There’s no denying that the energy efficiency programs deployed in the utility industry have achieved what they set out to do, and that is to save energy. But when it comes to reducing greenhouse gas (GHG) emissions, more can and must be done if the industry wants to meet the net-zero targets it continues to commit to achieving.

As one of the primary sources of GHG emissions in the United States, second only to transportation, the power sector knows it has a responsibility to transform. It’s no surprise that more than 300 US utility companies are preparing to meet a state’s 100% carbon-reduction requirement. Yet few companies are on a path to meet those targets, as a Sierra Club study points out. 

In this article, the GHG emissions management specialists at SINAI define carbon emissions in the power and utility sectors while providing a set of five principles utility companies can and should adopt to achieve the deep decarbonization needed to tackle climate change. 

Power and utilities carbon emissions definition 

Most power and utility companies use the following two definitions of carbon neutrality: 

1. A power utility firm is carbon-neutral when the carbon emissions released by the generation of power sold by the firm are zero or their emissions are offset by sustainable carbon sequestration.
2. A gas utility firm is carbon-neutral when the carbon emissions released from the use of the gas sold to their customers are offset by sustainable carbon sequestration.

The challenge with these definitions is that they do not include suppliers' carbon emissions within their value chain or the utility’s fleet vehicles. However, conversion to an electric fleet could eliminate these.

Reducing emissions in the utility sector: principles and metrics 

To make a meaningful impact when it comes to tackling climate change, power and utility firms should consider the following five principles in developing metrics to achieve deep decarbonization across their firm’s operations.

Principle 1: Corporate and State alignment 

The first principle power companies must adopt is aligning their energy efficiency portfolios with the decarbonization goals of the states they operate within. Metrics within their carbon strategy should provide direct comparisons with state climate policy commitments if they intend to meet their carbon reduction goals. 

Principle 2: Market transformation 

Once a power or utility company has metrics aligned with state climate change commitments, the firm should ensure their metrics also capture progress towards actual market transformation activities that can drive long-term carbon emissions reductions. These include metrics that capture progress toward equity goals and emissions reductions that result from all types of climate-forward efficiency activities.

These goals must go beyond the activities that maximize direct reductions in the immediate program life cycle to ensure sustained deep decarbonization. A commitment to long-term marketing transformation will help your firm develop a competitive and cost-effective technology roadmap.

Principle 3: A robust data pipeline 

To develop and maintain a comprehensive low carbon strategy, power and utility firms must commit to metrics that are supported by access to sufficient data to calculate metrics for the duration of the programs. 

A robust data pipeline also lends itself to gaining access to green financing and achieving your firm’s net-zero targets.

Principle 4: Capturing cumulative emissions 

With access to a robust data pipeline, utility companies must also develop metrics that capture the full lifecycle impact of climate-forward efficiency measures on their carbon emissions.

Principle 5: Accuracy commitment  

Finally, power and utility firms should commit to developing and reviewing metrics regularly to ensure they continue to match the level of accuracy required by agreed policy goals. 

Committing to working with and providing the most accurate data available can help your firm better demonstrate the ability to meet growing demand while reducing your carbon emissions.

Discover decarbonization opportunities 

SINAI can help your utility company identify the right decarbonization strategy, allowing your firm to analyze your GHG emissions data quickly and easily. We currently help wastewater company BRK Ambiental collaboratively model and update mitigation projects across their multiple teams with our cutting-edge software solution. 

We can help your power or utility firm stay on top of investor scrutiny, evolving competition, and existing and future policy demand while simplifying your reporting for CDP, SASB, GRI, TCFD frameworks. To learn more about digitizing decarbonization within your firm, reach out for a demo of our all-in-one platform today.

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