Transitioning to a low-carbon economy is seen as the most effective tool to mitigate climate change. The political commitment behind the transition was confirmed by the 2015 Paris Agreement, which demands that global greenhouse gas emissions fall to net zero in the second half of the century.
We are still in the early stages of this transition and it is not yet evident how all the changes and their consequences will play out. However, it is clear that – next to energy companies – large energy intensive corporates have a leading role in significantly reducing emissions, through energy efficiency programs and/or by procuring renewable energy.
Every year large corporates spend millions on energy. Outside the energy-intensive industries, the majority of firms treat energy procurement as a cost to be managed rather than a strategic area for risk reduction and value creation. However a significant amount of companies – primarily in Europe, Asia and the US – already report renewable energy consumption.
Clear ambitions regarding renewable energy targets have been communicated, implying further growth of renewable energy sourcing in the future, among other things, driven by falling costs of renewable energy sourcing.
A large part of the biggest global corporate consumers of energy have renewable energy targets in place, some of them committed to procuring 100% of their electricity from renewable sources.
A set of opportunities with different investment characteristics is emerging, creating new services and business models within the energy space for corporates to benefit from.
Renewable energy sourcing requires an integrated and phased approach
1. Evaluation of corporate objectives & constraints
2. Sourcing options & strategy
A four-step approach to evaluate/develop local projects:
3. Develop strategy
4. Validation & roadmap