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May 11, 2022

The net zero transition

As the call for a sustainable future grows louder, the utility sector’s primary focus is to ensure clean, reliable and affordable energy. But how close are they to achieving this energy trifecta?

COP26 has definitely created a sense of urgency, with countries committing to achieve net-zero emissions by 2050. However, the first sector study released since the global climate summit last year reveals that only 3 of the 50 electric utilities assessed have targets in line with IEA’s goal of keeping global warming below 1.5 ℃. Utilities and their consumers are feeling the impact of climate-change induced weather events. According to analysis from Trucost, among the capital-intensive sectors, utilities’ physical operations are the most vulnerable to climate hazards such as water stress, storms and wildfires. The end-consumer has to contend with extended power outages due to extreme weather. In January this year, 118,000 homes in Scotland, 80,000 homes in northern England lost power as a result of storms Malik and Corrie. Energy prices have also been a cause for concern, with wholesale natural gas prices reaching an all-time high in September last year, due to a global supply shortage. UK was hit particularly hard with 29 energy companies having to shut down. Electricity bills are likely to rise in the near future, as Europe grapples with an energy crisis compounded by Russia-Ukraine war.

The end-consumer is under pressure to make changes to the way they generate and consume energy. According to a recent New York Times article, many Californians are choosing self-reliance and going off the grid, which is also proving to be more cost-effective. Clean electricity generation and battery storage costs have plummeted - the price of lithium-ion battery cells declined by 97% in the last three decades.  Businesses are adopting circular business models and thinking about the reducing environmental impact across the value chain. Switching to a circular economy could reduce greenhouse gas emissions by 39%. But how committed are utilities to achieving net-zero targets and how do we get there? 

Complex challenges require collaborative solutions

Utility Week partnered with TCS to survey leaders in the energy and water utilities sector and get a deeper understanding of how they are approaching the net-zero vision in an increasingly complex business environment.

The report showed that the growing climate threat to infrastructure resilience and the need to protect operation critical resources from the impact of climate change were key drivers of business transformation for utilities. The third biggest driver is the rising complexity and interdependencies with other systems and organizations.

59% of the respondents said that reducing the barriers to collaboration both internally and with external stakeholders, is one of the biggest lessons to be learnt from the net-zero response. For example, in order to tackle the rising challenge of high winds, heavy rainfall and flooding in its region, Electricity North West (ENW) is collaborating with the Environment Agency and other utilities to create a ‘whole systems’ solution including tree planting to slow water flow into urban areas.

TCS is committed to leveraging an ecosystem approach to empower sustainable choices and demonstrates this philosophy through the ‘Bring your own Battery’ project being conducted in partnership with an Australian power utility. The initiative enables multiple solar connected batteries (including domestic scale assets) to come together as a virtual power plant, which can be used to take the pressure off the electricity grid during days of high energy demand. In addition to improved reliability, consumers receive direct rewards for making their assets available through financial credits to their electricity bills. 

The climate crisis can’t be addressed in silos

The transition to a low-carbon economy requires boundaryless collaboration.

Collective action, where governments, businesses, and consumers work together is the only way forward towards a sustainable future. It will require pooling of resources and technology expertise to fast-track the net zero transition.

To read the complete Utility Week research report ‘Beyond zero carbon: the bigger picture for transformation and adaptation ahead of utilities’, click here.

 

Anandarup Bonnerjee is the regional manager for the relationship incubation group at TCS and has been managing utilities customers across UK and Ireland, Italy and Spain. He has an extensive experience from consulting to major transformation projects across multiple industries such as utilities, manufacturing, retail and pharmaceuticals. He has managed client relationships across Australia, Japan, USA and UK, leading several digital transformation projects. As an active participant in CSR activities, Anandarup has participated in various initiatives globally to help communities that have been impacted by natural disasters.

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