Businessman and philanthropist Michael Bloomberg has unveiled fresh plans to utilise his firm Bloomberg LP and its charitable arm, Bloomberg Philanthropies, to help the utility sector to reduce its reliance on fossil fuels.
Speaking at a Bloomberg NEF summit in New York on Monday evening (25 March), Bloomberg revealed that he has been working with stakeholders across the global utility industry to develop a new tool which will enable firms in the sector to measure the impact of their low-carbon ambitions and actions.
Called the ‘Decarbonisation Tracker’, the tool will provide clear metrics that water, gas, electricity and oil firms can use to quantify the environmental and financial benefits they will reap from a shift away from fossil fuels. This information can then be used to guide utility companies seeking to bolster their low-carbon ambitions on which moves could prove the most impactful, or to help investors looking to remove high-carbon assets from their portfolios.
“Utilities have a critical role to play in reducing the emissions that drive climate change and stopping the destructive effects it is already causing,” Bloomberg told delegates at the New York summit.
“We’ve long known that replacing coal with clean energy is good for our health, but increasingly, it’s good for our pocketbooks, too. The trouble is that we don’t have access to data that would reveal how utilities are doing in reducing greenhouse gas emissions.
“With a deeper understanding of the financial implications of the reliance on unsustainable energy sources like coal, utilities will be able to better align their business plans and investment strategies with long-term climate goals.”
The ‘Decarbonisation Tracker’ is due to launch at the UN Secretary-General’s Climate Summit in September, following further consultations with industry stakeholders. Early supporters of the tool include the likes of French electricity provider ENGIE and US-based natural gas utility Xcel Energy.
A slow low-carbon transition?
The announcement from Bloomberg comes at a time when the oil and gas sector is facing criticism for failing to invest in-low-carbon projects in the face of looming climate targets.
A recent study by CDP, for example, found that global oil and gas firms collectively invested just 1.3% of their combined capital expenditure (CAPEX) into low-carbon technologies and projects between January and November 2018. This is despite the fact that the industry is estimated to account for more than half of the global greenhouse gas emissions associated with energy consumption, with some research suggesting that the sector is responsible for as much as 71% of global CO2 emissions.
The good news is that the transition away from carbon-heavy technologies, services and products is now underway in Europe, with the likes of Shell, BP and Orsted having expanded their low-carbon service portfolios and bolstered their investments in alternative energies in recent times.
As for electricity and water utilities, similar leadership is being shown by several companies across these sub-sectors. The likes of Bulb and Ecotricity were recently able to lower the price of their renewable offerings for customers, while a number of UK water firms announced big investments into electric transport, closed-loop technology solutions and AI-enabled efficiency technologies last year.
Such firms are also upping their investments into renewables, while exploring the possibility of implementing energy storage to counter the variable outputs of solar, wind and tidal generation. Indeed, one-third of UK utility companies are now believed to have installed a battery storage array of some kind.
Nonetheless, green campaign groups have continually been quick to argue that the low-carbon transition has not been widely led by utilities – and oil and gas firms in particular – at the speed necessary to meet legally-binding climate targets.