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Industrial Users Driving Clean Energy Use but Weaker CO2 Regs May Change the Outlook

American utilities will continue to go green despite the current political uncertainties. It’s a trend a driven by the demands of corporate customers and the regulators who are implementing stricter environmental rules. But despite that movement, CapGemini says that coal could once again become this country’s leading fuel to generate electricity in 2019 — and last to 2032. CapGemini’s World Energy Market Observatory Report says that such a scenario is possible if the Clean Power Plan is not ultimately approved. That proposed regulation would require a 32% cut in CO2 emissions by 2030 from a 2005 baseline.

Right now coal is used to generate 30% of this country’s electricity. Natural gas is 34%. Renewables, including hydro, are about 15% while nuclear energy is 20%, all according to the US Energy Information Administration.

The upheaval aside, corporate customers from Marriott to Target to Kellogg are going green. And many of them are entering into power purchase agreements with utilities and other power producers that sell green energy. The result has led to 22 gigawatts of added renewable energy in 2016, along with an increase in spending on energy efficiency: from $2.2 billion in 2007 to $6.3 billion in 2015.

“The high-tech companies “have committed to consuming energy in an environmentally responsible way and, specifically, to reducing the carbon footprint associated with their operations,” says the likes of Google, Apple and Microsoft in a legal filing.

Given that the grid will need to handle more variability, it must become smarter. That will necessitate evermore investment in the grid to avoid congestion and any subsequent brownouts. The grid will become increasingly digitized while it relies on analytics to operate it. As a result, it will be more efficient, leading to fewer emissions that include C02.

“The US energy market has shown a growth in renewable energy projects and an increase in new technology investments — which shows a focus on building a successful future, despite uncertainties in today’s climate,” Bart Thielbar, Vice President of CapGemni’s North American Utilities Practice said.

In the last 12 months, the cost of renewable energies have continued to fall – everything from onshore and offshore wind turbines to solar panels and battery storage, which have declined by 20% during this time.

At the same time, industrial customers are expecting better services and things that include more transparency as well as more offerings like green energy.

To that end, the industrial sector uses more delivered energy than any other end-use sector, consuming 54% of that electricity, says the Energy Information Administration. That energy use is expected to increase 1.2% a year.

The most intensive electricity users are food, pulp and paper and basic chemicals. Also, refining, iron and steel are huge consumers. The biggest users among non-manufacturers are in agriculture, forestry, mining and construction.

For their part, their industry representatives — the National Association of Manufacturers and the US Chamber of Commerce — have said that they do not want the Trump administration to gut the Clean Power Plan. Instead, they prefer that the proposed regulation get an overhaul —  to find to an “acceptable replacement” for it.

The battle among the high-tech companies and the old-line industrials will add to the political uncertainty. But despite that tug-of-war, the utilities and power producers feeding their operations will continue to make investments in green energy and energy efficiency.

Photo credit: Flickr Creative Commons, Jan Vossen

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