As my fellow US Climate Action Summit attendees are keenly aware, the urgency to achieve a sustainable future has never been greater. And it is not an impossible feat. In their recent annual report, the Intergovernmental Panel on Climate Change noted that “deep, rapid, and sustained reductions in greenhouse gas emissions would lead to a discernible slowdown in global warming within around two decades.” Energy lies at the center of those reductions, and I want to urge business leaders to act on their crucial role in accelerating decarbonization and reducing climate risks.
With historic levels of federal investment in clean energy technologies and favorable policy over the next decade, businesses have an unprecedented opportunity to take the lead in the energy transition. Here are three ways to develop a diversified energy portfolio, decarbonize your operations and take a comprehensive approach to your sustainable growth plans.
1. Electrify Your Operations for Cleaner, Cheaper Power
The Inflation Reduction Act is projected to accelerate clean energy deployment across the U.S., with a fivefold increase in solar growth rates and a twofold increase in wind over the next several years. And companies like Enel, which announced plans to invest $5 billion into the North American market, are joining the race to decarbonize U.S. power infrastructure.
As the energy transition accelerates and clean energy solutions scale, companies can reimagine traditional business models to create cost-effective commercial applications from carbon-free electricity. Because renewables are faster to market, cheaper to build and reduce dependence on globally traded commodities, the price of renewable electricity will continue to decline. In fact, retail costs of electricity expected to decline by up to 6.7% over the next decade.
There has never been a more opportune time for you to decarbonize and electrify your business. With legislation like the Inflation Reduction Act in place and incentives on the table, various options are available — renewable retail energy, Power Purchase Agreements, microgrids, distributed energy resources, fleet electrification. Every portfolio of solutions will look different, depending on your business and industry. But the most critical factor is getting started.
2. Fast Track Fleet Electrification
Electric transportation is showing no signs of slowing in the U.S., further supported by Inflation Reduction Act incentives and the recently announced $2.5 billion in federal grants toward electric vehicle charging stations. Companies that rely on road transport can cut carbon emissions and greatly accelerate the nation’s transition to EVs by electrifying vehicle fleets.
McKinsey estimates that electric fleet vehicles could cost businesses 15%-25% less than that of equivalent internal combustion engine vehicles by 2030. While EVs often require a higher upfront investment, regular fuel and maintenance costs are typically lower than their gasoline or diesel counterparts. Businesses looking to add multiple EV chargers may be eligible for tax credits for each charger installed, significantly lowering the cost of fleet electrification.
As technology advances, business leaders should also look for vehicle-grid integration opportunities, turning EVs’ electricity demand into flexible load and energy storage solutions. This opens the door for additional benefits, including intermittent renewable energy, grid services and backup power.
3. Become an Energy Producer and Consumer
Across industries, we’re already seeing a clear shift toward businesses becoming “prosumers” — producers and consumers — and playing an active role in acquiring, using and generating their energy. By leveraging distributed systems that generate, store and resell power, businesses won’t need to wait for their regional electric grid to become cleaner or more reliable. Instead, you can invest in on-site sustainable energy production and become more self-sufficient and climate resilient.
Diverse energy portfolios should include small-scale distributed energy resources like standalone batteries, solar panels paired with battery storage and electric vehicle charging infrastructure. This allows you to power operations with cleaner, cheaper electricity and, in many markets, generate revenue when surplus electricity is sold back to the grid.
Collaboration and Leadership to Reach Net Zero
To meet global and national climate goals, business leaders must take their position at the forefront. Policy alone will not be the force of change. Global greenhouse emissions have continued to increase from unsustainable energy use, but businesses can accelerate toward net zero with the wide array of available clean energy solutions. It is time for leaders from every industry to play a major role on our path toward sustainability and climate resiliency.
CEO of Enel North America
As CEO of Enel North America, Enrico Viale leads over 1,600 employees working across renewables, advanced energy services and energy management divisions to accelerate the energy transition and help customers simplify their path to net zero. In 2022, he was recognized as an Environment + Energy Leader Top 50 Honoree for his leadership in driving Enel North America and the clean energy industry forward.
Since joining Enel in 2003, Viale has served in various leadership positions around the world, including Head of Global Generation, Head of Global Thermal Generation, Country Manager and CEO of Enel Russia, Country Manager of Southeastern Europe and CEO of Enel Maritza East 3.
Prior to Enel, Viale spent nine years at Ansaldo Energia in Italy and eight years at ABB in Italy and Switzerland. He also holds a degree in Engineering from the Polytechnic University of Turin and an MBA from the Leavey School of Business, Santa Clara University.
Enel North America is joining us at US Climate Action Summit this year as a Spotlight Partner. Register to watch virtually on April 19 here.