Greening the Grid – Steps Utilities Can Take
52% of Americans believe their electric utility is environmentally responsible (Energy Pulse 2018).
Here’s a refreshing bit of news: when asked “what is the most compelling reason to invest in clean energy technologies, such as renewables and storage,” the number one answer given by utility executives is “consumer demand and sentiment.” The number two answer in Utility Dive’s annual State of the Electric Utility Survey is also encouraging: “sustainability.”
I’m thrilled to see that utilities are listening to what customers have been telling them via our surveys and the polling of countless others. I’m also thrilled to see that many are listening to their moral compass.
We’re seeing a lot of commitments and action on this front as well: one of our clients, Consumers Energy, has committed to being coal-free by 2040 and reducing its carbon emissions by 90% by then as well. This decision was very much driven by a desire to do the right thing for current investors and customers as well as for future generations. Consumers Energy isn’t the only one; many utilities are heading down a renewables path and/or a carbon reduction path because customers demand it, they believe it’s the right thing to do … and they don’t want to see their largest commercial customers bail on them in favor of purchasing wind and solar directly from third parties.
So, there’s a clear business case for continuing to green up the grid, and there’s a clear moral justification. Yet Utility Dive’s survey reveals a fair amount of hand-wringing on the part of utility execs about “uncertainty.” We all hear this same concern expressed by other carbon-intensive companies – there’s no shortage of sound bites from executives asking for some sort of carbon tax to create “certainty.” We also heard the certainty argument from the automotive industry related to CAFE standards. Every senior leader in every organization wants certainty. I get it. I’ve run a company for 28 years and I face anxiety-producing uncertainty every day. Ask any small business owner and they’ll tell you the same thing. That’s business.
From Shelton Group’s viewpoint, though, there are so many things that ARE certain:
- 86% of Americans expect companies to stand for something more than just making money.
- 61% agree that in 10 years most of our country’s electricity should be generated by utilities through solar fields and/or wind farms.
- 82% of Millennials feel anxious about how climate change will impact their children’s quality of life.
- Only 13% of Americans today deny that climate change is real and caused by man.
We’ve watched these trends for more than a decade now, and I can tell you they are all moving in an upward right direction. If I were running a carbon-intensive company I’d pay attention to those trends and use them as my guide for long-range decisions, despite what regulators do or don’t do right away. Nobody wants to be remembered as the CEO that missed the writing on the wall. Nobody wants to be permanently branded as a polluter. And nobody really wants our children and grandchildren to suffer in the future from our inability to make hard decisions today.
Make the right decisions, build the business models to make those decisions work, and dedicate yourself to selling those decisions and business models to the regulators whose blessings you need. That’s how you create certainty.
On a similar note, read how utilities can take advantage of vehicle electrification initiatives to reinvigorate their renewable energy goals. Not only do utilities provide the “fuel” for electric vehicles. As the Edison Electric Institute makes clear, “utilities can achieve a ‘quadruple win’” by embracing electrification – “making better use of existing grid assets, pleasing customers, cutting costs, and reducing environmental impact.”
Congratulations to Etsy for its commitment to tackling the problem of carbon emissions from ecommerce shipping – a growing problem in the United States. According to the company’s research, “98 percent of Etsy’s total emissions stem from items shipped” from sellers to buyers. Now, with each customer purchase, Etsy will buy carbon emissions reduction offsets through partner 3Degrees. The offsets will benefit environmental projects globally. Read about those projects here – as well as Etsy’s overarching sustainability program and initiatives.