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Are Utility Companies Doing Enough to Reach Decarbonization Goals?

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The climate crisis is a global phenomenon that requires immediate action if it's to be battled effectively. Industries of all kinds contribute to global warming through harmful production practices that release emissions into the air. Utility companies consistently release carbon, which takes a hefty toll on the planet. To combat its effects, decarbonization is more crucial than ever.

Decarbonization is the process of reducing carbon emissions during production. It yields a carbon-neutral approach, where there is no net increase in releases. Companies can take it a step farther and focus on going carbon-negative, which completely removes or offsets some of the emissions.

With the establishment of the Paris Agreement, countries and businesses all over the world are focusing on ways to reduce emissions and harmful environmental impacts. Although the Trump administration withdrew the U.S. from the agreement, some cities, states and companies have pledged to meet its established goals. However, many of these companies have not made significant progress to meet decarbonization goals.

The U.S. has plans for various sectors to reduce and effectively stop carbon emissions by 2050. To reach this deadline, utility companies must phase out fossil fuels in favor of renewable energy. However, these businesses across the U.S. have been too slow to take action toward decarbonization by this deadline.

A Lack of Action

Unfortunately, commitments to reducing carbon emissions only go so far. Companies must stay on track with their actions, or else climate change will continue to worsen. For utility companies, this lack of action is hindering progress.

The same Deloitte report shows that many utility companies have goals for decarbonization and carbon-free electricity. However, not enough are focusing on the solutions that can bring them these results. In fact, companies like NextEra Energy and Emera are failing to take action.

Utility companies that are at fault aren't retiring fossil fuels fast enough. For example, coal is a dirty resource with harmful emissions. It's also a dwindling field that's not likely to bounce back. Still, the longer utility companies work with coal, the more harm they'll do. The retirement process must speed up.

Utilities also aren't adopting renewable resources fast enough. The two steps should go hand-in-hand — as fossil fuels drop, renewables should increase. However, Deloitte found that companies that are seeking to reach zero emissions by 2050 are not using renewables to their full potential. Solar has a high potential of a 400 GW rooftop capacity for these companies, but they're only using a fraction of that number.

NextEra Energy has so far solely committed to 2025 as a deadline for its environmental efforts. It states that it will achieve a 67% carbon emission reduction in five years from a 2005 baseline.

The industry faces a network of obstacles that ultimately prevent this progress. Resources in urban areas will be critical — if there's not enough funding, then utility companies can't properly invest in things like renewable energy. Smaller operations might not have the connections to drop fossil fuels.

It takes a collective effort — from the companies to policies and regulations — to decarbonize.

Solutions for Decarbonization

Renewable energy is the future of the industry. An increase in wind and solar energy will surpass gas and coal by 2023, according to an International Energy Agency report, so focusing on these sources is critical. Further, improving that number for years to come is possible with the right strategies.

First, policymakers must focus on the switch to renewable energy. With laws and regulations that phase out fossil fuels, utility companies can then more efficiently work toward decarbonization.

Next, utility companies need better ways to monitor their progress. One example is through sensors that collect and transmit data regarding carbon emissions. Former New York City Mayor Michael Bloomberg has embarked on a plan to get these sensors to utility companies. That way, they can make the proper adjustments to stay on track toward decarbonization.

However, these companies need better plans and goals, as well. They should focus on change through phases. The first step should be retiring fossil fuels like coal. Solar is becoming cheaper than ever, so it's a good time to make the switch.

More companies should be encouraged to transition to renewables, as well. Businesses may see improvements by using energy management systems while adhering to standards such as ISO 50001 during renewable transitions.

The next step should be focusing on creating a strong power grid that can meet the demands of more people as well as businesses. Microgrids that run on solar energy are becoming a popular option for communities. Plus, harnessing strong battery power will result in fewer carbon emissions.

Last, utility companies should strive to be carbon negative. This process entails removing more carbon than they produce. Carbon capture and storage is a beneficial way to do so — it requires taking carbon emissions and storing them deep underground where they can't escape.

With these steps, utility companies can fully decarbonize by 2050 and remain that way. 

A Carbonless Future

Utility companies play a big role in the energy industry. From small devices like refrigerators to bigger components like manufacturing facilities, this sector has a significant amount of carbon to deal with. With the right tech and policies, utiliity companies can get on the right track to decarbonizing for a better, green future.

Discussions

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Matt Chester's picture
Matt Chester on Dec 3, 2020

The title asking if they're doing enough is doing a lot of work here-- because the question should be are the incentivized / mandated to want to do enough? They are a business (the IOUs, at least) after all-- so they are prioritizing business decisions over certain decarbonization potential moves. 

Shannon Flynn's picture

Thank Shannon for the Post!

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