Using renewable energy to drive supply chain innovation

Worth the investment

Renewable energy resources, or “renewables,” are naturally replenishing fuel sources that can replace coal, oil, natural gas, and nuclear power with clean, safe, reliable power at low or zero carbon emissions. Unlike nuclear power and fossil fuels (coal, oil, and natural gas), renewables provide clean, safe, and reliable power, with low or zero carbon emissions.

Several potential benefits make renewables an attractive option for the supply chain:

• Avoid risks of fossil fuel price fluctuations and regulatory changes
• Attract customers, partners, and employees interested in corporate responsibility
• Drive corporate growth by keeping pace with competitors

Switching to renewables selectively or throughout the supply chain can help decrease long-term costs, provide price stability, mitigate future regulatory risk, enhance brand value, drive new revenue, and improve employee engagement.

Deloitte recommends: With renewable energy more accessible and affordable than ever, evaluate your supply chain now for ways to switch to renewables such as solar, wind, biomass, geothermal, and hydro power to start realizing the benefits as soon as possible.

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Recent developments and outlook

The share of US electricity supplied by renewables increased from eight percent in 2007 to 13 percent in 2014. Renewables constituted 90 percent of the increase in electricity generation in 2015.¹ And zero-emission energy sources are expected to constitute 60 percent of installed capacity by 2040.²

Overcoming traditional barriers has accelerated the pace of adoption and progress of renewables.

Renewable energy is now more accessible and affordable than ever. The cost of the technology itself has decreased. New financing vehicles have improved access and lowered capital requirements. And favorable regulation in parts of the United States has provided incentives for selling excess supply back to the grid.

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.

In 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. And 81 companies have committed to pursuing 100 percent renewable energy through the RE100 initiative.³

Five key developments in renewable energy

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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 can offer 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.

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The bottom line

Renewable energy can be used throughout the supply chain 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.

Before you make the switch renewables, download our full report and recommendations, using renewable energy to drive supply chain innovation, and then perform a careful upfront feasibility assessment, based on availability of resources and infrastructure, financial return, and secondary benefits such as reputation enhancement.

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^​1 International Energy Agency (Renewables have held steady at about 9.5 percent of total energy production in the US since 2013)
² Bloomberg New Energy Finance
³ As of October 6, 2016: http://re100.org/; https://www.whitehouse.gov/climate-change/pledge