Why should you care about green energy transition
Almost 75% of global emissions are related to energy production/usage, hence a net-zero world is dependent upon renewable energies to replace traditional power sources. It is important to know and understand not only your scope 1 energy usage, but your scope across 2, and 3 as well.
Committing to the ESC’s vision on climate change is at the centre of KPMG’s IMPACT plan to help non-governmental organisations achieve their goals within our prosperity pillar. We are actively embedding ESG values into our business framework and offering our financial help, skills, and time to provide the highest and best use of our people in the community. We strongly believe that supporting local capabilities will encourage a brighter, greener, and happier future.
We help clients succeed in the energy transition - our innovative and integrated portfolio of services covering financial, strategic, and regulatory advice, tax and accounting support can achieve effective results for government organisations, developers, generators, and the wider investment community.
Further, we support clients in developing their own energy transition strategy and implementation.
Our services within green energy transitions
We are a leading advisor in renewables, and we assist clients in the energy transition by handling their pain points, and answering the important questions of:
- How much does energy contribute to emissions?
- What technologies are available for decarbonization?
- What is the techno-commercial feasibility of such solutions?
- Who do I procure such services from?
- How should I procure? (commercial models, implementation models)
- How do I track and measure progress?
We provide clients with the latest market insights across the sector, including emerging renewable technologies such as offshore wind, hydrogen, and mobility which are also highlighted below.
Renewable energy
Will scale significantly in coming years with offshore wind (fixed or floating) and solar likely to be the winners.
Storage
Multiple storage technologies are developing: each has different advantages.
Hydrogen
Critically important net zero solution for heavy industries, transport, storage etc.
Mobility
Electric vehicle (EV) adoption is expected to accelerate from the mid 2020s followed by Mobility as a Service (MaaS), which in turn will improve autonomous vehicle perception.
Carbon capture, utilisation and storage
CCUS is expected to grow over time as cheaper abatement options are exhausted and as CCUS technology improves and costs decrease.
Other
Advanced biofuels, new electricity generating technologies, energy efficiency & cellular food solutions.
How can we help you transition to green energy?
Our work links the overall energy strategy with a robust carbon reduction strategy.
An integrated Carbon Strategy will evaluate current energy demand and supply against future alternatives by assessing new technologies and markets through the lenses of Eliminate, Reduce, Substitute, and Compensate to help meet emission reduction targets. This can be combined with our services within benchmarking and climate scenario analysis to assess both risk areas throughout your supply chain, and risks with the changing climate.
The lens of eliminate in the Carbon Strategy seeks to avoid GHG emissions by transitioning to new business models or alternative ways of generating energy. This could be through the change from travelling to meetings and instead hosting them online, or to adopt new products and services that reduce energy consumption.
There are some key considerations when adopting the Carbon Eliminate Strategy:
- End user sentiment
- Cost and offsetting capability of alternatives, e.g. cement (Carbon pricing analysis)
- Disruptive Technology (AI, Digital solutions, IoT, etc.)
- New Markets (Piped gas or hydrogen through inter-regional trade)
- Carbon-related risk management
Energy use can be reduced by improving efficiencies, optimising operations, and redesigning processes. This can be done i.e. by switching fuels, such as encouraging the use of petrol, or biofuels in place of diesel in vehicles. Another example is the encouragement of reduction in domestic, commercial, and industrial demand by transitioning to LED, efficient appliances, electrification of plant & machinery.
There are some key considerations when adopting the Carbon Reduction Strategy:
- Energy rating of appliances & Household Energy Efficiency Standards
- Building Efficiency standards & Street lighting infrastructure
- Fuel standards, options and availability
- Producer and customer Subsidies
- Environmental standards
- Circular economy opportunities
The third strategy in decarbonisation builds on substitution, which means decarbonising energy by adopting renewable, low carbon technologies, and products with lower embodied emissions. This can be achieved through corporate Power Purchasing Agreements (PPA) for Renewable Energy procurement, through heat pumps or solar boilers for heating.
There are some key areas of considerations wen adopting the substitution Carbon Strategy:
- Alternative technology (EV, Fuel Cells, H2, CCUS, etc.)
- Cost and offsetting capability of renewables (Carbon pricing analysis)
- Green Financing (Inc. Green Bonds)
- Carbon Pricing
- Carbon Tax
- Carbon-related risk management
Compensation is build around offsetting or removing unavoidable residual emissions. This can be done i.e. through offsetting residual carbon emissions where possible by supporting the development of Sinks (Forests, Ocean) or by investing in verified offset (or inset) schemes.
There are some key areas of consideration within compensation carbon strategy:
- National & Voluntary Offsets and Insets
- Emission trading
- Cost and offsetting capability of Carbon Capture Technology (Carbon pricing analysis)
- Development of sinks (landbanks, waterways, forestry, biodiversity, etc.)
Contact our experts and read more insights here
If you or your company are interested in hearing more about our Energy transition strategies, you are welcome to reach out to our ESG experts.
Morten Eskerod
Partner, Transformation & Sustainability Advisory
KPMG in Denmark
