Climate change mitigation the main driver of the energy transition – study

A survey conducted by Capgemini has found that the need to mitigate climate change is the main driver of the energy transition, as well as the emergence and adoption of new business cases.

Of the 530 senior executives surveyed by Capgemini, almost 70% say climate change is pushing energy companies into embracing new business models that are climate-friendly.

However, the majority of energy and utility firms are lacking the capabilities required to develop new models, the study has revealed.

The study, How energy transition is driving new models in energy and utilities, also found that companies that implement new use cases are recording various benefits.

The benefits include meeting national and internal sustainability and greenhouse gas emissions reductions targets, improved grid efficiency and reliability, and enhanced customer services.

Utilities that have adopted new models have recorded a 4.6% decrease in scope 3 emissions and an additional 13% reduction is anticipated in the next three years. Such companies have also recorded a 6% increase in revenue and a 4% increase in upselling opportunities, according to Capgemini.

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With the energy sector contributing over 73% of all emissions, energy sustainability and decarbonisation have become a primary requisition, states the study.

Demand from investors is also pushing firms to adopt new models with 63% of the executives citing investor demand as the impetus for change.

Other key study findings include:

• The sector remains in a state of transition, for instance, while 64% of firms plan to implement energy-storage solutions in the future, just 19% are already doing so.

• Most energy companies have yet to create a new-energy business strategy. Just 18% of those surveyed say they have a global strategy with well-defined goals and target timelines.   

Peter King, Global Energy and Utilities Lead at Capgemini Invent, said: “Energy transition is the driving force of the decade. Firms must begin by crafting organisation-wide strategies at scale to ensure the success of an energy transition program. There is also a blatant need for more pace and innovation.

“Just a third of organisations are operating an innovation function at scale to develop and test new models and industrialize results. It is time for players to adopt a fail-fast philosophy and forge new partnerships, both within and outside existing ecosystems.”

Capgemini urges energy firms to increase focus innovation and strategies development and invest more technology and data skillsets development.

The survey was conducted in August and September 2021.

Find out more about the report.