Overcoming barriers to success on carbon reduction

In less than five years, the energy transition has become the mission statement for most energy and utilities players, but there are many challenges to tackle before we can achieve it. Clearing those hurdles requires a new approach to business models, a clear roadmap, and harnessing emerging technology, say Capgemini’s UK energy transition experts.

An estimated 73% of greenhouse gas emissions come from fossil fuel combustion for energy use¹.  Carbon levels continue to rise when we need them to fall. Achieving net zero by 2050 means covering more than 50% of energy demand by electricity; there’s a huge, collective task at hand.

It’s something energy and utility companies know all too well. The intensity and pace of industry transformation have never been so important, but the appetite for change alone can’t help the sector scale its toughest challenges.

What are the key barriers to carbon reduction?

Data and measurement. Many organisations suffer from siloed or difficult-to-gather data, making it almost impossible to understand their current situation and accurately measure scope 3 emissions. Realising their strategy means implementing a centralised single source of truth for their end-to-end value chain data across scopes 1, 2 and 3.

Infrastructure and supply chains. Poor access to energy from renewable, biofuel and hydrogen sources continues to limit progression. Local infrastructure conditions and supply-chain constraints – like the lack of UK EV charging and hydrogen fuelling stations – have a big impact on a business’s potential to realise its sustainability strategies. Decarbonisation isn’t just about operations; solutions must tackle the end-to-end supply chain.

Business models and funding. Renewables are the focus of a great majority of new power capacity investments. The length of time it takes for these projects to get funding has a significantly detrimental effect on our ability to reduce carbon emissions. There’s a need for a mentality change towards analysing the total cost of ownership business case, especially for capex-intensive projects.

Behavioural barriers to change. We know individual consumers want to reduce their carbon emissions but we’re far away from that reflecting in our progress. Though smart meters put insights and data into the hands of customers, they must still be encouraged and incentivised to change their behaviour and reduce demand.

How can energy and utilities businesses tackle these barriers?

Before charging ahead with any carbon reduction initiatives, Capgemini recommend first to set out a strategic roadmap for your plan. Once your organisation is aligned, across functions; consider the following four steps:

One. Invest in a specific carbon emissions tool to consolidate siloed data and develop a comprehensive “as is” view. Innovative search solutions like Generative AI can help ensure this data is easily accessible to gain actionable insights and ensure quick, compliant reporting. Companies across the utilities sector and beyond are going one step further to standardise environmental data for improved scaled action. For example

– The Open Footprint Forum creates a common model for environmental footprint data. It goes beyond data standardisation to ensure data is more easily integrated through Application Programming Interfaces (APIs) and a data model which meets the requirements of the world-leading environmental reporting standards.

– The Open Hydrogen Initiative has developed a standardised and credible methodology for measuring the carbon intensity of hydrogen production at the facility level. The initiative aims to provide greater transparency and comparability across different hydrogen production methods, which will help accelerate the development and deployment of low-carbon hydrogen as a clean energy source.

Two. Improve energy efficiency in your operations through actionable insights enabled by strong. Without energy efficiency improvements, energy demand will continue to grow faster than decarbonisation measures can reduce emissions. Data monitoring and management solutions are key for utilities’ companies’ themselves and their customers.For example, Capgemini launched the Energy Command Centre (ECC) – an initiative built on Internet of Things (IoT) based architecture which harnesses a data-driven approach and digitalisation to monitor and manage performance of our energy assets. Since its launch, we’ve reduced our energy usage by 20%.

Three. Re-think your business models beyond efficiency gains towards new, sustainable models. Sustainable solutions cannot always plug into the existing operational footprint. Renewable wind generated electricity does not behave the same as gas produced electricity, nor do electrified vehicles allow for the same operational pathways as diesel fuelled options. The operational model must be reassessed to meet the changed power-train needs. This is where data visualisation solutions, such as digital twins, can reveal actionable insights through scenario modelling. These solutions will not only help utilities companies decarbonise their own assets, but also develop sustainable business models for utilities’ customers.

Four. Invest in renewable energy. Electrification and hydrogen technologies are key for Net Zero and can only be achieved through significant renewable energy investment. Work with policy makers and other sectors to accelerate the development of diverse renewable energy . Digitalisation solutions that aim to speed up the consenting and connections processes are needed and available. There are mature technology options that offer significant decarbonisation acceleration potential. The switch to renewables can be further de-risked by Power Purchase Agreements with fixed electricity rates. These allow customers to predict price fluctuations and plan their energy transition strategy more accurately.

Five. Offset your hard to abate casbon emissions. Carbon offsets serve as a mechanism to compensate for greenhouse gas emissions, particularly those that are challenging or impractical to reduce using conventional methods (e.g., emissions from industries like cement production, steelmaking, and aviation). Examples include financing projects that remove or prevent an equivalent quantity of emissions elsewhere – like tree planting in a deforested area. While carbon offsets represent a valuable tool for mitigating greenhouse gas emissions, they shouldn’t be considered a substitute for genuine efforts to reduce emissions. Prioritise your emission reduction strategies by adopting more efficient technologies, embracing sustainable practices, and investing in renewable energy sources.

Only when employee and consumer behavioural change, improved processes to enact sustainable business models, and strong high-fidelity actionable data come together can carbon reduction be realised at scale across the utilities sector.

Capgemini and carbon reduction 

Sustainability and energy transition is one of the highest priorities for Capgemini. Our goal is to achieve a 90% reduction in all carbon emissions by 2040 and, with the ECC, help our clients save 10 million tons of CO2 by 2030. It’s why we’re passionate about sponsoring Utility Week Awards’ Carbon Reduction category and bringing our recognised thought leadership and vision to Utility Week’s readers.

^{1 https://ourworldindata.org/emissions-by-sector}

How can companies use data to improve energy efficiency? What needs to be in place for them to do so?

Is this where technology comes in? Gen AI and digital twin?