Electric Utilities are Hindering Transition to Renewable Energy, Study Says

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A study investigated how electric utilities are faring in their efforts at decarbonisation and transitioning to renewable energy (RE). It looked into 3,000 electric utilities around the world between 2001-2018 and found out that a majority of them did not grow or expand their renewable energy portfolio but did not actively grow their fossil fuel portfolios either.

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

The first and largest cluster – 75% of the utilities and representing nearly 50% of their capacity is called passive companies which did not grow their renewable energy and their fossil fuel portfolios. 70% of these companies are government-owned including regional and municipal utilities.

The second cluster prioritises the growth of RE composed of 77% wind, 14% solar, and biomass capacity. The group represents only 10% of all utilities reviewed in the study. Although these power companies prioritise RE growth, the vast majority are still at the beginning of their transition to RE and continues to grow their gas or coal portfolio. Generally, the transition to RE runs parallel with expansion in gas capacity, the study says.

The third cluster accounting 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 are lagging and even hindering the global transition to renewable energy.  

Larger companies with higher market shares are those who tend to prioritise renewable energy; however, they do not necessarily replace fossil-fuels with renewable energy but add low-carbon assets to their growing business, the study says.

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

Source Citation:

Alova, G. (2020). A global analysis of the progress and failure of electric utilities to adapt to their portfolios of power-generation assets to the energy transition. Nature Energy. Retrieved from https://www.nature.com/articles/s41560-020-00686-5.epdf

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