Supporting a Large Energy Provider in Achieving Carbon Neutrality by 2030
Challenge
The client, an energy provider company that works in Transmission & Distribution (T&D) of electricity and distributes natural gas, has made one of the most ambitious goals to achieve carbon neutrality in its operations by 2030. Therefore, this client wants to align its future targets with the Science-Based Target Initiative (SBTi). Antea Group is supporting the client in the feasibility assessment of establishing a Science-Based Target and pursuing SBTi validation. The scope of work includes the following four tasks:
Review of scope 1 & 2 Greenhouse Gas (GHG) inventory;
Evaluation of emission reduction targets with special consideration of an SBTi.
Solution
As of the present day, Antea Group has finished review of the client’s scope 1 and 2 GHG inventory and execution of Scope 3 screening. Antea Group Subject Matter Experts (SMEs) worked on developing the scope 3 screening report.
The first step was to identify scope 3 activities within the client’s value chain that were relevant to their operations. Antea Group and the client worked together to collect, categorize, and consolidate various source data related to the relevant scope 3 categories, followed by quantification of scope 3 emissions using the World Resource’s Institute (WRI) scope 3 evaluator tool. Completing the scope 3 screening required a lot of collaboration with the client’s core team via a series of focused conference calls/interviews.
Antea Group is presently working on developing a low carbon transition plan (LCTP) that would help the client set a target for the future in alignment with SBTi. As part of LCTP, Antea Group has finished peer benchmarking and policy research work and plan to wrap up LCTP by the end of August. This work will be followed by setting emission reduction targets for scopes 1 & 2, and scope 3, and assessing the applicability of SBTi validation for this utility company.
Result
The results of scope 3 screening indicate that the client's scope 3 emissions account for approximately 98% of their total emissions (scope 1, 2, and 3) for the calendar year 2021. This emission distribution is not consistent with other sectors, where scope 3 typically accounts for approximately 75% of total emissions. The client’s emissions associated with the use of sold products are larger than other utilities because the utilities or “generators” account for these emissions in their scope 1 inventory.
Antea Group found that the client’s emissions are intrinsically tied to other companies like energy generators, regulators, and customers. It is intrinsically challenging to reduce emissions without strategic collaboration with these groups. Antea Group found three levers that the client has at its discretion to use in order to make reductions in scope 3 listed below:
Reductions can occur in embodied emissions from the expenditure. (9.6% of scope 3 emissions)
Upstream emissions from fuel sourcing. (15.3% of scope 3 emissions)
Use-phase emissions from energy consumption. (74.5% of scope 3 emissions)
Antea Group provided recommendations to reduce emissions from the above-mentioned three levers. It was also recommended that the client should analyze the effects of future grid demand, customer energy efficiencies, and renewable use phase emissions to forecast future grid greening possibilities. Antea Group is working on various scenarios with the client to forecast future grid greening with the available data (as part of LCTP task).
