Utilities need to adapt as businesses continue to focus on sustainability, looking for cleaner energy sources and viewing such measures as an opportunity to create value, according to a Deloitte study released June 11. What’s less-focused is residential consumers willingness to adopt sustainability improvements, with cost and convenience playing a large role in their choices, according to Deloitte.
The “Resources 2019 Study—Balancing climate, cost, and choice,” found most business respondents agree that reducing their carbon footprint and addressing climate change is important, in part because it’s what their customers demand. It’s also an important consideration as commercial and industrial entities look at ways to save on energy costs as they build their own power generation systems and work with local utilities on their energy needs.
“The survey shows renewables and climate are important to businesses,” Marlene Motyka, Deloitte U.S. and global renewable energy leader and principal with Deloitte Transactions and Business Analytics LLP, told POWER on June 10 in an interview at the Edison Electric Institute’s annual convention in Philadelphia, Pennsylvania, prior to the report’s release. “[The survey] showed 84% were aware of the IPCC [Intergovernmental Panel on Climate Change] report.” That report warned of negative climate-related impacts caused by global warming.
“Businesses are evaluating their energy management,” Motyka said. “And we also see that businesses, those that are not utilizing renewable energy, their customers are demanding it. Businesses using renewables are finding it economic; the economics and sustainability are very strong. Renewables are economic.”
The Deloitte report, an annual study conducted since 2010, surveys about 600 U.S. businesses in multiple sectors, along with about 1,500 residential electricity customers. The study is designed to help energy companies, businesses, and residential users make decisions about energy-related investments.
Motyka noted that about two-thirds of business respondents to the survey said their customers want a certain percentage of their electricity from renewable resources. The report said about half of the businesses surveyed are trying to meet that goal.
Residential power users may be hesitant to invest in sustainability efforts, with concerns about cost, and most of those surveyed said they want government and the business sector to take the lead in pushing efforts toward clean energy. Those surveyed said the government has a responsibility to develop the country’s energy strategy, and adopt policies aimed at sustainable technologies.
Stanley Porter, vice chairman, U.S. energy, resources and industrials leader for Deloitte Consulting LLP, told POWER, “Utilities, regulated utilities especially, have to make capital and O&M [operations and maintenance] decisions, and they’re trying to add agility. Now there are demands from the customer side about where you have to make capital investments. Utilities have to gain, gather, and analyze customer information unlike they have in the past. It’s a challenge and an opportunity on both sides.”
“Utilities should be involved,” said Motyka. “They should be part of the decisions, taking control of their situation. Utilities are becoming more sophisticated, but they can’t do everything themselves. Customers want clean energy, and a renewable [energy] partner, and it’s great if their utility can help them find that solution. Customers, a lot of times they don’t understand the options, and they’re asking their utility, ‘Help me understand the options.’ ”
Climate Change and Energy Management
The report had several key findings. They include:
- Of the 84% of business respondents aware of recent global climate change reports, almost two-thirds reviewed or changed their energy management strategies in response, and 83% increased their commitment.
- Energy management remains a top priority, with 9 in 10 businesses reporting goals to reduce electricity consumption. Most of the businesses surveyed are also expanding resource management goals in other areas; water management has taken a big jump, up to 75% this year, an increase from 59% in 2016.
- Residential consumers are concerned about climate change and their own carbon footprints. The report said 67% are very concerned about climate change and their personal carbon footprint, though those asked about the “importance” of renewable power resources said renewables are less important today (48%) than last year (53%).
- Keeping total energy bills affordable rose to 63% this year, up from 58% last year. It is still the most important energy issue for residential consumers in the survey.
The survey found those considered millennial are concerned about climate change, and they rate the use of clean energy and new technology higher than other age groups. More than half—53%—of millennials said renewables are extremely or very important in their electricity supply, while 40% of those age 68 and above gave that response.
Businesses continue to move away from sourcing power from traditional providers as more and more companies have on-site renewable generation, off-site renewables, and/or on-site cogeneration. Respondents said they expect to receive just 35% of their power from traditional generators in 2021, down from 40% in 2018. Those businesses cited diversification of energy supply, cost savings, and price certainty as the top reasons for generating their own power.
“On the business side, you’re seeing utilities react, they know this is real,” Porter said. “Particularly in the C&I [commercial and industrial] space, this is becoming beneficial. The capital deployed is worth it. Utilities are discovering what role they can play in this evolving landscape.”
Interest in EVs Grows
The Deloitte survey also found increased interest in electric vehicles (EVs), with more than a quarter of respondents saying they were extremely or very interested in buying an EV. Concerns about EV ownership continue to center on cost, the convenience (or inconvenience) of recharging, and vehicle driving range. Not surprisingly, respondents said their interest in buying an EV would grow if gasoline prices move higher.
“One question that pops out as a barrier to people purchasing an EV is not the cost, but the [recharging] infrastructure, the ability to charge somewhere,” Motyka said. “[But] who builds the infrastructure, and who owns it? That’s one thing that needs to be answered. What role do utilities play in that? As [EV] adoption picks up, and understanding that when you have more distributed generation, what is the role of utilities in that infrastructure?”
Said Porter: “The progression of EVs is dependent on batteries and storage. And what is the regulated scheme around storage? What is the regulated structure equation for utilities? And also the entrance of new participants, the new [players] in that market.”
As for those regulations, Porter said the survey clearly showed energy users want government to play a role in the strategy. “Eighty percent of the respondents said they do want to see involvement from policymakers,” he said. “Consumers want to see, is there a path forward. They want to see it on the agenda, a plan to make power more accessible and affordable.”
—Darrell Proctor is a POWER associate editor (@DarrellProctor1, @POWERmagazine).