The Power and Utility Sector’s Road to Decarbonization
The effects of climate change are evident and are impacting communities and ecosystems around the world. In recent years, there has been an increase in extreme weather events, including hurricanes and tropical storms, flash flooding and river flooding, winter ice and snowstorms, and weather-related wildfires. As climate change worsens, these weather events will undoubtedly become more frequent and more severe.
One effective measure to tackle climate change is decarbonization. Reducing carbon emissions and absorbing carbon in the atmosphere are key to reducing global temperature and reaching carbon neutrality by mid-century. The energy and utility sectors will play an integral role in addressing climate issues. Modernizing our electric grid, investing in infrastructure, and a shift to renewable energy, such as solar energy and wind energy, will all be instrumental in achieving net-zero emissions.
What the Energy and Utility Sectors Must Do to Realize Decarbonization Goals
In a 2021 Forbes article, Deloitte’s Stanley Porter indicates that the achievement of net-zero carbon relies on the commitment of stakeholders in energy utilities, and renewables are key. Establishing targets without executing appropriate policies isn’t desirable because it causes more harm to the environment. For example, implementing the Paris Agreement by European nations, China, and the USA is essential in registering a significant drop in carbon emissions. The aforementioned industrialized nations’ reliance on carbon-based fuels is detrimental in the fight against climate change. Additionally, an alliance among the electric utility companies is vital in accelerating the seamless energy transition.
In the USA, power utility companies have adopted measures such as state-of-the-art nuclear reactors, green hydrogen, carbon offset credits, longer-lasting battery storage, and carbon capture and removal. Therefore, setting climate goals alone is not enough. Businesses have to implement practical policies and effective measures to cut their carbon footprints.
Furthermore, the carbon neutrality strategy is based on the "renew, reshape, and refuel” framework. This framework focuses on reducing carbon-based fuel reliance, increasing the use of solar energy, and the use of cutting-edge technologies in utility management. The big question is, is it possible to eliminate the use of fossil fuels?
Electric Utility Shift Towards Renewable Energy
Statistics show that gross green energy consumption in Europe has doubled to reach 22.1%. This positive trend indicates that significant progress has been made, and it is possible to increase renewable energy use. Sweden is Europe’s leading nation in renewable energy consumption with 60%, followed by Finland whose green energy use as of 2020 was 44%. The data shows that accelerating the energy transition and replacement of fossil fuels with green energy sources is the best way forward for utility firms to attain net-zero carbon emissions.
The shift to renewable energy without upgrading aging infrastructure can derail utility companies’ achievement of net-zero goals. Short term strategies such as digitization, use of data analytics, collaboration with third parties, and focus on product innovation are key to reducing carbon footprints. The suggested measures are indispensable in ensuring electric utility firms improve their efficiency. On the other hand, the long-term framework involves the integration of renewables such as hydrogen to the power grid, carbon offset plans, installation of intelligent technologies, and collaboration with regulators to enhance the green energy revolution. For that reason, focusing on innovative technologies and partnership with industry stakeholders is key to the realization of net-zero carbon emissions. Therefore, the future survival of utility companies relies on the adoption of new models and reinventing themselves to address sustainability concerns.
Decarbonization Requires Policy, Strategy, and Action
The health of the population, the health of our economy, and the conservation of our ecosystems should not be compromised. Utility companies should be at the forefront in advocating for decarbonization. One thing that all stakeholders must agree on is that setting goals without actions is futile. We are responsible for demanding clean and efficient energy sources on an individual level. But the road to decarbonization also requires that power and utility firms also commit themselves to shifting the ways in which we generate and deliver energy. Gradual progress is better than empty talks because as we've seen in recent years, extreme weather events are only becoming more frequent and more severe. Perhaps the “renew, reshape, and refuel” philosophy is the power and utility sector's best strategy to realize carbon neutrality.