"The energy transition is the biggest economic driver for our industry"

THE GP JOULE MAGAZINE NO. 16 / APRIL 2025

The industry is in a state of flux. Ulrich Leidecker, COO of Phoenix Contact, explains what opportunities and challenges this development entails – and why the energy transition is not only an ecological, but also an economic imperative

Mr Leidecker, the industry is in the midst of a historic change; the keywords being digitalisation, electrification, sustainability. Phoenix Contact is driving this development with its product range. At the same time, you are also active as a producer at the production site in Germany. What is your view of the current situation?

Ulrich Leidecker: We have placed the future vision of a sustainable world electrified by renewable energies at the centre of our business model with the All Electric Society, to which we are contributing technical solutions. However, we are also convinced that the energy transition is the biggest economic driver for our industry. We need solutions for generating, transporting and storing renewable energy, and we need to do this as efficiently and resource-efficiently as possible. The solutions in the sense of an All Electric Society offer many opportunities for our business location to reinvent itself. The important thing now is that we get the right direction and impetus from politicians to counteract both the investment backlog and excessive red-tape.

The all-electric society is a grand vision – to what extent is it already a reality today? And what steps are needed to really bring this future about?

What really marks the All Electric Society out is that we don’t need any fundamentally new ideas for this. Many things are already technically feasible with existing products and solutions. However, it is also true that we need more speed in the energy transition. And low-threshold offers for society, for example in the expansion of electromobility and an fit-for-purpose and affordable charging infrastructure. Politicians must demonstrate their true commitment to climate neutrality. There is still work to be done here. For example, batteries from electric cars could immediately make a significant contribution to the energy transition. Used as flexible energy storage systems, they store surplus wind and solar energy, feed it back into the grid when required and thus help to stabilize the grid.

Another example is the expansion of wind farms. The challenges include complex authorization procedures and lengthy bureaucratic processes that delay planning and implementation. Additional conflicts arise over the provision of land, which makes it more difficult to construct new plants. The industry also has to deal with fluctuating political landscapes that affect investment security and long-term planning.

The mission statement of the All Electric Society (AES) is that the more we use renewable energy sources - namely electricity - to meet our energy needs, the faster we will be able to phase out fossil fuels. It is calculated that the energy that reaches the earth in the form of sunlight exceeds the world's total energy needs by a factor of 10,000. More efficient use of energy – through digitised and networked processes – should accelerate electrification.

Industry 4.0 and network interlinking have long been more than just buzzwords, but there is still a lack of widespread implementation in many areas. How can Phoenix Contact help digitalization to be understood not just as an IT project, but as a real efficiency driver?

By taking a holistic view of the opportunities offered by digitalisation to achieve our net-zero goals. The prerequisite is the complete electrification and network interlinking of systems. The data generated by digitisation is normalised, in other words converted to a uniform readable and interpretable format based on open standards. This opens up opportunities to automate and thus optimize the interaction between different systems – for example the PV system, the charging park for electric cars and the generation of heating and cooling in the building.

We have planned and built a production building on the campus in Blomberg that is holistically sustainable; all trades are digitally and energetically linked. The result is an energy-positive building, meaning it generates more energy than it consumes in operation, and is competitive in a global environment.

Digitalisation therefore helps us to achieve our net-zero goals. We are also focussing on sector coupling at other production sites, such as Bad Pyrmont. By intelligently linking digitalized trades, we have reduced our direct CO2 emissions by 50 per cent from the previous year and saved almost 10 per cent on electricity. Anyone interested can watch this live at the All Electric Society Park in Blomberg. The park is a real-life laboratory in which the possibilities of using our technologies for a sustainable world can be seen very clearly. The park is freely accessible to visitors every day.

The All Electric Society Park in Blomberg is open to visitors every day. Info at phoe.co/AES-Park

The patented HY.RUNNER trailer control system from GP JOULE makes hydrogen transport safe, flexible and efficient – with help from Phoenix Contact components. What technical and economic hurdles still need to be overcome to make such projects and the use of green hydrogen suitable for mass production?

In my view, the challenges currently lie more on the economic and political side than on the technical side. We have the technical requirements very well under control with our solutions. It’s the classic “chicken and egg” conundrum that is currently slowing down the market ramp-up. There is no supply without buyers, but without supply there are no buyers. It needs stimulus from both the business and political arenas to develop both the production capacities for green hydrogen and, above all, the supply side so that an initial market can be established. In addition to accompanying funding programmes, it will take a certain amount of pragmatism around approval and authorisation for as long as there are still no standardised procedures.

What is your bold view of the future? What technological or social upheavals do you expect in the next ten years that will fundamentally change the electrical and automation industry?

I hope that in ten years’ time, the All Electric Society’s vision will have fundamentally transformed our understanding of the use of electrical and thermal energy. I see at least five key factors that will change our industry in the future:

1. Automation systems of the future must be as adaptable as possible to be able to withstand the ever-faster pace of change in the world. This calls for flexible and, above all, open control solutions.

2. Efficiency will continue to be the key issue for production plants in the future. This means we need more network interlinking and cloud solutions in which we collect and analyse production data. Robust and holistic security solutions are called for here.

3. Decentralised systems, such as PV or wind farms, will play an even greater role in the future. There need to be simple and efficient options for remote monitoring; virtual control systems will take over this task.

4. In line with legislation, industries must become more and more sustainable. This requires a holistic approach to resources and energy consumption. And products must be designed in such a way that they can be completely recycled or biodegraded after use.

5. And finally, strategic partnerships and alliances will help to master the ever-increasing complexity of technical solutions. We can only tackle climate change if we work together on the most innovative and future-proof solutions.

Ulrich Leidecker

Ulrich Leidecker is COO and President and Member of the Board of the Industrial Management and Automation (IMA) business area. He is responsible for the Purchasing and Logistics divisions as well as the USA subsidiaries. Phoenix Contact is the global market leader for components, systems and solutions in the field of electrical engineering, electronics and automation and currently employs around 22,000 people worldwide. Sales of €3.6 billion were generated in 2022.