Electric Utilities are Hindering Transition to Renewable Energy?

A study investigated how electric utilities are faring in their efforts to decarbonise and transition to renewable energy (RE). It examined 3,000 electric utilities worldwide between 2001 and 2018 and found that most did not grow or expand their renewable energy portfolios or actively grow their fossil fuel portfolios.

The study grouped these power companies into clusters based on the average growth of their three fuel types – renewable energy representing wind and solar, gas, and coal-based fuel.

The first and largest cluster—comprising 75% of the utilities and representing nearly 50% of their capacity—comprises passive companies that did not grow their renewable energy and fossil fuel portfolios. Seventy per cent of these companies are government-owned and include regional and municipal utilities.

The second cluster, composed of 77% wind, 14% solar, and biomass capacity, prioritises the growth of renewable energy (re). However, this group represents only 10% of all utilities reviewed in the study. Although these power companies prioritise RE growth, the vast majority are still beginning their transition to RE and continue to grow their gas or coal portfolio. The study says that, generally, the transition to RE runs parallel with the expansion in gas capacity.

The third cluster, which accounts for 10% of the total utilities, favoured the growth of gas capacity over coal or RE. 29% of the group represents US power companies, followed by Russia and Germany.

Overall, the study finds that power utilities lag behind and even hinder the global transition to renewable energy.  

The study says larger companies with higher market shares tend to prioritise renewable energy; however, they do not necessarily replace fossil fuels with renewable energy but add low-carbon assets to their growing businesses.

To read the complete study, click on the link below: