Deloitte: Energy Management - Paused by Pandemic, but Poised
NEW YORK, July 8, 2020 /PRNewswire/ --
- Decade of residential consumer and business survey data suggests clean energy efforts and climate action are poised to accelerate despite economic downturn.
- Nearly 6 in 10 businesses surveyed feel increased pressure to disclose climate risks; of those, 9 in 10 have reviewed or changed their disclosure procedures and developed plans to address those risks.
- More than half (51%) of business respondents surveyed said they're working to procure more electricity from renewables.
- Fifty-three percent of residential consumers surveyed said it's extremely or very important that part of their electricity supply comes from renewable energy.
- Sixty-five percent of residential consumers surveyed saw greater renewable energy development boosting the national economy, the highest level since 2014.
Why this matters
Since Deloitte began conducting its annual survey tracking clean energy attitudes and actions a decade ago, the percentage of residential consumers concerned about climate change and personal carbon footprints has risen steadily from about half to a consistent 68%, putting increasing pressure on businesses to do more. The year 2020 appeared to be the tipping point, but when COVID-19 hit, many questioned whether the momentum had been derailed as companies focused on survival.
Deloitte's 2020 Resources Study, "Energy Management: Paused by Pandemic, but Poised to Prevail," found that despite the pandemic — and maybe in part because of it — progress in efforts to manage energy use, reduce carbon emissions and address climate change will likely continue and even potentially accelerate in the longer term. The study is based on survey data collected from 1,531 residential consumers and 602 business decision-makers.
"If there were any sort of 'silver lining' to the disruption created by COVID-19, it may be that it seems to have acted as a clean energy accelerator, which the current recession will likely not deter. Over the last 10 years we've seen a shift in energy attitudes, preferences and pressure gradually trend toward greater climate consciousness, but these past several months of isolation seem to have strengthened and propelled that momentum further."
-Marlene Motyka, principal, U.S and global renewable energy leader, Deloitte Transactions and Business Analytics LLP
Consumer concern about climate change is rising, but looking to others to solve
Consumer sentiment about climate change has steadily increased over the past decade. Sixty-eight percent of residential consumers surveyed said they were "extremely or very concerned" about climate change and their personal carbon footprint and 65% said they saw greater renewable energy development as boosting the national economy, the highest level since 2014. While the benefits of clean energy are clear, most consumers (80%) surveyed expect others, such as the government and corporations, to address climate change issues. And about a third of respondents expect action from their employers.
Millennials are a driving force for corporate sustainability
Further emphasizing the corporate role, more than a third of respondents who identified as full- or part-time employees, students and/or job seekers said it's extremely or very important to work for a company with sustainability and/or climate-risk goals, and this sentiment rose to nearly 50% among millennials. "Employee motivations" has consistently been one of the top three drivers of corporate energy management programs, selected by at least a quarter of business respondents each year. But in 2020, that rose to a third, the highest level ever in our surveys. Employees are becoming more vocal about climate change, and this may be due to the growing influence of millennials in the workplace.
Businesses are feeling increasing stakeholder pressure to address climate risk
In line with rising consumer sentiment, nearly 60% of businesses surveyed feel increased pressure from stakeholders to develop and disclose plans to demonstrate how they're addressing climate risk. The stakeholders seen as most active are employees (49%), followed by board members (42%), customers (41%) and shareholders (37%). Of those businesses feeling increased pressure, nearly 90% have reviewed or changed their climate-risk disclosure procedures and developed plans to address climate-related risks.
Importantly, although businesses are feeling pressure, they also increasingly see procuring clean energy as doing the "right thing." In fact, 75% of those surveyed said recent global climate change reports have caused them to focus more on energy management. And almost 90% of respondents now see energy procurement as "not simply a cost to the company, but an opportunity to reduce risk, improve resilience, and create new value."
Convergence of cost and clean means more green
Over the past 10 years the "cost" versus "clean" motivations for utilizing cleaner energy resources have been steadily converging as renewable energy costs have declined. This greater affordability is allowing businesses and residential consumers to prioritize clean energy without making bottom-line sacrifices.
Businesses are procuring more renewables through more channels:
- Sixty-three percent of businesses surveyed have increased emission reduction goals.
- Three-quarters of business respondents said customers are asking them to procure renewable energy.
- More than half (51%) of businesses said they're working to procure more electricity from renewables.
- Of the 60% of businesses citing having onsite generation, the highest share of electricity supply was generated with cogeneration (15%) and renewables (13%).
- Microgrids also appear to be growing in popularity with 44% of business respondents saying they've considered a microgrid, a spike of 9 points over 2019.
Residential consumers still cost conscious but putting environment first:
- For the first time in five years, "utilizing clean energy sources to be better stewards of the environment" was cited ahead of "keeping my total energy bills affordable" as one of the top three most important energy issues to residential consumers.
- More than half (53%) of respondents said it's "extremely" or "very" important that part of their electricity supply comes from renewable energy.
- Thirty-two percent of respondents said they were "very" or "extremely" interested in installing solar panels and 51% of those who don't already have them on their primary residence, expressed interest if combined with battery storage.
- Among respondents who had already installed rooftop solar, "clean" beat out saving money for the first time as the primary motivator.
- Renewables are gaining ground as a reason for respondents to switch providers versus lower electricity costs as renewables rose 3 points in 2020 to take second place from "better service," while "lower electricity costs" stayed steady in first place.
"The preference for cleaner energy sources will likely continue, and given their increasing affordability, usage may continue to grow even during a recession. Sustained strong consumer sentiment and increasing pressure on businesses, coupled with accelerating capital markets' reward for ESG-minded companies, are positively reinforcing the energy management value proposition for many businesses long term."
-Jim Thomson, vice chairman, U.S. power, utilities and renewables leader, Deloitte Consulting LLP
Hurdles to clear for more meaningful progress
Power reliability and protection of data have consistently been the top issues cited by businesses and consumers in adopting or expanding technology that provides more flexibility in managing and controlling electricity use and sources. Fifty-two percent of businesses and 37% of consumers surveyed are concerned about an interruption to their electricity supply due to a cybersecurity event. And 76% of residential respondents cited growing concern about privacy and security as homes become more automated, a 15-point jump from 2019, with 46% saying it would prevent them from buying smart home technologies in the next one to two years. These hurdles threaten to slow progress in energy management if not addressed by energy and technology providers.
Deloitte also released today its 2020 Midyear "Power & Utilities" and "Renewable Energy" outlooks that take a look at the latest challenges facing these industries as they respond, recover and thrive in the current downturn. Connect with us on Twitter at @Deloitte4Energy @MarleneMMotyka or on LinkedIn at Jim Thomson and Marlene Motyka.
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