Billion-dollar Corporations Prioritize Energy Mix Strategy

The largest global corporations are meeting the transition to a low-carbon and resource-efficient economy with proactive energy strategies, Ernst and Young conducted a survey of executives involved in corporate energy strategy at 100 companies with revenues of US$1 billion or more. Questions focused on energy spend, types of energy used, energy strategy, and outlook.

As a significant (and rising) share of operating costs go on energy, energy mix has become a strategic issue at billion-dollar corporations.

While reducing energy costs through efficiency is often a strategy’s main objective, a number of other goals also exist, like energy security, carbon reduction and price stability.  Regulatory compliance and reputational and brand aspects also play a part.

Self-generation of energy and integration of renewables have been adopted at significant rates to meet these ends, with adoption set to increase over the next five years.  The main barriers to this are related to risk and financial return, suggesting adoption could come even faster with financing innovations and increased cost-competitiveness of renewables.

41% of respondents report generating renewable energy with company-owned or controlled resources. Most generate power with photovoltaic solar (25%), followed by biomass/biogas generation (20%) and the use of biofuels in company-owned fleets (19%). Wind and geothermal have 7% uptake.

Only those corporations with a strong, diverse energy strategy will create a competitive advantage in today’s more resource-efficient, low-carbon economy.

This article was originally published on Ernst & Young