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Tech-Talks BREGENZ - Dietmar Zembrot, LightingEurope, President

Rapidly growing technologies and emerging market trends in solid-state lighting encourage new innovations largely driven by applications and technological developments. Dietmar Zembrot, President of LightingEurope and Managing Director of TRILUX Group, shared his insights on changing value chains and business models, Europe’s competitiveness and the main driving forces for current SSL technologies.

LED professional: LightingEurope is a new consortium. Could you tell us about its creation and the main aims and goals?

Dietmar Zembrot: In the past we had two organizations working on a European level in the lighting business: the European Lamp Companies Federation (ELC) and CELMA, the organization of all national lighting associations. This was disadvantageous because we didn’t have one voice in Brussels. The first target was to create a new association consisting of both association and company members, with the aim of having one unified voice in Europe. The second target was to tackle this field as one organization because the value chain is changing and you cannot distinguish between lamps and luminaires. We have also worked together in the past, but now it is more obvious that we need to be united to deal with specific tasks, e.g. the strategy paper on lighting in Europe. The goal is also to communicate the benefits, be it in technology, energy savings, light for life or what we can do for the elderly. Europe has and should have very specific activities in these areas. We are also trying to support other interests at the market level; e.g., the rules for European and global competition should be fair. We are also connected to the Global Lighting Association (GLA) and other associations, making sure that there is one focus. The Vice President of LightingEurope is also the president of the GLA. In Germany, ZVEI is a member so I represent ZVEI on the executive board and there is an association committee that is working to ensure that what is said is consistent with how we follow up nationally. There are a lot of opinions in an area that is disruptive and it is not always easy to find a common one.

LED professional: Does LightingEurope also have an advisory role or an influence in the H2020 trends and directions of the European Commission?

Dietmar Zembrot: We are working with the Commission to bring in topics in that area. We have handed over a strategy paper from the lighting industry to President Barroso. We are trying to point out what we think will be interesting research programs to help shape the future lighting business. For example, SSL-erate is a program to make stakeholders aware. They see LED as a future trend and they see Europe playing a role there.

LED professional: The Green Paper on SSL technologies stated that the EU is lagging behind its global counterparts. As the CEO of a major lighting company how do you see the current global lighting situation and Europe’s place in it?

Dietmar Zembrot: I think we need to be careful about saying that ‘Europe is lagging behind’. What does that really mean? Are we competitive in lighting? Yes we are. It has always been a regional business and the fittings we have in Europe for this market are comparable with American or Asian fittings for their markets. Secondly, if we look at the lamps business, where sometimes the light emitting part is now replaced, from a halogen, incandescent or high/low pressure lamp, with an LED, there has definitely been more focus on European production. Looking at European headquartered companies, I don’t see a major disadvantage in their global competitiveness provided you compare the right things. In the past the lighting market was led by Europe because the Asian markets weren’t developed enough and there was no need for the Americans to invest in T5 technology like Europe did. That has just leap-frogged and they have initially pushed the market forward to the LED market. What happened, and this is a big change in Asia and the USA, is that there are huge programs to support this new technology. Whereas, even though there are programs in the EU and we are satisfied with what has been done, there is room for more compared to these regions and compared to the past.

LED professional: You talked about working with various stakeholders and how a common voice is not always easy to find. Is that because there are so many different kinds of stakeholders? What are the roadblocks to finding a common voice and how could this be solved?

Dietmar Zembrot: This is a complex question. I think, as the technology is not evolving but disruptive, it is difficult to have a common view for the future. As always, changing technology also influences change in value chains and business models. You can see that quite clearly in the past year in Germany. While the market was growing at about 3%, the professional indoor luminaire market was growing more than 10%; the outdoor market was growing nearly 20%, which was an impact of the founding program we had there; and components were shrinking by about 10%. If you look at lamp holders it was an even higher figure, meaning the value chain is changing. In that respect companies need to change but we don’t have experience. Some predictions were not right or were understated; for example, the transformation rate - different parts of the lighting industry are transforming faster than others. Emergency lighting is already close to 100%; outdoor lighting has a LED rate of 60% while common recessed fittings may be below 10%. Depending on where you are in the business you might have a different view. And this makes it more complicated. In the past we had time to react, think about and evaluate the different opinions, but today decision-making processes have to be fast.

LED professional: Value chains and business models are changing. The component business is declining whereas the system side is growing. Can you give us figures for systems transformed into SSL?

Dietmar Zembrot: That would be extremely difficult because we are used to evaluating current turnover. LightingEurope is also working on an EU statistic which is not yet ready. I would say that in the more leading markets, like Germany, you can expect to have an LED ratio of around 35% on the installation side of newly installed business.

LED professional: What about an overall figure?

Dietmar Zembrot: It is very difficult to give a general statement because we have never compared our new installation business to the existing luminaires. It is definitely below 10%. We need to be extremely careful because market growth doesn’t necessarily mean growth in every field and it doesn’t necessarily mean volumes. This 35% on luminaires probably translates to something like 25% in actual numbers. This is a lower figure because investments for LED fittings are higher. So this should be compared at an individual business or lamp source level.

LED professional: You also said that there are different kinds of applications and target groups for selling luminaires. The ‘residential’ group is still lagging behind because a lot of luminaires are still built the conventional way using retrofit lamps. Is that the right way to go or are these, often, smaller luminaire manufacturers that don’t have resources for research?

Dietmar Zembrot: I think the total industry is struggling with the effect that this light source is developing and the benefits, especially the financial ones, are only with time. We are a very investment driven business and not ‘total cost of ownership’ business. Secondly, lighting can do much more than was ever possible! If you talk about residential and consider something like the system, which is programmable and controllable via Internet, the complexity is changing compared to an incandescent lamp. So what we see is that there is a fast LED transition rate but due to the structure of the companies, a lot of retrofit lamps are still used. The complexity of developments and investments for new luminaires are higher due to more complex technology. If volumes are low this can also be an issue. But in the end, the consumer has to take a decision.

LED professional: We are already at a high efficacy level with LEDs and it is becoming more and more difficult to gain additional relevant savings. Of course it depends on systems but we may reach 240-250 lumens/Watt system efficiency before we hit physical limits. It is relevant for energy savings but from a monetary point of view it doesn’t seem to make a big difference. How do you see this in the future?

Dietmar Zembrot: The effect of light on human beings is under-valued in domestic areas. Investments in sanitary facilities or kitchens are much higher than lighting in homes. Maybe it is a lack of awareness or willingness. I am sure we will see some changes there. It is not just about energy efficiency, it is also about the other effects of lighting, which we have to make common knowledge. Finally, the most efficient systems on the market are close to 150 lumen/Watt, which is nearly double what they were in the past. Looking at the cost for the customer, you also get the benefits of industrialization. This means higher volumes will create a better price in every component but also in the fittings. Customer use is still rapidly growing, not just from an efficiency and investment point of view, but also aesthetics, light quality and other features of luminaires. One of the favorites is street lighting. Most light sources weren’t controllable in the past and now LEDs are a fully controllable light source and can be combined with a lot more intelligence. Currently we see a huge demand for outdoor controlled lighting systems, which will enable new energy savings. If you combine lighting control, fitting sizes and direction of light, there are much more than pure energy efficiency considerations for the source and much more that we can do with these light sources.

LED professional: So you agree that it is still most often a question of system efficacy and efficiency and the future has to focus more on the opportunities that we have with this new light source than on the efficacy gains?

Dietmar Zembrot: I couldn’t have said it better myself!

LED professional: You also mentioned about understanding the effects of lighting on people. How would you define human centric lighting and smart lighting?

Dietmar Zembrot: I think this is an overlapping field. For human centric lighting you probably need smart fittings or smart electronics and control. We are also driving this with ZVEI. LightingEurope is preparing market research in this field with external funding. We are also funding certain research areas. The biological effect of Human Centric Lighting is a huge field. Dimming, color and aesthetic effects are comforting so whenever a fitting reacts to the user’s needs, I would say it is human centric. Biologically, there are huge strides that could be made in elderly homes or in hospitals. It is an effect that is sometimes questioned. Some people might say ‘I don’t want my children to be influenced by lighting at school’ but people are always influenced by their environment.

LED professional: What about Smart Lighting?

Dietmar Zembrot: Smart lighting for me, is more on the technical side and I definitely need smart solutions for what I described earlier. But it goes beyond that because smart lighting doesn’t necessarily need to target human beings. For example, if you control peak needs in companies or if we combine traffic control with luminaires there are several possibilities to make lights smart and reactive or even to overcome the effect of people not switching off installations. So ‘smart’ is everything where I react with the environment on a human side but it could also be purely technological.

LED professional: Could you comment on the outcomes of the ATKearney market study (Human Centric Lighting: Going Beyond Energy Efficiency), particularly on the estimated revenue expected with Human Centric Lighting?

Dietmar Zembrot: In principle, in 2020 it could be one third of the high-end lighting business. So it is a significant portion, which is strongly related to information and the political environment. Coming from the lighting business and knowing the positive effects for ageing diseases, we could think about being more regulative in seniors’ homes. On one hand this influences the thought processes of people and also strongly influences the people who care for the elderly. How the stakeholders are informed is important as well as the question of if the government will really help Europe to implement by funding research and technology programs. If the next research programs and funding in Germany could switch to intelligent lighting, it would help us to develop and invest in the technologies faster.

LED professional: We have discussed a lot of requirements and each of these needs additional changes or research in the technology field like the influence of lighting in elderly homes. Are we ready with the technology? What else needs to be developed to really fulfill these requirements?

Dietmar Zembrot: I would say we are ready from the research and technology points of view, to implement a strong change on the use of lighting. However, all options are not fully explored and we have not reached the end of this road yet. We could do much more with controlled lighting systems or energy efficient light sources. We have not really explored what could be done for the future. Every day we have a new surprise and find better solutions. The customers will determine what else has to be done. The challenges are out there, competition is strong enough in Europe and globally and I think all of us in the lighting industry are standing up fighting every day to cope with the speed and to move forward.

LED professional: With regards to standardization, on the one hand there is a push towards it. Is this an efficient way to move forward and is it even possible to have global standardization?

Dietmar Zembrot: I think there are definitely areas where, for example, Zhaga has made its way but in my opinion we will not have such a highly standardized business as in the past. The lamp, for example, was standardized. Now we have rapidly growing new opportunities and we’re growing new form factors in fittings or other solutions like human centric lighting. It is impossible to provide all these solutions with standards. Therefore, the field will be more open and I predict that currently technological development is faster than the development of standards. It is hard to predict the final outcome but I think there is opportunity for both.

LED professional: Could you comment on wireless vs. wired and the trends that are going in that direction?

Dietmar Zembrot: This is based on regions. For Europe, we have to clearly state that the trend is towards renovation and not towards ‘new build’. Wireless does have an advantage in renovating installations. We also see that a lot of people are getting used to control with wireless devices. So this might also push it in that direction. On the other hand, you also have power over IP, which is strongly supported in the US. I would say there will be more diversity than in the past.

LED professional: Suppose industries such as Trilux have to support standardized solutions. Will there be more variety in the end?

Dietmar Zembrot: When there is a standard available that we think fulfills the customer need and we can hardly do better, as a company why should we try to develop something just for the sake of being different? Technology is moving fast so we can think about better lighting or electric control. If we think we can fulfill a customer need better than a standard, that will drive us to non-standard solutions. You don’t want to wait but want to be the first. It is not about the big and the small but more about the fast and the slow! And it is not just us who discovers new things; it is also customers who discover new applications. Yet there are a lot of people who make something like wireless controlled domestic lighting systems with even a programmable interface but the young people will see that completely differently and use light in completely different ways.

LED professional: Would you say that in the past the lighting designer was limited with restricted opportunities? With the great flexibility that LED systems can offer, are they now bringing back new requirements?

Dietmar Zembrot: In the past a very simple thing like having a homogeneous round lit surface was a challenge. It is no longer so. Instead we are asking how to direct light and what could the different building factors be and what is the right resolution. In the past, next steps like changing light colors or light directions were linked with huge investments and larger sizes. The investments and sizes needed today are not comparable to what we had in the past. And as we can create customer benefits with less investment, the lighting designers will grab these opportunities as they are close to the end users.

LED professional: It is said that many LED luminaires are not good enough in CRI and the distance or difference in MacAdam’s ellipses from one light source to the next is under discussion. The same goes for fluorescent lamps. Do people expect LEDs to be better?

Dietmar Zembrot: The discussions that we heard especially at the beginning of this technology were about color rendering, the artifacts on lenses, and color shifts depending on beam angles. But technology is moving very fast and I would say if we look at the first marketable LED fittings compared with what we have now, having been in this business a long time, I have never seen such huge steps! The fittings we launched 4 years ago at a light fair in Frankfurt and those we have now are not comparable in terms of light quality, CRI or the way light is directed. We now have solutions where we don’t even see the light source anymore and have soft light distribution in a room. We can go 20 centimeters below the ceiling without a hotspot above the fitting - this was not possible in the past. The opportunities are huge!

LED professional: Structures within companies and industry, like the value chains, are changing and a lot of areas that were segregated earlier are becoming more integrated. Is it challenging to bring in changes?

Dietmar Zembrot: I think there are more drivers than the end user. There is energy efficiency and there should also be political, social and ecological responsibility driving us. No processes will be the same as 5 or 10 years ago. Independent to research, purchasing or production, we will have other technology, other machines, logistics - everything has to be changed and adapted to that new technology. There will also be new business models. Financing of light, leasing etc. will once again drive and change us. We’re either a part of this business model or we are out. Companies have to change completely. ‘Experience’ is a word which you like more the older you get, but I have to also say that a lot of my experience can be discarded because now there are possibilities which weren’t there in the past.

LED professional: From an engineering point of view, on a system level, we have optics, electronics, light engines with LEDs, thermal management etc. Which engineering area needs the most work or lacks information?

Dietmar Zembrot: The biggest change is to think from an individual task towards creating a system. ‘I make an optic’ to ‘we create a system’ is the biggest change and one influences the other. Thermal requirements are more sophisticated than ever. We are creating more knowledge with every building, structure, size or design. The LED itself tells you nothing. If you have one that is 10-20% less efficient, it could still be the better solution in a system.

LED professional: How do you see fully integrated systems using microelectronics or semiconductor knowledge from the control, drivers and sensors side? Will lighting finally be a fully integrated ‘computer’ where it is all controlled with software?

Dietmar Zembrot: The entry barriers for lighting as a whole have changed. In the past, the lamp was quite a complex entity and the control required a close interlink with the lamp. You needed a new competence for the fitting. The control and operation of an LED is much easier now than a high-pressure or low-pressure lamp. In the end it always comes back to customer needs and how to best meet them. In the past it was either a non-lit outdoor façade or we lit up a building from a point. Now we can very deliberately light from points far away or very close because sizes are small. We can control the light and make it change. So I would not say that there is a ‘one size fits all’ solution. Once again, the more aware the people are of what we can do, the more diversified the applications. This will require different solutions and building blocks.

LED professional: You said you don’t see just one light source, which brings us to the OLED. Currently it seems like a niche product but what about the future?

Dietmar Zembrot: OLEDs are predicted to leave niche production and have an impact on the lighting industry. I could imagine that there are requirements that are not easy to fulfill with LEDs, like 3-D structures. The question is also about performance and price compared to LED solutions. LED also started with backlit TVs, automotive areas etc. so the automatization and industrialization of OLEDs is moving forward and the more benefits this technology has, the more it will be used. The studies are saying that between 2016 and 2018 there will be a significant impact in general lighting. Honestly speaking, my first experience with LED luminaires was 16 years ago. I would say that in the last couple of years this has really exploded and the turnover is already 40% in some markets. But the uptake was more in the last few years and not linearly for the last 15 years. OLEDs are not a big player in the general lighting market at the moment but there are very interesting fittings out there for some niches. There are very different opinions from market research but in my opinion it is not a disruptive but an additional light source to the LEDs, especially for special applications.

LED professional: ‘International Year of Light (IYL) 2015 – Strategies and Technologies’. What are your expectations from the IYL initiative and are there any events or any initiatives planned at an industry level or by LightingEurope?

Dietmar Zembrot: I think the IYL is a good thing because we are getting some awareness on lighting. Through the LED trends we have much more focus on the subject now than in the past. I expect that the IYL will drive that further not only from a customer point of view, but also from the view of young people and researchers having more interest in making changes to this business. This is the expectation we have and we are following up closely to see where we can position ourselves as LightingEurope or as the German association or as an individual company. There will be events where we will participate but the expectations are that we get more awareness, more interest and, in the end, better technology solutions. I am quite sure that this will happen having experienced some other successful actions taken on a European level.