Decarbonisation – Are we there yet?
As world leaders and heads of industry came together at the United Nations Climate Change Conference (COP26) in late October , the conversation was a difficult one. The organisation’s Climate Change office had just reported that despite formal commitments made by the 192 countries under the Paris Climate Accords, emissions in 2030 could be 16% higher than in 2010.
It was a clear signal that the industrialised nations topping the CO2 emissions list – including China, the US, India, and Russia – need to take a harder look at their utility, manufacturing, automotive, agriculture, and other high polluting industries to forge a cleaner path forward. It will take all of us focusing on collective emission reductions to make the impact we need.
Many global utilities are leading the way in setting bold plans to eliminate carbon from their energy production in the next 25-30 years. But the road to get there is not an easy, cheap, or fast one. To truly transition to a net-zero energy grid, it will take utilities potentially decades and millions, even trillions, of dollars. The past year of record flooding, wildfires, and droughts remind us that time is not on our side.
We all need to start thinking about CO2 as the new kilowatt-hour – and as National Grid US president Badar Khan recently noted, “The cheapest kilowatt- hour is the one that you don’t consume, and the lowest emitting kilowatt-hour is the one that you don’t emit.”
As the industry works towards a no-carbon footprint, we need to continue to achieve measurable wins today. This will take everyone – including the regulators – rethinking a lot of long-held beliefs. For starters, restrictions on cloud computing. While the benefits of cloud are extensive, a recent report from the International Data Corporation (IDC) forecasts that the “continued adoption of cloud computing could prevent the emission of more than 1 billion metric tons of carbon dioxide (CO2) from 2021 to 2024”. These savings will come in the form of greater efficiency from aggregating compute resources from separate enterprise data centres to larger cloud data centres that can better manage power capacity and use, optimise cooling, leverage more power-efficient servers, and increase server utilisation rates.
Not only can a move to the cloud help reduce utility costs and carbon emissions, but also support continuous innovation and provide additional safeguards and monitoring to help thwart the ever-growing threat to cybersecurity in an increasingly distributed grid.
Cloud computing and other advances in technology, including IoT and intelligent DERM and SCADA systems, are giving us access to more data than ever before. But we need to analyse it and put data to work much faster. For example, GRDF, which serves 90% of France’s gas market, is embarking on one of the largest smart meter rollouts in the world, expected to reach 11 million households by 2023. GRDF’s goal is to modernise its natural gas transmission network to make it an effective tool for the energy transition. The result will be a fully digitised and connected network that can deliver benefits to customers and the environment by integrating renewable gas, enhancing safety, providing data to better manage gas supply, and linking with other networks to enhance flexibility and storage capacity. Already, this data is enabling the utility to reimagine how it serves customers, while accelerating decarbonisation and increasing the flexibility and reliability of its network.
For utilities to meet these goals, especially in the short term, we need to foster better relationships with customers and bring them along on this decarbonisation journey. A new report by The Brattle Group found that by 2040, actions by utility customers can reduce nearly twice as many greenhouse gas (GHG) emissions than would result from current policies to promote investments in clean energy supply alone. By adopting new technologies and energy efficiency to reduce energy consumption, residential utility customers can account for 534 metric tons of avoided carbon dioxide by 2040, the equivalent of retiring more than half (135) of the US’s coal plants.
The Ministry of the Environment, Government of Japan (MOE) put these programmes to the test in recent years, working with five utilities to engage 300, 000 households in behavioural “nudges” to reduce energy consumption. The result: the reduction of 47, 000 tons of C02 emissions over four years. In many cases, customers are willing to do their part, but utilities need to help guide the way, especially for those already struggling with an energy burden that has only grown during the pandemic.
With investments in clean infrastructure putting more strain on household energy bills, decarbonisation could make the affordability gap worse. Using AI and behavioural science, utilities can better identify and engage limited-income customers with energy and bill saving tips, as well as enrollment in assistance programmes, to ensure solving one problem does not disproportionality worsen another.
Lastly, we all need to reconsider old models and allies in this fight. Like utilities, the automotive industry has long been under fire for carbon emissions, but today, Ford Motors, one of the world’s oldest auto manufacturers, is advertising an electric truck that can power your home in the case of an outage. Telsa has moved beyond electric vehicles to manufacturing everything from solar roof tiles to the Powerwall.
Reading this year’s Global Power & Energy Elites 2022 entries, I am inspired by the progress in the global utility industry and by seeing the art of the possible come to life. But we have only scratched the surface of where we need to go. Policy, carbon taxes, and regulations alone will not get us there. Building new coal plants – which is still happening today in certain regions - certainly won’t get us there. Being creative with the technologies available to us today and continuing to innovate new ones to tackle the problems of tomorrow, will be central in how we crack the code to influence customer behaviour at scale, improve energy reliability and access, and decarbonise in a way that is equitable for all.