Enterprise

Energy transition, a big challenge for consultants

26 May 2021
By Solène Bellanger & Pierre Montroeul, Audencia Grande Ecole students.

Coal, oil, natural gas, water, sun or wind, the ways to generate energy today are more and more powerful and just as necessary. In a world where human development rhymes with energy consumption (1), being able to stop CO2 emissions seems wishful thinking. Unfortunately, the reality is that we must drastically reduce, if not stop, our greenhouse gas (GHG) emissions to reach the objectives of the Paris Agreement of 2016 (2), which aim at "a long-term goal of keeping the increase in global average temperature to well below 2°C above preindustrial levels”.

Electricity is going to become the major vector of energy in terms of consumption in our future. Since the discovery of power flow by Michael Faraday in the 1800s, use of electricity has become more and more common. From the electric bulb to an engine’s fuel, engineers are now being challenged to find a way to make it THE clean energy. Consuming electricity may not emit CO2 but producing it does. Today, depending on your location, electricity is produced by nuclear energy, coal, natural gas, fuel oil or renewables (i.e. solar, wind, hydro).

If we take the example of the US, 35 percent of the country’s total CO2 emissions are due to electricity production. Another interesting number, in Europe, where industry accounts for 20 percent of the total CO2 emissions. Today, the aim of a large part of the planet is to reduce CO2 emissions towards a net zero. The big challenge is now to produce and generate economic value without emitting CO2. To find out more about this challenge, we met a senior consultant at Accenture involved in this project who explained: “At the same time, people want to save the planet and to save their energy bills”.

 

Improving the awareness of people is necessary to decarbonize Europe by 2030

 

As a key part of Accenture’s value framework, the transition needs to be inclusive and behaviors must change. If we do not want customers to pay more, we need a big cultural change, with transparency and optimization of our consumption at every level of our society.

Indeed, providing transparency also means knowing about the source of our electricity. People are worried about their energy bills and they will need to know more about perspectives on sustainable consumption, they wonder about the cleanliness of what they are buying at every hour of every single day. In this daily fight, consultants can act to considerably improve the awareness of their clients, as every new generation is more and more aware of the need for transition. We interviewed Melissa Stark, the Global Lead for Renewables and Energy Transition Services at Accenture: “Electricity has always been this boring thing, but saving the planet is not boring and for now 99% of what we have done has been supply following demand”.

By 2025, she estimates that the number of electric car drivers will surpass 47 million, and 120 million by 2030. Here, the big challenge will be electricity consumption due to charging batteries every day. The aim is to avoid a big consumption at certain times of the day and use renewables only to charge these future cars. One of the solutions could be a change in the way we use energy: the demand could match the supply to increase renewables, especially with the interconnection of European markets.

Targeting carbon-free energy is fundamental, and for that we asked Ms. Stark about her vision of European companies and industries in 10 years: “In Europe, renewable energies will penetrate the electricity mix, representing 75% of it with 55% solar and wind energies, 20% hydropower and a little bit of biomass”.

By 2030, the electricity system will have changed for a completely different power system to continue decarbonizing Europe’s cities, increasing efficiency of power use and distributed energy resources.

 

Consultants need to target companies, cities, countries, and also industrial clusters

 

One of the biggest challenges of consultants by 2030 will consist in targeting European cities to decarbonize them. The European Environmental Agency (EEA) has stated that air pollution is the “single largest environmental health risk in Europe” (3). European cities can move to net zero, improving air quality, implementing smart charging for vehicles, making more synergies across electricity and e-mobility sectors, and supporting a low-carbon recovery thanks to cycling and walking schemes (4).

In fact, the estimated total human health benefits in 2030 may be equivalent to €80 billion if we lower air pollutants across these recovery solutions. Consultants need to target many European countries, which are committing to net zero by 2050 (5).

In Europe, there are more than 3,000 industrial clusters requiring 54 million jobs, which represents a huge target. As a concrete example to decarbonize industrial clusters in Europe, Humber (located in the UK) aims to be the world’s first net zero industrial cluster. Humber will develop a carbon capture storage and hydrogen network, produce low-carbon hydrogen, and also produce green hydrogen through offshore wind electrolysis.

 

If every industrial cluster creates green hydrogen that can be stored and used with resiliency, this could result in a decrease in our reliance on foreign fossil fuel resources, limiting the supply risks (3). Indeed, the senior consultant of Accenture stated: “Long-term storage of electricity is for now the only solution considered to reach the globalization of renewable energies” (5).

As a concrete example of decarbonization at the company level with regional power around the world, the Google 24/7 carbon-free energy target for 2030 can pave the way for climate-motivated companies. Targeting electricity customers or other corporations to follow suit can also be one of the keys to expand these initiatives all over the world.

To sum up, consulting firms play a pivotal role, supporting companies in this energy transition to decarbonize Europe by 2030. Today, improving the awareness of people is one of the keys to encouraging customers to shift to off-peak times for a smooth consumption of electricity.

 

 

SOURCES:

(1) http://hdr.undp.org/en/content/energising-human-development

(2) https://ec.europa.eu/clima/policies/international/negotiations/paris_en

(3) Shaping the Future of Energy and Materials System Value Framework – Europe Market Analysis October 2020

(4) Energy Transition in Utilities – Accelerating the energy transition toward a net-zero emissions future.

(5) Energizing Industry – Generating >€200 billion per year by 2030 through European industrial decarbonization

 

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