Decoding emissions: What you need to know for an effective energy transition strategy

Reducing emissions has become a priority for organisations and governments worldwide trying to determine the best alternative for each type of energy consumption. Renewables are taking centre stage, but investments vary in terms of amount, technology, and energy output, adding complexity to an already intricate decision. Knowing baseline (historical record) emissions combined with understanding scope 1, 2, and 3 emissions is key for determining a strategy for shifting energy sources. 

By transforming carbon emissions into data, organisations and governments can compare them to data from alternative energy source options, helping inform decisions about the best option. The baseline helps visualise the origin of the operation’s direct emissions (scope 1) and indirect emissions (scopes 2 and 3). This part is challenging because reducing greenhouse gas emissions on each scope can—and almost always—differ. That’s where diversifying and prioritising play a crucial role: emissions reduction in each scope can involve a combination of options, including solar, wind, and hydropower. 

Strategy and efficiency go hand in hand during the energy transition, especially when considering sustainability. After determining the baseline and scope emissions, the second step is selecting the replacement energy source. Naturally, some solutions are more efficient or sustainable than others, and that’s where finding an efficiency-sustainability balance can be challenging. Technologies such as smart grids, energy-efficient appliances, and industrial process optimization are among the most popular measures for operations. In transportation, electromobility policies incentivise the shift from internal combustion engines (which could be scope 1 or 2, depending on the sector’s core activity). 

Therefore, the strategy must consider all these options and applications before devising a plan for the medium and long term. Allocating resources is the third step. According to GHD’s 2023 SHOCKED report insights, unlocking funds and markets is key to funding driving the energy transition and is pivotal in sustainability. Experts agree “the money is there.” Yet, it is not flowing with the required ease. Regulatory voids and lack of capital are the main barriers. and Uncertainties are limiting the advancement of emerging technologies that will transform the energy system.  

No one actor can take on the energy transition alone; a multisector approach is necessary. Research is driving innovation, and targets may shift along the way. Therefore, “investments should be considered in the context of wider social, industrial, and environmental benefits to help with popular acceptance and commercial viability. Leaders should also raise public awareness about individual and collective energy usage and how individuals can contribute to the energy transition,” states the Reuters-GHD white paper "Progress Paralysis: Accelerating the Energy Transition," which discusses the challenges and opportunities in choosing the best decarbonisation options. A holistic approach, with no small details, sounds simple enough.