Executives and investors are increasingly focusing on energy transitions for their organizations, while actively planning for new technologies or methods to make those changes, and they don’t see a conflict between sustainability goals and long-term business success, a new report found.
A significant majority of respondents to the Womble Bond Dickinson 2022 Energy Transition Outlook Survey Report say their organizations are prepared or moderately prepared to reduce carbon emissions by more than 50% by 2030. There were 77% that say their businesses are already focusing on or considering carbon neutrality measures.
While addressing these goals, the types of clean energy organizations use or are considering varies. Half of respondents say they are actively operating, investing in or researching the use of solar energy. Geothermal, hydro and wind power followed as the main sources of renewable energy.
Outside of those more common means of energy transition sources, though, the survey respondents are also looking at biofuels and hydrogen and eight in 10 say they are considering these as future energy sources.
Almost 40% of the executives say hydrogen was a technology in which research and development was most important. Hydrogen was also seen as a growth potential, with 67% of the executives indicating its potential.
The Office of Energy Efficiency and Renewable Energy says hydrogen can reduce emissions by more than 50% in heat and power systems, and possibly up to 80% if biogas or hydrogen from low-carbon sources is used in a fuel cell. Hydrogen sources, including green hydrogen production, are become more common in improving sustainability across industries.
“The fact that the data did not identify any clear areas of early concentration in newer technologies suggests that the industry is hedging its bets across many fronts,” says Belton Zeigler, Womble Bond Dickinson partner and ENR sector co-lead. “At the same time, it is surprising to see the amount of activity in hydrogen – which is relatively new to the party – and geothermal, which has been something of sleeper to date.”
Battery storage was also a significant growth opportunity according to the executives. On the other hand, carbon capture was not a significant priority of the respondents, with only one of five who say that reducing carbon and methane emissions by at least half by 2030 were looking into the technology.
The survey also looked at how executives view policy in energy transitions.
More than 70% of respondents view the Biden Administration’s climate policies as favorable to their businesses. Despite that, almost half feel the administration’s plans to decarbonize the power sector by 2035 will not be met. Nearly half of the respondents also say regulatory complexities were among the biggest challenges in making energy transitions for their organizations.
As for environmental, social and governance issues, most say their organizations remain in the early stages of implementing policies. Still, more than three quarters say ESG goals are at least a moderate consideration in their energy transitions and 85% say their ESG efforts will increase over the next two years.
The report surveyed 170 executives, investors, in-house legal counsel and operations managers. Respondents represented energy industry sub-sectors including oil and gas, power and renewables and mining and minerals.