Renewable energy sources: future trends and benefits
Driving value in the supply chain
Renewable energy sources have many benefits and opportunities to offer across the supply chain.
Benefits of renewable energy sources
Renewable energy resources, also known as “renewables,” are naturally replenishing fuel sources. Renewables are able to replace coal, oil, natural gas, and nuclear power. They are able to replace these sources because it is clean, safe, and a reliable power at low or zero carbon emissions.
All these factors make renewables attractive for the supply chain. This is due to several potential benefits:
- Avoid risks of fossil fuel price fluctuations and regulatory changes
- Attract customers, partners, and employees who are interested in corporate responsibility
- Drive corporate growth by keeping pace with competitors
Besides the fact that renewables have many benefits to offer, they can also help decrease long-term costs, provide price stability, mitigate future regulatory risk, enhance brand value, drive new revenue, and improve employee engagement if one switch to renewables selectively or throughout the supply chain.
Recent developments and outlook
Overcoming traditional barriers has accelerated the pace of adoption and progress of renewables. Renewable energy is now more accessible and affordable than ever. This is due to the fact that the cost of the technology itself has decreased. New financing vehicles have improved access and lowered capital requirements.
The United Nations Conference on Climate Change (COP21), which resulted in 195 countries approving the first universal, legally binding global climate deal on greenhouse gas emissions, underscores the growing influence policy has in shaping renewable energy growth.
As a response to shifting public sentiment, many organizations are reviewing and modifying energy management initiatives, of which renewables are typically a core component. 154 companies have signed the American Business Act on Climate Pledge for aggressive climate action. To add on this, 81 companies have committed to pursuing 100 percent renewable energy through the RE100 initiative.
Driving value in the supply chain
When treated as a strategic asset rather than a tactical expense, renewable energy provides cost and risk benefits across the supply chain.
In addition, renewables have lots to offer. These include secondary, intangible benefits, including enhancing company culture and employee engagement, advancing your sustainability agenda and helping achieve sustainability goals, strengthening corporate reputation, and driving corporate growth by keeping pace with competitors and signaling leading environmental stewardship to customers.
The bottom line
Renewable energy can be used throughout the supply chain in order to decrease long-term costs, mitigate risk, drive new revenue, enhance brand value, and improve employee engagement. As technologies and regulations mature, companies should be re-evaluating their energy procurement strategy to take advantage of these benefits.
Deloitte recommends: With renewable energy more accessible and affordable than ever, evaluate your supply chain now. This can be done by switching to renewables including solar, wind, biomass, geothermal, and hydro power to start realizing the benefits as soon as possible.