Unlocking renewable potential

At COP28, nearly 120 countries committed to tripling globally installed renewable capacity by 2030. The International Energy Agency (IEA) estimates that the world is on track to reach 8,000 GW of renewable energy capacity by the end of the decade, short of the 11,000 GW needed.

There’s no how-to guide on shifting away from the world’s reliance on fossil fuels. While energy transitions have occurred over the years, such as wood to coal and then coal to oil, history shows that progress tends to inch rather than leap forward.

Carbon-centric economic pressures, political interests, labour markets, capital and existing infrastructure are heavily entrenched in society. Change demands re-wiring, in this case, quite literally. Institutional legacies make it hard and often resist moving away from the status quo. The execution of an organisation’s energy transition plan often relies on external factors outside of its control.

There is plenty that can be done within an organisation’s sphere of influence to move renewables forward. Renewables are just one piece of the decarbonisation puzzle. It’s not as simple as making a switch and being done. The energy transition cannot be achieved in a silo or by one component. The renewables path needs to be one road on your path forward.

The GHD Sustainability Monitor 2024 reveals that 79 percent of corporate executives feel there’s a significant or moderate gap between their sustainability goals and what’s actually happening on the ground. Tied to this are their challenges in switching to renewable energy, which is a key component in building their portfolio to decarbonise operations.

Several renewable barriers exist that hinder progress including policy inconsistencies, cost uncertainties and regional disparities. For example, one of GHD’s global clients is seeking solutions to achieve a balance between reducing the use of traditional energy sources across their restaurants worldwide and purchasing renewable electricity. It is difficult for them to buy renewable energy in some countries, which heavily influences their decision-making related to capital expenditures and operating expenses.

Gathering a systematic inventory of your emissions, energy spending, energy-using assets, utility contracts and metered systems is critical. Know the carbon intensity of your electricity sources and whether the grid currently supplies or is planning to switch to renewable energy. This approach is going to be more complex for carbon-intensive organisations. Transitioning to renewable energy and fuel sources requires more integrated planning and risk analysis.

Leaders should be considering how a switch to renewables impacts their operational performance to balance between short-term needs and longer-term aspirations. High costs, technological and infrastructure limitations, policy uncertainty, economic barriers, internal coordination and supply concerns are areas of risks concerning leaders in the renewable space. To move forward, the rapid buildout of renewable energy depends on mitigating risks related to cost, market and regulations. Establishing certainty is critical to rally the private sector to develop and purchase renewables.

Strong public-private collaboration must happen to create an enabling regulatory environment that will help companies actualise international commitments. Companies can work together as part of trade organisations or sector-based initiatives that partner with governments to boost investor confidence in renewable energy projects. This will also contribute to promoting access and availability or producing an adequate supply of renewable power to meet growing demand.

In addition, it is important to remember that companies are in different stages of their sustainability journey: bold innovators are actively shifting to renewables while their more cautious counterparts prefer to wait before investing resources. No matter where they are on this journey, a good business case helps encourage private sector participation as it clearly articulates the benefits and risks. Smoothing the path to tripling renewables requires that we use existing levers to strengthen investment and deployment of renewable energy.

• Focus on short-term quick wins, while investing in long-term goals and larger transformational strategies that incorporate renewables. Devote resources to large, complex decarbonisation projects while focusing on near-term efforts that will bring you closer to your goals.
• Doing this means you can explore ways to mobilise capital and slice up your energy transition strategy into achievable components, which will help you adopt a more practical approach while working on the bigger, flagship style solutions.
• Develop an energy management program to drive operational efficiencies through cost-effective upgrades and retrofits. Prioritise the riskiest, most polluting and hazardous energy sources from the outset as the lead time to transition is longer and planning can be more cumbersome.
• Collective climate targets are helping to form cross-industry and sector collaboration. These partnerships are vital for sharing knowledge and accessing technologies that can help with your transition. Your plans should be including energy transition technologies across a broad range of options that support long-term transition efforts.
• Identifying integrated solutions is critical. Organisations should explore cost-effective and low-carbon alternatives for scaling that provide greater diversification. Transition plans that combine multiple renewable energy customer sets are likely to provide the best opportunities.

Climate Week NYC and COP29 are avenues to participate in conversations that will define our future. Watch industry leaders discuss the actionable strategies to fulfil the renewables vow in this video. Explore this page and read about how GHD is helping organisations actualise sustainability, COP29 edition.