With the start of a new decade upon us, this is a good time for the busy Corporate Energy Manager to take a pause and reflect on the priorities the next decade will bring. On the energy front, it is hard to ignore the impacts that two key drivers will have on energy plans in the next years: (1) the accelerating trend to cut corporate greenhouse gas emissions while adapting operations to handle changing and more extreme weather patterns; and (2) the shifting politics around globalization. Interestingly, these seemingly disparate threads can be woven into a coherent energy game plan.
This article is part of our monthly Energy Expert column. Read more from Peter Garforth.
The list of major corporations committing to cut global greenhouse gas emissions from their operations to net zero sometime within this or the next decade is steadily growing. The list roughly tripled in 2019. As of last September, the list includes about 100 leading companies with a total market capitalization of over $2.3 trillion and more than four million employees. This list increases about 100 fold if we include corporations with commitments to substantially reduce emission, albeit not to zero.
The cost of generating and storing renewable electricity continues to fall and is increasingly competitive with traditional sources. It is not too soon to explore the myriad business and technical options to source most or all the power requirements of each site from local or grid-based renewable sources.
The growing availability of near-carbon-free electricity raises the possibility to switch some thermal processes from fossil fuel to power. An obvious first target is the partial or complete electrification of vehicle fleets. It is worth remembering that infrastructure put in place to support the vehicle fleets could be extended to serve employee vehicles, and may provide valuable engagement opportunities with the local community. Some production processes may also be candidates for conversion from thermal fuels to electricity.
A plan for migrating to low-carbon electricity will generally include a significant component of on-site and nearby sources. This aspect is a part of reinforcing the resilience of the site to changing weather related risks. Completing a plan to migrate to near-zero emission electricity successfully will demand a multi-year phased game plan to take advantage of scheduled production line upgrades and vehicle replacement timetables.
In the real world, there is a limit as to how far industry can electrify larger scale thermal processes. In many industries, these are the cause of most emissions and are core to the production process. Deep reductions in these emissions must entail looking deeply at the process itself, as much as the energy source that feeds it.
The thermal energy source itself is the obvious place to start, beginning with fuel switching from higher-carbon to lower-carbon sources. The obvious steps are to shift to some mix of biofuels and natural gas. Equally, it is important not to overlook the possibility to use heat recovered from within the site’s own operations or those of a neighboring plant. The reverse is also true, that the site’s emissions can be reduced through exporting recovered heat to a neighboring plant or the community in a productive way.
Efficiency, electrification, heat recovery and fuel-switching will take a huge bite out of most sites’ emissions. They will also go a long way to making the sites’ energy systems less susceptible to extreme weather and other disturbances. However, closing the gap to zero may well require the rethinking of some core production processes. Exploring, choosing, testing, and deploying new processes will take time, most likely measured in years. The beginning of a new decade may be the right time to start exploring these possibilities in parallel with the more routine measures.
While the corporate goal to competitively cut emissions may be global, the implementation will be local. Each site’s response must be sensitive to local politics, regulations, technical possibilities, market structures and community expectations. This creates at least one area where the balance between global targets and local implementation can deliver clear local benefits.
The start of this new decade may be the right moment for Energy Managers to build road maps to net zero greenhouse gas emissions for all their sites. Happy 2020!