Judging from the hype, the world’s energy sector has embarked on a transitional journey to a clean, green, low-carbon future powered by windmills and solar panels.
It’s going to be a long trip. According to the International Energy Agency, we still derive an incredible 80% of our primary energy from fossil fuels—with oil contributing 32%, coal 27% and natural gas 23%.
The transition can only occur as rapidly as the world’s utility companies can invest the trillions of dollars needed to cover the world’s hills and pastures with enough photovoltaic panels, wind turbines and nuclear reactors to replace dirty electrons with clean ones.
Electric industry analyst Hugh Wynne of research shop SSR says that investors have to operate under the assumption that world governments will only move more aggressively to turn the screws on the biggest polluters. Carbon dioxide will be regulated in one way or another, via a carbon tax, cap-and-trade, emissions allowances, something, he says. Those companies with stubbornly high emissions are going to have to pay to pollute — while those with low emissions will enjoy a cost (and profitability) advantage.
Digging in, Wynne (formerly of Bernstein Research) has run the numbers on the carbon intensity of the world’s biggest utilities, including most of the Forbes Global 2000 utility company components. He found that the “dirtiest” utilities are those with coal-fired fleets in China, Russia and India. According to his calculations, China Resources Power and Huaneng Electric both emit .97 tons of carbon dioxide per megawatt hour generated (roughly enough electricity to provide 1,000 homes with power for an hour). Also in the carbon doghouse are Datang at .94 tons/mwh, Inter RAO at .93 and Zhejiang Zheneng at .90.
On the other side of the scale, we find utilities heavy into nuclear power: with Exelon at .05 t/mwh and Electricite de France at .08. Spanish renewables giant Iberdrola and progressive southeastern U.S utility NextEra (parent company of Florida Power & Light) are tied at .21.
The global average electric generation footprint is .52 t/mwh, says Wynne. There are notable companies on the wrong side of this average but with room for rapid improvement in their renewables mix. Saudi Electric (.65 t/mwh) is unique in that it generates more than half of its power by burning oil — the effect of which the Kingdom hopes to rapidly balance by investing in solar fields. In the U.S., Houston-based NRG Energy, averages .68 t/mwh, as its legacy coal-fired plants are significantly more polluting than its regional peers.
If he’s right it could lead over the next decade to dramatic shifts in the ranks of the Forbes Global 2000, as companies that have already moved toward lower emissions benefit at the expense of the polluters.
Meanwhile, some of the more progressively minded utility companies are keen to take advantage of new tools evolving out of advances in machine learning and artificial intelligence. Forbes Global 2000 companies Southern Company, Exelon, and Dominion Energy for example, are all customers of a startup called Urbint, which was founded by Forbes 30 Under 30 alum Corey Capasso and has raised more than $40 million in funding for its A.I.-driven infrastructure safety platform. “Damages to critical infrastructure are on the rise, and can cause harmful methane emissions and pose a major public safety threat,” says Capasso. “Preventing them is vital to not only the fight against climate change, but also to protect workers and the public.”
Urbint’s system hoovers up records and blueprints of pipes, lines, conduits and builds a model of the real world. It’s a “most transformative” tool, says Emeka Igwilo, chief data officer at Southern Company Gas, itself a division of Atlanta-based Southern Company (.49 t/mwh, by the way), who explains that the riskiest part of any utility company’s business is when people start digging on their properties without first calling their utility company. Every year Southern Company generates 2.2 million “tickets” where a customer intends to excavate and the company is legally obligated to send someone out to take surveys and mark the paths of buried lines and conduits. Despite the best intentions, humans get tired, rushed, don’t double check the documents, and in Southern’s territories they end up with about 5,000 damage cases every year.
Urbint overlays its digital models with historic damage reports, the better to learn where accidents have happened before and might be likely again. The system itemizes for each location the particular excavation risks, even suggesting whether to add more manpower to a job. “The tool expands past what the human brain does in connecting the dots to seemingly unconnected events,” says Igwilo. “Now I don’t have people driving around looking for problems, I can direct them to where they need to go.” Southern rolled out Urbint to its Nicor division in 2019 and to the entire company last year. They are already seeing continuous improvement in reducing incidents.
Preventing leaks and accidents all helps reduce a company’s carbon footprint. But neither greentech nor A.I. will be enough to save us. “No matter what you do, somebody has to turn a wrench,” says Igwilo. “This is just an augmentation to the physical work. The tool predicts, but somebody has to intervene.” We still need muscle, for now.