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Episode #160: 'Decarbonizing Across Borders for the Climate Future' with Diego Ibarra, Executive Managing Director at ENGIE Impact Americas [an Energy Central Power Perspectives™ Podcast]

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Climate change is one of the true global challenges of our lifetime, where localized efforts can only have so much impact without being globally connected in scale and adoption. That inherent global nature means that the energy industry's best efforts to decarbonize must not be insular but cast a wide net of global partners, strategies, and solutions. As a key leader in the international landscape of climate action, Diego Ibarra, the Executive Managing Director at ENGIE Impact Americas, keeps his finger on the pulse of global energy trends. In the latest Energy Central Power Perspectives Podcast episode, Diego brings a wealth of expertise from his distinguished career spanning top-tier institutions like MIT and Harvard, making him a leading authority in navigating the complexities of decarbonization.

In this captivating and border-crossing discussion, Diego offers insights into the diverse array of clients his teams at ENGIE Impact Americas serves and the groundbreaking work they undertake at the intersection of technology and management consulting. From bridging the gap between engineering and strategy to uncovering overlooked success stories worldwide, listen in as Diego provides podcast host Jason Price and Producer Matt Chester with invaluable lessons for utility leaders striving to drive meaningful progress in the transition to clean energy. Tune in as we delve into real-world case studies, evolving climate goals, and the cutting-edge technologies shaping the future of decarbonization.

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TRANSCRIPT

Jason Price:

Welcome to the Energy Central Power Perspectives Podcast. This is the show that brings leading minds from the energy industry to discuss the challenges and trends that are transforming and modernizing our energy system. And a quick thank you to West Monroe, our sponsor of today's show. Now let's talk energy.

I am Jason Price, Energy Central podcast host and director with West Monroe, coming to you from New York City. And I'm joined once again by the producer of this show, Matt Chester, dialing in from Orlando, Florida. Matt, on today's show, we're going to go global. When it comes to climate action and the need to decarbonize, not only is the need worldwide in nature, but the innovations in the sandbox of trial and error for potential solutions is much wider than just the US markets that we focus on typically. So Matt, tell us what are you seeing from the energy central community on climate action?

 

Matt Chester:

Thanks, Jason. And yeah, you're right. The climate focused discussions are indeed some of our most elevated and engaging conversations on the Energy Central platform. Those conversations, they stretch across all of our different networks and groups within Energy Central. And that makes sense, given how decarbonization and climate action truly do impact every single aspect of the utility sector, from the business side to generation, to the grid, to policies and regulations and more. So truly not a day goes by where we're not seeing, whether it is climate news highlighted in this area, innovative new technologies discussed, debates about the best strategies for utilities moving forward and more.

 

Jason Price:

Thanks, Matt. And so we are definitely eager to take that international perspective and identify what that means for US leaders in decision makers in the utility sector. And we are going to be aided in doing that today with Diego Ibarra, the executive managing director at NG Impact America. Diego has an impressive background, from his education at MIT and Harvard to his early days at the Boston Consulting Group, and now a leading figure at NG Impact, providing an authoritative voice on the state of decarbonization today. So let's bring him in. Diego Ibarra, welcome to the Energy Central Power Perspectives Podcast.

 

Diego Ibarra:

Thank you, Jason. Thank you, Matt. Thank you for having me. Excited to be here today.

 

Jason Price:

Yep. As are we. So Diego, I want to start with your background and give us an overview of the types of clients you have and the work you undertake at NG Impact America.

 

Diego Ibarra:

Sure. So let me start about what we do. At NG Impact, basically we partner with large organizations in supporting them delivering on the decarbonization ambitions. And we do that all the way from strategy to implementation. So in terms of strategy, we mean designing the corporate level and governance models and all the way to the specific investment grade roadmaps for the given decarbonization levers. And then all the way to implementation, which is helping them deploy these strategies and a programmatic approach through their portfolios. And then we bring the lever of data management to be able to track and report on how are they doing against those ambitions.

So to your question of who we do this for, it's mainly Fortune 1000 global companies. So mostly working with market leaders. Sometimes we have that large market lagger that wants to leapfrog and catch up and move quickly towards implementation. And in terms of sectors, of course we support a lot of the hard to abate industries like mining, steel and pulp and paper. But a lot of work is also focused on consumer goods, food and bev, TMT, technology, media and telecom, and the services, retail, healthcare space.

 

Jason Price:

That's very helpful. And as I understand, you run projects comprised with equal parts technical engineers and management consultants. So why is this important? Why is this relationship important and why should utility leaders care that you take this approach?

 

Diego Ibarra:

That's actually a great question and we do, this is the fourth year that we've been doing what we call The Net-Zero Report, where we ask global leaders what are the barriers, what are the barriers to go faster towards the decarbonization and actually achieve your goals? And what comes back is that over 60% of the leaders say that the right skill sets providing internal capabilities is a huge barrier to be able to move towards those ambitions. So by being able to combine both the strategists and the engineers, we're able to bridge that gap.

We're able to help organizations not only think about what is the right technical solution and amongst a comprehensive view to many different technical solutions, whether it's green fuels, mobility, electrification, but also what it means for the company to be able to deploy that depending on where that company is, right? So how it's a centralized decision making organization, it's decentralized. What are the right governance models that they already have in place that you can leverage or you're going to have to set up something completely different and so on and so forth. So just in this space, having the technically accurate answer is not enough to be able to move large organizations at speed and at scale, as we like to say.

 

Jason Price:

Yeah, that makes sense. I appreciate your global perspective. So I'd like to also hear from you on what has and hasn't worked in various regions of the world and what are some of the key areas that you feel are being overlooked here in the United States?

 

Diego Ibarra:

Another good question. So global companies, the ones that are again being serious about the decarbonization ambitions, are looking at their targets and the different timelines. So all of them are looking from their short-term energy efficiency targets to again, normally if we want to stay in track with our net-zero ambitions, it's 50% reductions by 2030 to get to net-zero by 2040 or 2050. And when they look at these targets and they look at their global portfolios, they see that it doesn't matter how much success and how quickly they're moving, in Europe for example, if they're not able to accelerate their actions in the US assets, they won't be able to meet their targets. We've seen this across many different industries.

CPG, again, food and bev heavy industries, steel, cement and the services space. And let me give you a couple examples. So in terms of scope two, renewables, when you look at the Renewable 100 members, 80% of the electricity use is coming already from the EU compared to a little less than 50%, sorry, a little less than 60% in the US. So they need to accelerate even in the renewables target. Having said that, one thing that global companies do recognize is that the US has a very mature market, given the complexity of the regulated and deregulated markets and the fragmentation of the utility space.

Then let's talk about scope one, which is for global companies, their biggest challenge. What normally is working for these companies in Europe is not always working or cannot always be implemented across their whole portfolio in the US. When you talk about biofuels, biogas and bio methane that are highly dependent on the supply chains, again, the US is a very wide and complex ecosystem and they cannot just think that methane applies to every food and bev company in all the states that they own assets. When you think about e-fuels, hydrogen, ammonia, e-methanol and so on, similar story. So bridging that gap in terms of scope one and what they need to do across the different industries is one of the huge things that differs in the US with Europe.

So the other big topic that I know you're very interested in is green hydrogen. The green hydrogen opportunity has been looked at for quite some time in Europe. It's a very challenging journey because it's, as your audience know, it's very knowledgeable. So you probably know it's a scale play, right? There's a lot of suppliers that are willing to make the investment, it's CapEx heavy, but again, producers are willing to make the investments. The challenge is the offtakers, right? Where the companies are really willing to commit early as early movers. And lastly is the operational component. The operational challenges become very quickly of manipulating or operating such a small molecule.

Another lesson learned that we have globally is that taking pilots to scale is taking a lot longer than expected. So the fact that in the US we're just looking at hydrogen valleys and the hydrogen hubs, when this globally is a trend for the last three or even four years, means that there's going to be some work to catch up. From the NG perspective, we've been operating green hydrogen buses in France since 2019. There's another six or eight projects that we've been involved with that are already in operation with green hydrogen projects and maybe another 10 or so in development, where again in the US, that level of planning and thinking and pushing to pilots is arguably just starting.

 

Jason Price:

Okay, so Diego, you talk about scopes one and two, but with our utility listening audience, talk to us about scope three and basically what's the relationship with all this in terms of reporting?

 

Diego Ibarra:

There's a good point. In terms of scope three, I think the US companies are the leaders globally. Let me give you a couple examples. So we probably are familiar with the Walmart Gigaton Project that was launched in 2017, so almost five years ago, five or six years ago, that they were aiming at reducing a billion metric tons of CO2 in their supply chain by 2030. We were working closely with Microsoft in 2021 to produce a robust supplier engagement program that by the way, it's free. So if you are a listener and you're in charge of addressing your scope three, go to and Google Microsoft supplier engagement program and it has a lot of training videos that we develop and Microsoft very kindly made them available to the public on how to engage your suppliers.

And the third example, which is perhaps even the most interesting, is Meta. Meta has been very aggressive in using something that is called in-setting that is a way of actively partnering with players in their value chain to help them decarbonize. And that partnering could have many shapes and forms including joint financing. And perhaps why is that important for the utility audience is because, as you know, your scope one and two is somebody else's scope three. So that's a way of saying if you're having interesting scope one and two reduction projects, but you might be lacking partnerships or even funding, some of these companies that are looking to do in-setting, which is partnered with you to help you carry out those projects, could be an interesting approach.

 

Jason Price:

Yeah, I would agree. It's a fascinating area and it continues to evolve. And speaking of evolving, we're also going to talk about basically metrics and goals. So from a decarbonization to net-zero from clean fuels to electrification, it seems the goalposts are always moving. From where you sit, is that evolution a positive shift or moving towards more achievable goals? Or does it represent perhaps a failure in the fact that we're not either setting the goals, meeting the goals, or know what the goals are?

 

Diego Ibarra:

So going back to The Net-Zero Report that I was talking about, where we go to this 500 executives or leaders globally and we ask them how many large organizations have actual goals, the answer back is around 70% of these global organizations have ambitious decarbonization goals, but only 20%, a little more than 22% are on track to meet them. So the goals and how they are achievable is a great question. And I think when you talk about the changing goals, I would divide that answer in two. At the macro level, many contextual things are changing that are forcing this course to change. So to evolve, from the science is more known, regulation is evolving, standards are becoming new, and the best example of that was carbon neutrality versus net-zero, right? So I've been in this space of decarbonization and consulting for almost 20 years, and until just five years ago we were talking about carbon neutrality.

Basically I could compensate as much of my emissions as I wanted without having to reduce them necessarily. And as we found out more of the science and the science got more known that just compensating your emissions is not enough, that's not going to stop global warming or climate change. Then the concept of net-zero became something that was more top of mind and the right path forward. So some changes because of standards of science are the right ones. Another force of this macro level changing is the stakeholder and the shareholder pressures are increasing. A lot of companies are being forced to move more aggressively or to change the scope, the perimeter of the targets just because of customers regulation, shareholder pressure. And perhaps the third element on that macro level is competition. So some organizations have set some more tempered goals and now looking where their main competitors are going and how the market is moving, they're realizing that they need to accelerate and change their goals.

But that is different perhaps to the second bucket that I like to think about, which is the specific decarbonization lever strategies, your roadmaps in a way. How do I get there? Because those are changing, and sometimes for good reasons. So technology changes, for example. The economics of a given technology in terms of electrification, just to give you an example, the changes of some heat pump technology or battery technology might change your original plan for scaling up and deploying clean fuels. You're electrifying some of your load, which means your scope one, the use of fuels in reducing your scope one might change. And that's a good thing if you're realizing there's a cheaper, more reliable, more cost-effective way of decarbonizing. The way we like to approach that, and perhaps that's for another conversation, is what we call a scenario modeling. So it's hard to predict the future.

So every company I would say needs to understand that you need to do a scenario modeling. "What if I move as fast as I could to electrification? What about if I move as fast as possible with a e-molecule or a clean fuel? What would be the fastest way to decarbonize? What would be the cheapest way to decarbonize?" And then try to identify the no regret moves at a given timeframes and plan ahead to be able to revise those scenario modelings, right? So thinking that you're going to design right now a 2030 or 2040 roadmap that you will not have to change, it's just the wrong approach.

 

Jason Price:

Yeah, very interesting. The other thing that's I think really interesting here is that most of our guests tend to come from the utility industry and have a utility perspective. You, on the other hand, come from perspective of a large corporation who are major users of energy, but these companies are increasingly seeing a push towards ESG goals and clean energy action. So I'd really like to understand how is your perspective on the best way to pursue global climate goals influenced by these deep insights into corporate America?

 

Diego Ibarra:

That's a conversation that we normally have with our clients around three key elements, right? First is you need to have an aligned ambition throughout the whole organization with very strong leadership support. Leadership support all the way from the top becomes a key enabler to be able to achieve almost any decarbonization ambition at a company level. Then you need to design a comprehensive strategy. And by comprehensive, I mean not treating the decarbonization levers in isolation. So not only having a energy efficiency plan and a green mobility plan and so on and so forth, but you need to understand how each one is interdependent and how they inform the big picture. The second piece there is that scenario of modeling that I was talking to you a minute ago, you need to understand that there's no regrets and how you can quickly act on those quick wins.

And then lastly is about setting the right governance and the right KPIs to be able to track the right data and report that data to understand if you are on track to meeting your objectives. And then in terms of how do you go to implementation is you need to think about pilots, as we always do in industry, but you need to understand that you need to move quickly to the thinking about a programmatic approach. There's some things that are very different when you talk about decolonization pilots to a programmatic approach in a large organization. You need to start understanding what are the capabilities that I'm going to have to build to deploy this at scale? What is the financing that I can access to deploy this at scale? Again, what are the governance models? What does the company have in place today and what new measures you need to or framework you need to implement?

And lastly, tracking data and data management at a pilot level is very different than tracking data systematically throughout a whole company operation. So again, those three, kind of align ambition and leadership support, comprehensive strategy and thinking about implementation in a programmatic way, are I think the three key aspects for success.

 

Jason Price:

Diego, we often live in the world of case studies. So can you take it out of, say, the abstract to something that actually happened? Anything you can share that describes your team making this kind of influence at the ground floor and the C-suite of one of your clients?

 

Diego Ibarra:

Certainly a great case to mention is Netflix, right? So we started working with Netflix back in 2020. The first support was exactly that. How do we align their leadership around an ambition? They were asking themselves, "What is the right ambition, what is the right target and what it would mean to get there?" So that resulted in 2021, Netflix announcing their net-zero plus nature strategy, which meant they wanted to be net-zero by the end of 2022, and it had a few components. Reduce and retain and remove emissions. So let me give you an example on how we've been helping them deploy that four years later. In the case of Netflix, 50% of their footprint comes from physical productions. Recording the shows on-site. And we've been helping them with their immobility or their clean backup power initiatives, from training their suppliers and training their staff to what is the right frameworks and governance to be able to track the data and report on that data.

So a very interesting multi-year journey that started literally from engaging their C-suite all the way to making it happen on the ground. And there are a couple other examples. On the mining space, you have Anglo American, we did something similar to their copper unit. And in terms of food and bev, we're currently working with four of the largest food and bev companies in the world on how to think about that programmatic approach for their scope one, so how they move to clean fuels. So very interesting examples. Some of them you can see it in our webpage if anybody's interested in more details.

 

Jason Price:

That's great. Talk to us about technologies and your technology perspective of what you see as something exciting or hopeful that you feel may have some viability over the next five to 10 years to help move decarbonization forward. Are there any that come to mind?

 

Diego Ibarra:

Yes, of course. And perhaps I would start by providing you not a sexy answer that many of you might be looking for, which is we're still seeing that energy efficiency in the next, again, five year timeframe, is the key layer. Companies are still not figuring out how to deploy and capture the maximum potentials of energy efficiency globally throughout their portfolios. That's one. Then more specifically in electrification, I think we all know it's known technologies that it's about how to deploy at scale batteries. And we know that solid state lithium ion batteries will play a very interesting role.

Another piece in the US that we are very far behind is charging infrastructure for mobility. Very interesting to look at many of the business models that have been proliferating in Europe very rapidly on highway charging infrastructures and new business models in that area. And lastly, towards the end of that timeframe. So 10 years and beyond, I think there's no doubt that green hydrogen will play a very interesting role. The end users might evolve a little bit, but I think there's no question that it will be a key role and that green hydrogen will be a global market, whether it's exported in different carriers like ammonia or e-methanol and so on, it is to be seen. But there are some industries like aviation, long duration storage, high temperature processes, that will surely depend on hydrogen in one way or another.

 

Jason Price:

Very interesting, Diego. NG impact is a fascinating company. You're doing some amazing work in the corporate world and helping them decarbonize. It's really interesting to hear the work you're doing. On that note, I do want to stop here and point out that we now hit the point in the show, what we call the lightning round, which gives us an opportunity to learn a little bit more about you, the person, rather than you, the professional. So Diego, we have five questions. We ask you to keep your response to one word or phrase, and are you ready?

 

Diego Ibarra:

I am.

 

Jason Price:

Okay. So what book, movie or music would you bring with you on a deserted island?

 

Diego Ibarra:

Movie would be Blacklist, 10 Seasons. I think that will do for a lot of entertainment. In terms of book, How To Avoid A Climate Disaster from Bill Gates. One of my favorites. Full of interesting data points.

 

Jason Price:

If you could pick one superpower, what would it be?

 

Diego Ibarra:

Time travel. It's kind of like you get the chance to do everything twice if you want to. Learning and experiences and so on.

 

Jason Price:

Who were your role models growing up?

 

Diego Ibarra:

Undoubtedly my parents. Hardworking, smart, but still being able to build and spend time with the family, build a great family.

 

Jason Price:

What was your first job?

 

Diego Ibarra:

I was a PR representative for Spain, for a global beverage company, launching a bar in Spain maybe 20 years ago.

 

Jason Price:

How do you define success in your career?

 

Diego Ibarra:

Making work not feel like work. I think that has a lot of sub elements, like having an impact, loving what you do, working with great people, learning new things every day. But I think a good summary is making work not feel like work.

 

Jason Price:

Well done, nicely stated. Like I said, we give you the final word, we give all our guests the final word. So for decision-makers across the utility landscape who will be listening in today, one piece of advice you hope they retain and take with them from today's conversation?

 

Diego Ibarra:

I guess I would summarize it as decarbonization is a huge challenge, but also a huge opportunity both for organizations and professionals. So for organizations, winners are still to be made, so there's still new business models, competitive advantages that are to be developed. So companies should still very much take advantage of that opportunity. And then professionally, as I mentioned earlier, companies know that the biggest barrier for implementation is individual talent, is building the right skills and capabilities. So if you are a professional that want to accelerate your career, arguably getting smarter in decarbonization is a safe bet.

 

Jason Price:

Excellent. Well, this has been a great conversation and I thank you for joining us today, Diego. I know our community will be pretty active in their questions and comments back to you, and hopefully you'll stay aligned and provide responses back to them should they post any. So until then, we just want to thank you for sharing your insight on today's episode.

 

Diego Ibarra:

Thank you both. Thank you for having me. Great conversation.

 

Jason Price:

You can always reach Diego through the Energy Central community where he welcomes your questions and comments. And if our listeners have any questions, as I mentioned, certainly Diego will respond back to them. As well as we have now something called SpeakPipe. Listeners can head to the SpeakPipe link in the show notes and you can leave us a recorded message, including a question you're eager to have answered on a future episode of the podcast. We'll listen through them, pick out the right questions for the right guests, line them up, and hopefully you'll hear yourself on a future conversation.

We also want to give a shout out of thanks to the podcast sponsors that made today's episode possible. Thanks to West Monroe. West Monroe is a leading partner for the nation's largest electric, gas and water utilities, working together to drive grid modernization, clean energy, and workforce transformation. West Monroe's comprehensive services are designed to support utilities in advancing their digital transformation, building resilient operations, securing federal funding, and providing regulatory advisory support. With a multidisciplinary team of experts, West Monroe offers a holistic approach that addresses the challenges and trends of the grid today and provides innovative solutions for a sustainable future. Once again, I'm your host, Jason Price. Plug in and stay fully charged in the discussion by hopping into the community at energycentral.com. And we'll see you next time at the Energy Central Power Perspectives Podcast.

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About Energy Central Podcasts

The ‘Energy Central Power Perspectives™ Podcast’ features conversations with thought leaders in the utility sector. At least twice monthly, we connect with an Energy Central Power Industry Network community member to discuss compelling topics that impact professionals who work in the power industry. Some podcasts may be a continuation of thought-provoking posts or discussions started in the community or with an industry leader that is interested in sharing their expertise and doing a deeper dive into hot topics or issues relevant to the industry.

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The Energy Central Power Perspectives™ Podcast is hosted by Jason Price, Community Ambassador of Energy Central. Jason is a Business Development Executive at West Monroe, working in the East Coast Energy and Utilities Group. Jason is joined in the podcast booth by the producer of the podcast, Matt Chester, who is also the Community Manager of Energy Central and energy analyst/independent consultant in energy policy, markets, and technology.  

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