Renewable Energy Solutions Learn how to correctly analyse this topic.

Sarah Simon

18 min Read Time | November 30th 2022

Key takeaways

1

This topic addresses how companies are making efforts to transition to renewable energy.

2

It is in the form of products and/or services that allow individuals and other businesses to benefit from renewable energy. The solutions can be in the shape of producing, storing, and distributing renewable energy, which should be measured by assessing installed capacity (and converting that to energy produced based on the energy type) and how widely used the product/service is.

3

Investments can be mentioned as a secondary point to the analysis if the direct positive impact can be measured.

The analysis should not discuss renewable energy generation for the company's own consumption.

Executive Summary

Today, many companies are working to provide renewable energy or developing technologies for easier, affordable, and widespread access to renewable energy.

This topic addresses how companies are making efforts to transition to renewable energy and facilitating this transition for others. It assesses the impact of the products and services that allow individuals and other businesses to use, produce, store and distribute renewable energy.

The analysis should not include the renewable energy produced by the company for its own consumption. 

It should only treat the energy produced that is supplied to others (households or businesses) for consumption.

What is it?

Fossil fuels are responsible for driving one of the most significant technological developments in human history - The Industrial Revolution. Since the shift to mechanization in the early 19th century, fossil fuels, namely, coal, petroleum (also referred to as crude oil or oil), and natural gas, have been the primary source of energy that powers the world.

Today, around 84% of the world's energy is derived from these fossil fuels, which have been formed over millions of years and will not be restored on the human timescale. Hence, these are not renewable and will be exhausted in almost a century.

The main concern with fossil fuels is the greenhouse gases, especially carbon dioxide, emitted. These gases trap the Sun's heat and have raised the earth's average temperature by over 1°C since the 1800s. We have just begun to witness the catastrophic consequences of global warming accompanied by climate change, including sea-level rise, drought, and saltwater intrusion that have forced people to relocate.

Hence, there is an urgent need for "renewable" sources of energy, i.e., sources that are naturally restored on a human timescale. More importantly, most of these are also clean sources of energy that do not emit planet-warming greenhouse gases and thus help mitigate climate change. They are integral in meeting the Paris Agreement's objectives, which intend to limit the average global temperature rise below 1.5°C or at the most 2°C from pre-industrial levels.

The renewable sources of energy are:

  • Sun or solar power is obtained from radiation emitted by the Sun
  • Wind energy is obtained from the kinetic energy of air in motion
  • Water - utilizing the kinetic energy of water in motion
    • Hydropower is from the flow of naturally moving water, usually from rivers
    • Marine energy from tides, waves, and ocean currents
  • Geothermal energy from the heat below the earth's surface
  • Bioenergy obtained from biomass and biofuels*
    • Wood and wood waste
    • Biodiesel
    • Municipal solid waste
    • Biogas and landfill gas (methane)
    • Ethanol
  • Hydrogen Fuel cells that convert the chemical energy of hydrogen (combined with oxygen) into electricity
  • Nuclear energy is stored in the nucleus, or core, of an atom

*These renewable energies are highly disputed due to their negative environmental impacts. Therefore, they should only be mentioned as a secondary point.

Caution: Although burning wood biomass for energy is considered carbon-neutral, its use as a clean energy source is hotly debated. It is justified that the CO2 released on burning will be sequestered as new trees grow. But burning wood releases CO2 instantly, and the time lag between sequestration and emission is usually high, elevating the risk of not meeting the Paris Agreement Targets.

Nuclear Energy is another energy form that produces zero-emission. But its classification as a renewable source of energy is disputed. The fuel mainly used (uranium-235) is often considered 'non-renewable,’ and the radioactive waste generated is a long-term threat to the environment. Hence, the qualification of nuclear energy is a renewable energy, but its risks should be highlighted in the analysis.

Disputed renewable energies should be discussed as a secondary point in your analysis while remaining critical.


Sources

https://ourworldindata.org/energy-mix
https://ourworldindata.org/grapher/years-of-fossil-fuel-reserves-left
https://www.nationalgeographic.org/encyclopedia/distribution-fossil-fuels/
https://earthobservatory.nasa.gov/world-of-change/global-temperatures
https://www.un.org/en/climatechange/what-is-climate-change
https://en.wikipedia.org/wiki/Renewable_energy
https://www.eia.gov/energyexplained/renewable-sources/
https://www.energy.gov/clean-energy
https://www.downtoearth.org.in/blog/climate-change/europe-s-biomass-problem-68695
https://unfccc.int/blog/a-brief-guide-to-renewables
https://en.wikipedia.org/wiki/Nuclear_power_proposed_as_renewable_energy
E SDG PRINT 13

SDG Choice

SDG: 13

Impact Category: Products

General Impact assessment

Always describe the what, how much, and the who in your analysis, following the IMP framework. Keep in mind the Logic Model and focus on the outputs, outcomes, and impact, tangible effects, as opposed to intentions, inputs, or activities.

Learn more about these in this article - Step 1: Understand Impact.

Be critical when discussing Nuclear Energy, Biomass, and other disputed renewable energies. Do not focus on these as the only renewable solutions. They can be secondary information in the note.


Introduction

The introduction should describe the broader impact issue to set the stage for the reader.

It should aim to answer the following questions:

  • The impacts of non-renewable energy
  • Why we need renewable energy solutions
  • What the product or service is that will be discussed in the core
  • General background information on the use and benefits of the particular product or service


Core Analysis

The analysis should discuss the following points:

  • A description of the solution provided

  • How much clean energy is being produced or total installed renewable energy capacity (and then converting this to energy generated based on energy type)

  • How many units of the product/solution were installed

  • Where they were installed

  • How much the solution represents from the company's total portfolio; What percentage (and type) of renewable energy

  • Benchmark the company's capacity using the total energy generation globally or in a particular country

  • How much GHG emissions were avoided

  • How many people benefit from the renewable energy supplied

Not to include:
  • The company's renewable energy use or production for its consumption
  • Avoid greenwashing and go beyond the company's CSR report, sites, etc.


How to attribute the impact on a company


Option 1

Companies usually provide the data regarding their installed capacity of renewable energy and how many people potentially benefit from it. The installed capacity is in the units of Power, i.e., GW or MW.

If the company does not disclose the number of beneficiaries, external sources or studies can sometimes be used to estimate this number.

For instance, Installed energy capacity for renewables (IRENA):

  • concentrating solar power: 42%
  • solar photovoltaic: 16%
  • geothermal: 83%
  • hydropower: 46%
  • offshore wind: 40%
  • onshore wind: 36%

As a secondary point:

  • bioenergy: 70%

Installed energy capacity for nuclear (World Nuclear Association)

  • nuclear: 82.5%

Capacity factor (or efficiency) of proton exchange membrane electrolyzers (that convert water into hydrogen):

  • PEM (Hydrogen): 70% - Taking the most recent findings and considering that there are theoretical efficiencies versus actual efficiencies, if we take the average of the three in bold, we get an efficiency of 70%.
    • 60-70% - typical operating efficiencies of commercial electrolyzer units (source, 2021)
    • 65-75% - conversion efficiency of both Alkaline electrolysis, which is a mature technology for large systems, and PEM (Proton Exchange Membrane) electrolyzers, which are more flexible and can be used for small decentralized solutions (source, 2022)
    • 70-80% - effective electrical efficiency considering the industrial production of hydrogen and using current best processes for water electrolysis (PEM or alkaline electrolysis) (source, 2022)


Below you can find how to convert MW to MWh:

X MW × Capacity Factor × 365 days × 24 hours = X MWh

Source: http://www.aweo.org/windunits...

Also, we would want to use the per capita electricity consumption. This would be more accurate: https://www.statista.com/statistics/867590/china-per-capita-electricity-consumption/.


Helpful information on conversions:

O&G companies will produce either petroleum products and/or gas. You can convert the total natural gas and petroleum production directly to MWh using online converters.

Option 2

Another way is to convert the capacity into the estimated annual energy it provides (units of energy MWh or GWh) using external sources.

Further, the number of beneficiaries can be estimated using the per capita energy consumption for a particular country or calculators like the EPA Greenhouse Gas Equivalencies Calculator.

Similarly, the amount of CO2e emissions avoided can sometimes be estimated using external studies.


Practical Example:

If a geothermal energy power plant has an installed capacity of 3,000 MW, we can use the following calculation to estimate the amount of energy it produces in a year.

Geothermal Power generation has a capacity factor of at least 90%. The capacity factor indicates how often the plant actually operates during a certain period of time.

3,000 MW × 0.9 × 365 days × 24 hours = 23.6 million MWh

23.6 million MWh of energy is sufficient for the energy needs of around 2 million US homes.

Suppose a company does not create, for instance, a renewable energy farm on its own from beginning to end. In that case, it is more interesting to know how widely used renewable energy product is.

For example:

  • Siemens producing wind turbines: is the product widely used? For instance, the scale can be shown by stating that it is used in 80% of wind farms or is the top-selling wind turbine in the world.
  • If you cannot find a specific project where the farm only uses the company's product, then the analysis can discuss the installed capacity of X amount of MW or MWh.


When discussing investments, if it can be demonstrated that there was a positive impact, such as realising a project with X amount of installed energy, then it can be mentioned as a secondary point to the analysis.

Suppose the positive impact generated from the investment is vague, such as green bonds, where a company spent X million USD on renewable energy. In that case, it is better not to discuss it because it is about future impact.


Make sure to describe the scale of the impact by taking into account:

1/ The breadth of the impact

  • Is the impact local, national, or global?

  • How many people are concerned? Thousands? Hundreds of thousands?

2/ The depth of the impact

  • Is the life of people concerned deeply affected, or does the issue just marginally impact them?

  • Are the changes brought by the issue profoundly changing society or the planet?

3/ The persistence of the impact

  • How long would the impact described last for? Months? Years? Decades?

  • How reversible is the impact described in the impact analysis? Can it be easily stopped/extended?


Industry-Specific Impact Assessment

Oil & Gas Industries

Many oil and gas companies are looking to add renewable energy to their portfolios. They do so by building or investing in renewable energy projects like solar and wind farms, geothermal and hydroelectric facilities, etc.

Sometimes, they provide support to renewable energy projects in the form of technical expertise or other operations.

They can facilitate access to renewable electricity by installing charging units or providing access to clean energy and electricity in off-grid areas.

They are also involved in the development of biofuels and hydrogen fuels.

Assessing the products and services by a company that allows individuals and other businesses to use, produce, store and distribute renewable energy.

When discussing the efforts to transition to renewable energies for the oil & gas industries, the analysis must include:

  • % of capital expenditure spending on renewable production/supply
  • Total absolute $ or € spent on renewable energy generation
  • Total renewable energy generated (not just installed capacity) in MWh
  • Total installed capacity (MW)
  • How much the renewable energy generation accounts out of the total total portfolio (%)

Relative Threshold: renewable energy must make up at least 20% of the company's portfolio

- OR -

Absolute Threshold: the amount of renewable energy generated is equal to or above 10,000,000 MWh

Electric Utilities & Power Generators

This topic addresses how companies in the Electric Utilities and Power Generators industry are driving the renewable energy transition. Electric utility companies are in charge of the distribution and commercialisation of energy, while power generators are producing energy. Remember to take into account these differences when disclosing the company's impact.

This topic might be more relevant for generators, but exceptions can be made for distributors (and generators) who incentivise individuals/companies to adopt redistribution of excess renewable energy generated by going back into the grid, amongst other creative solutions to increase renewable energy generation capacity or to increase the mix of renewable energy in the grid, such as financial incentives, infrastructure, facilitation, etc.

To discuss:

  • Total energy, produced or supplied (MWh)
  • Total renewable energy capacity (MW), and how much this accounts for out of the total portfolio (%)
  • Amount of GHG emissions avoided


Not to discuss:

  • Renewable energy generation for the company's own consumption
  • Purchased energy (because we are trying to find out whether the company is making efforts in producing renewables, diversifying its portfolio, and incentivising the production or use of renewable energies).

Relative Threshold: renewable energy must make up at least 20% of the company's portfolio

- OR -

Absolute Threshold: the amount of renewable energy generated is equal to or above 10,000,000 MWh

Fuel Cells & Industrial Batteries

This topic addresses how companies in the Fuel Cells & Industrial Batteries industry are driving the renewable energy transition. Fuel cells can use renewable and clean energy sources like hydrogen to produce electricity directly. Energy storage systems are crucial for using renewable energy efficiently, which is intermittent in nature. They store the excess energy for future use.

To discuss:

  • Total energy, produced or supplied (MWh) or the amount of renewable fuel (hydrogen) generated and how much energy it can produce
  • Total renewable energy storage capacity (MW)
  • How many people or businesses benefit from the renewable energy (or storage solutions) supplied
  • Amount of GHG emissions avoided

Not to discuss:

  • Renewable energy generation for the company's own consumption

    There is no threshold for this topic.

    Wind & Solar Energy

    This topic addresses how companies in the Solar Technology & Project Developers industry are driving the renewable energy transition. Solar energy is one of the most widely used renewable energy. Solar panels/modules are required to absorb sunlight, which is eventually converted into electricity. Solar farms are developed for a large-scale supply of electricity generated from solar panels. Other valuable products include but are not limited to solar energy storage systems, solar glass, etc.

    This topic addresses how companies in the Wind Technology & Project Developers industry are driving the renewable energy transition. Wind turbines are required to capture the kinetic energy of wind, which is eventually converted into electricity. Wind farms are developed for a large-scale supply of electricity generated from wind turbines.

    To Discuss:

      • The total energy that can be produced from the installed wind or solar capacity (MWh)
      • The total installed wind or solar energy capacity (MW)
      • Benchmark the company’s capacity using the total installed capacity globally or in a particular country
      • How many people benefit from the renewable energy supplied
      • Amount of GHG emissions avoided

          There is no threshold for this topic.

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          Learn how to assess the analysis you are writing or reading.

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