Let’s keep decarbonisation on track through the energy crisis
Green transition 6 October 2022 Anna Ekdahl
Many companies have now set net zero goals and are gradually switching to green energy. Here’s how they can stay the course – even through our present energy crisis.
By Anna Ekdahl, business development manager for energy intensive industries, Ramboll.
Europe is in a deep and serious energy crisis.
After more than 40 years of reliable, predictable energy systems, many have been caught off guard and face mounting costs or the prospect of losing supply entirely. The impact is already being felt and is unlikely to blow over.
Plan and act now – but do not panic
When I speak to business leaders, one of their most pressing concerns is what they can do right now to take control of their rising energy costs and find alternatives to natural gas in their energy supply. For energy-intensive industries such as chemicals, glass and metals, this question is increasingly existential.
At Ramboll, we advise companies on their energy plans and net zero roadmaps. Naturally, industries across Europe are taking all available measures to make it through the current situation with their competitiveness intact.
But if you are a CEO or leader in these industries, we urge you not to lose sight of the long-term perspective. By taking the below steps, you could make your plan resilient and sustainable, for your business and for the environment.
1. Prepare your plan B, C and D
Prepare a plan B, C and D for your production and energy supply based on different potential scenarios.
The plan should include both short- and long-term perspectives. It needs to be based on a scenario forecast for energy supply and prices and a thorough understanding of your own energy situation with fuel sources, load profiles and energy flows. It should combine production capabilities, storage and logistics with energy efficiency, sourcing, production and storage. You should also identify least-priority systems that can be shut down in case of brownouts and assess your resilience to power dips and deteriorations in electricity quality.
"As in any crisis, it is crucial for business leaders to assess the situation thoroughly and take urgent measures. At the same time, they must keep the long, strategic perspective in view”
Remember also to widen the perspective: Can you build in more flexibility in energy demand to time periods of low electricity price? Could a new energy mix be introduced based on new production techniques? Should you participate in the public debate to influence mitigation measures? Can you include your neighbours in your plan, providing opportunities for heat recovery and storage?
2. If your main challenge is cost, reduce consumption
If you are able to reduce your consumption, it will not only lower your cost and carbon footprint but also increase the likelihood that you can source energy solely from more reliable, renewable sources.
Storage technologies are also critically important. Shifting your peak power demand to those hours in the day where energy is cheapest can provide you with much needed flexibility when planning your production and, of course, in decreasing costs. If there are energy efficiency measures you have been putting on hold, now is the time to implement them.
Current energy prices can easily cut payback periods to a third compared to one year ago. If you do not have specific measures ready, there are many industry bodies in Europe that have made industry-specific action plans to help guide your efforts.
3. If your main problem is security of supply, find alternative energy sources
Re-evaluate your fuel supply and sourcing strategy. Switching from gas to biofuels can be a viable and relatively quick alternative, for instance.
In general, electrification of processes and heating can contribute with both flexibility and resilience. Another option is to build your own, local production – such as solar or wind. But in sourcing energy there is also a variety of available options depending on your appetite for risk and sustainability demands.
A renewable power purchase agreement with fixed prices can provide much needed prognosis certainty.
Find solutions that work now, and do not conflict with long term plans
As in any crisis, it is crucial for business leaders to assess the situation thoroughly and take urgent measures. At the same time, they must keep the long, strategic perspective in view.
If your long-term strategy involves decarbonising and switching to renewable energy to stay competitive – as it should – returning to fossil fuels is not the answer. But already, coal imports to Europe are expected to increase by 43% this year, with clear climate as well as business impacts.
If you are considering making investments to secure the energy supply this winter with coal or diesel, take a step back and look at the whole picture. Ask yourself: can you take a short-term loss for a long-term benefit that future-proofs your company?
We would like to hear what you think of this article. For comments, thoughts or feedback, please email editor Anders Brønd Christensen.
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