Advances in energy technologies and digitalization are opening up new opportunities for businesses to prosper in a clean economy, a new Accenture Strategy report for The Climate Group shows.
Aimed at the commercial and light-industrial sectors, Transforming Energy Consumption – Opportunities for Companies to Drive Business and Societal Value sets out practical steps across heat, power and transportation that both boost the bottom line and generate wider societal benefits.
These measures lower business risk, lessen energy costs and increase operational productivity, while reducing greenhouse gas emissions and improving air quality.
“Advances in technology and the ongoing evolution of energy markets has placed us in the midst of a global energy transition that is driving businesses to think differently about how they consume energy,” says Kris Timmermans, a Senior Managing Director at Accenture Strategy.
He adds, “Every company’s journey to transform their energy use is unique, but the overarching value case is clear – when companies embark on a purpose-led transition to less polluting, lower-carbon energy systems, they can build stakeholder trust while earning financial rewards and driving competitive agility.”
Mike Peirce, Corporate Partnerships Director, The Climate Group agrees: “The pressing need to tackle climate change and reduce air pollution means we need major companies everywhere to act now to bring cleaner, smarter energy into their operations.
This paper shows there are huge business opportunities up for grabs in the clean energy transition – the winners will be those leading the way, from how they heat and power their buildings right through to the vehicles they drive.”
Against a backdrop of megatrends such as electrification and decarbonization, decentralization of energy production and digitalization of energy management, the report explores the shared value-proposition for companies to invest in cleaner, smarter energy solutions.
These solutions include electrifying vehicle fleets and switching to renewable heat and power, as well as digitally optimizing energy consumption by increasing efficiency and monetizing flexibility.
Electrifying vehicle fleets
The total cost of ownership of electrified vehicles (EVs) is falling fast as technology improves and regulations tighten, the report states. This is building the business case for companies to electrify their fleets, with more than 40 major businesses already leading the way as part of The Climate Group’s EV100 initiative.
Deutsche Post DHL, for example, has established its own custom-design vehicle – the StreetScooter – and plans to replace its entire mail and parcel delivery fleet with EVs. According to The Climate Group’s EV100 Progress and Insights Annual report, the company has also generated 50-80% cost savings on maintenance and fuel, benefits include reducing air and noise pollution.
Ingka Group (formerly IKEA Group) is also leading by example on electric transport. The retailer considers decoupling business growth from emissions to be a trust-building and risk mitigating opportunity, particularly as its e-commerce service grows, customer expectations rise, and cities introduce low- and zero-emission zones.
“It’s crucial to grow our business in a sustainable way – that’s why we’re speeding up the transition to EV in five inner city areas,” CEO Jesper Brodin said in a separate EV100 report.
So far, more than two million vehicles have been committed under EV100, and more than 10,000 vehicles have been switched to electric.
Transitioning to renewable energy
The report explains how solar systems and heat pumps can complement conventional energy assets, substantially lowering heating costs.
A member of RE100, The Climate Group’s initiative with CDP for companies committed to 100% renewable power, Ingka Group also has a goal for 100% renewable heat and has to date installed 157 megawatts of rooftop solar and ground- and air-source heat pumps, lowering emissions from stores as well as distribution centers.
Heat pumps have been found to be one of the cheapest ways of cooling and heating buildings due to improved energy efficiency and reduced operational costs. A retrofitted ground source heat pump for the IKEA Helsinki store will use 100% renewable energy and deliver cost savings of over US$105,000 per year.
Another technology recommended in the report is fuel cells, which convert hydrogen-rich fuels to energy via a high efficiency electrochemical process. Fuel cells can achieve twice the efficiency of combustion-based systems when generating power. With no moving parts, they also operate very quietly with almost no air pollutants, making them an attractive option for companies in urban areas.
Microsoft is using fuel cells at the heart of a pioneering program to generate power efficiently at its data centers, reducing costs and emissions at the same time. Currently fueled with natural gas, Microsoft expects to switch to biogas, landfill gas, or hydrogen in the future, and do away with conventional fossil-fuel powered back-up generators.
Digitally optimizing energy consumption
Digital technology is a powerful tool for reducing energy waste and increasing overall productivity, the report underlines.
With the right analytics capabilities to make sense of data, alongside sensors measuring changes in energy use, companies can avoid any unnecessary heating, cooling, ventilation and lighting. Making use of data to predict equipment failure before it fails helps avoid costly unplanned downtime.
Digitally optimizing energy use in offices, stores and warehouses through the Internet of Things considerably improves efficiency and can help increase employee productivity. LED lighting for example, coupled with sensors, can help optimize working conditions.
A growing number of energy-smart companies are making use of digitalization to increase their energy productivity, as part of The Climate Group’s EP100 initiative with the Alliance to Save Energy.
As a forthcoming EP100 report from The Climate Group will show, many of these companies are reducing their energy bills and generating revenue, thanks to flexibility provided by heating and cooling systems and the latest energy storage technologies.
Looking ahead
While many opportunities are open to companies now, the report also looks at emerging trends that will help businesses break new ground when it comes to creating value.
From sophisticated microgrids and the integration of heat and transport systems, to the use of hydrogen to reduce air pollution and emissions, markets are shifting toward a clean energy future.
“The benefits of transitioning to less polluting and lower-carbon energy consumption are undeniable. Organizations need a strategy focused on activating opportunities that are best aligned with corporate objectives. By starting early, companies can explore and identify the right set of initiatives that will deliver value to shareholders and society,” says Kris Timmermans, Accenture Strategy.
To support strategy development and investment planning, the report recommends that organizations ensure they are scanning for and continuously monitoring the commercial maturity of transformative system solutions.
“Of course, one of the best ways to stay on top of market changes is through our EV100, RE100 and EP100 initiatives and their associated knowledge-sharing opportunities,” points out Mike Peirce, The Climate Group.
He adds, “RBS and Landsec are showing the highest levels of corporate leadership on energy by choosing to join all three, and we expect many more companies to follow as they recognize that to stay competitive in the years to come, they need an integrated energy strategy now.”
