at this year’s Hannover Messe – the world’s largest gathering of industrial innovators, attracting some 150,000 attendees from 4,000 companies.

As environmental investors, we were there to identify new technologies that enable energy and resource efficiencies.

One key shift was in the tone of conversations about energy, which is undergoing a step change in demand. There is a new sense of urgency. Utilities and corporates are looking to address energy challenges ahead of time.

Non-fossil fuel sources already account for 41% of the world’s electricity generation. To increase that share, we need to find better ways to manage the intermittent nature of wind and solar power.

At the same time, a backdrop of increasing extreme weather events, reports of cybersecurity breaches and growing geopolitical tensions have heightened the focus on energy security and independence.

Innovation in energy storage and microgrids

A Taiwan-based electrical equipment supplier, for example, showed us a new battery energy storage system (BESS), which helps to manage power in a dynamic way.

Used alongside solar cells, fuel cells, generators, transformers and other critical electrical equipment, this BESS integrates liquid cooling and comes as a single energy storage cabinet. With a footprint of less than 1.5m² and a forklift-ready design that avoids underground trenching, the technology is designed to simplify the power management process and make battery storage more accessible, even for smaller commercial sites. 

We also saw clear advances in the development of microgrid software and controls, the “brains” of the system.

Microgrids can strengthen the resilience of our power supply by decentralising operations and reducing reliance on the broader network. To do this, they require sophisticated controls to coordinate all of the generators, storage, loads and utility connections. We saw examples of these in Hannover, with innovation focused not only on energy efficiency and dynamic load management, but also on cybersecurity and the ability to ensure stability in case of potential faults caused by weather or attacks.

The role of AI in industrial innovation

All this innovation is only possible with digital technology, which was the other big theme at Hannover Messe. Every tech showcase, every demonstration we saw, every conversation we had involved AI. That is not surprising: AI is the topic du jour at most events today. What struck me was just how far those conversations have advanced from a year ago.

The discussion is no longer about what AI might one day be capable of for industrial companies. The focus has already shifted to deployment, and the breadth of applications was impressive.

There was much focus on so-called physical AI, from dark factories – staffed by machines – to humanoid robots, which were showcased at many of the stands. We saw humanoids taking part in a multitude of activities from serving drinks to performing Tai Chi. However, while eye-catching, we were hard put to find a showcase where they were truly involved in the automation of industrial applications, which is where they could play a future role in efficiency improvements.

By contrast, agentic AI is already making headway in many industries. For us, particularly interesting use cases of agentic AI involve predictive maintenance and forecasting for industrial processes – where AI helps to anticipate when equipment might malfunction and to schedule preventive works. While this technology has existed for some time in the form of digital twins, the integration of AI agents is driving a shift from the standardised “dashboards and simulators” offering into active, specialised agents that plan, decide and sometimes execute required changes with minimal human intervention. In one example, agents were able to minimise scrap, water and compressed-air use in a factory setting by continuously testing for micro-level changes in the digital twin.

A key use of these technologies going forward will, of course, be for power management. As an engineer from a European energy technology company explained to us, power can no longer be seen and managed as a utility. He described the significant momentum in demand for their solutions that allow power and processes to be managed together.

In other words, power is no longer a guaranteed resource that can be accessed at the flip of a switch. Its availability is now an active constraint. This means it is also an opportunity for the companies that embrace the technologies showcased at this year’s Hannover Messe and which, if managed well, can really enhance processes, improve efficiency, reduce downtime and boost production rates. As environmental investors, we see strong potential in that.