Hitachi Energy Q&A: Circularity, COP30 & Energy Transitions

Hitachi Energy is advancing its sustainability agenda alongside its mission to electrify the world, delivering reliable power to more than three billion people.

The company is strengthening transparency and performance, launching its first comprehensive sustainability strategy and publishing its inaugural sustainability report while elevating its EcoVadis rating from silver to platinum.

As Global Head of Sustainability for Hitachi Energy, Alicia Argüello leads the integration of sustainability into business strategy, operations and culture, positioning it as a driver of competitiveness and growth for Hitachi Energy and its customers.

Since joining in 2019, Alicia has worked across functions and regions to embed measurable goals, enhance supplier and operational practices and accelerate progress on decarbonisation, resource efficiency and social impact.

Alicia shares her sustainability insights with Sustainability Magazine.

How is Hitachi Energy helping with the energy transition?

Our core mission is to inspire the next era of sustainable energy – this means creating an energy system that is more sustainable, secure, resilient and affordable by enabling electrification. 

We do this by providing the technologies and solutions that allow power grids to integrate increasing amounts of renewable energy – wind, solar and hydro power – at scale. 

We are the world’s largest manufacturer of key technologies for electrification, including transformers and high voltage direct current (HVDC) products. 

To give you an idea of our size and reach, our installed base represents more than 2.4 million transformers and one in four high voltage switchgears globally. 

We have integrated 150 GW of energy over the last few years through our HVDC technology; that’s enough to power two-thirds of all European households! 

Our digital portfolio also supports 50% of the top 250 global utilities.

A message we continuously repeat is that there is no transition without transmission. 

What we mean by that is the grid – which transmits and delivers electricity from power plants to our homes, businesses and industries – is central to the energy transition, but has been overlooked for decades.

With renewable energy production growing at an unprecedented rate, we need to connect far more generation in the grid. 

The different power sources and levels of intensity mean the grid needs to be updated and modernised from a traditional, one-way system to become more flexible, digital and dynamic. 

That’s a huge shift.

To give scale to the challenge, much of today’s infrastructure – including more than half of the grid in the European Union – has been in operation for more than 20 years, nearing or past its intended lifecycle, leading to higher outage risks, cyber vulnerabilities and costly emergency repairs. 

Alongside this, the grid has to cope with an enhanced complexity due to intermittent generation of renewables and the increasing electrification of industry, transportation and housing. 

According to the International Energy Agency, by 2040, more than 80 million kilometres of grid infrastructure will need upgrades – requiring estimated investments of US$600bn annually. 

At Hitachi Energy, we are committed to enabling this transformation. 

That’s why we’ve announced US$9bn of global investment across engineering, manufacturing, R&D and strategic partnerships to expand and modernise grid infrastructure.

What else can help accelerate the energy transition? 

In order to accelerate the energy transition, we need to put grids at the centre of discussions on investment and climate finance and highlight that electricity transmission doesn’t only help achieve our energy goals, but also helps drive progress on economic growth, global development and equitable opportunity. 

Once again, there is no transition without transmission!

That is exactly our message here in Brazil at COP30, where we are calling on policymakers, international organisations and commercial decision-makers to prioritise grid modernisation.

To help businesses move more quickly, we need negotiators to focus on accelerating grid investment, improving long-term planning and supporting the development of new, innovative business models that will support a secure, sustainable and affordable energy transition. 

For example, we have signed framework agreements with RWE to provide multiple HVDC systems and other key technologies to help accelerate the energy transition in Europe and with E.ON to deliver transformers across the German energy grid. 

Agreements like these enable us to activate the supply chain early to meet key deadlines.

It’s also critical to mobilise capital for essential infrastructure such as power grids, storage, nuclear energy, flexibility and digitalisation. 

Standardised financial models and clear policies are important to make these assets more attractive to investors.

How is Hitachi Energy improving its sustainability?

Sustainability is in the DNA of our business strategy, shaping the approach we take towards environment, society and our own governance in support of a just energy transition. 

Our sustainability strategy focuses on action plans across three pillars we’ve set – People, Planet and Principles – with a focus to maximise positive impact along our value chain.

Our platinum EcoVadis rating places us in the top 1% of companies assessed globally and is a good external validation showing that we are on the right path in our sustainability journey.

Our SBTi validated targets aim to achieve 80% reduction in Scope 1 and 2 absolute carbon emissions and a 55% reduction in Scope 3 emission intensity over the next five years. 

We have already achieved a 75% reduction in Scope 1 and 2 emissions since 2019 and contributed to 478 million tonnes of avoided emissions in the past three years. 

Our target is for this number to reach 1,000 Mt by 2030.

But our focus goes beyond net zero alone. 

We have further targets across our people and principles pillars, such as our commitment to raise energy and electricity awareness to more than 10 million people and to increase the amount of suppliers we assess on ESG, which now covers around 65% of our spending.

If we talk circularity, our journey started focusing on the materials we use across our operations, but we are now looking at how to expand our business models in a way that helps both our own business and our customers. 

We’ve launched programs to refurbish, retrofit and recycle grid assets, which not only cut emissions but also save money and extend the life of critical infrastructure.

One of my favourite projects is our transformer refurbishment initiative in Europe, for transformers and components. 

Another favourite, for its simplicity and incredible impact, is our retrofitting initiatives in High Voltage equipment, where we exchange gases with high Global Warming Potential for our EconiQ eco-efficient gas mixture, which significantly reduces CO₂ equivalent emissions while providing identical ratings, reliability and life cycle performance.

What is Hitachi Energy doing to solidify a sustainable future?

A big area of focus for us is ensuring the right skills to advance a sustainable energy future. 

The renewables revolution is set to require 14 million new clean energy workers by 2030, a target that Boston Consulting Group warns will fall short by 7 million. 

The energy transition depends on a new generation of talent with technical depth and systems thinking and we are looking at how we can help address this on several fronts.

We invest heavily in early-career programs and apprenticeships that combine hands-on technical training with digital learning, while our partnerships with universities and technical institutions help align education with the needs of a modern, electrified grid.

One such example is our Power+ graduate program, which attracts young graduates to kickstart their careers with us. 

To help close the energy literacy gap amongst young people, we’ve also partnered with the BBC to create an educational series for kids and teenagers to raise energy awareness and to stimulate curiosity and interest in roles the industry will need – reaching more than one billion impressions so far.

And for professionals, we have a range of resources including our Hitachi Energy Grid Academy to help talent gain new skills and stay updated with the latest technology trends.

Ultimately, progress happens when global top-down change meets local, bottom-up innovation, whether that be from start-ups, youth, or grassroots communities.

Collaboration across these levels is essential for cultivating future talent and delivering a successful energy transition that works for the industry, economy but more and foremost, for people.