With a confluence of supply chain pressures, investor demands, rapidly evolving regulations, and the increasing prioritization of decarbonization, it’s no surprise that energy efficiency is a popular Scope 2 emissions reduction strategy. In fact, it’s the No. 1 strategy for sustainability leaders surveyed recently.
In contrast to Scope 1 emissions, which are direct greenhouse gas (GHG) emissions from sources that are controlled or owned by an organization (like furnaces or vehicles), Scope 2 emissions are emissions that a company causes indirectly by purchasing and consuming electricity, steam, heat, or cooling water. Because Scope 2 emissions occur at facilities where energy is produced (as opposed to a company’s own facilities), even the most energy-efficient organizations face challenges in reducing these emissions.
That’s why firms overwhelmingly view energy efficiency projects as the most important Scope 2 reduction activity over the next decade, according to a recent survey of 100 sustainability executives by independent research firm Verdantix. The survey, which was commissioned by Trinity Consultants, encompassed leaders across EHS, ESG, and operations roles at companies with at least $250 million in annual revenue in the North American construction materials sector.
Energy efficiency audits or projects play a critical role in Scope 2 reduction strategies for 84% of sustainability leaders. Other methods of Scope 2 emissions reduction considered by sustainability leaders to be a “very important” or a “most important” strategy in the near term include relying on decarbonization of the local grid over time (46% of the sustainability leaders surveyed); installation of on-site renewable energy projects, such as solar or wind (42%); waste heat recovery, or capturing and reusing heat that would otherwise be wasted in industrial processes, power generation or other applications (38%); and contractual arrangements such as renewable energy certificates (RECs) and power purchase agreements (PPAs), which can provide a purchaser with renewable energy at a predictable price (37%).
Energy efficiency projects typically focus on optimizing energy use, saving costs by identifying energy-saving opportunities, upgrading equipment, monitoring ongoing energy performance, and adopting advanced technologies. For example:
- AI algorithms are increasingly used for energy efficiency use cases to analyze consumption patterns and forecast future energy demand.
- Electric lighting systems often offer widespread opportunities for savings, including luminaire efficiency improvement, light source technology updates, light level reevaluation, and more.
- HVAC systems, which can represent a large energy expenditure (up to 50% of energy expenditures in commercial buildings), offer possibilities for emissions reductions for most facilities in several areas, including checking for oversized equipment and reducing airflow in unoccupied areas or at unoccupied times.
- Hot water systems can result in significant energy savings from generation and distribution by addressing underlying problems such as leakage or efficiency.
- Industrial motors (e.g., electric drives for fans, pumps, and mills), which the International Energy Agency (IEA) expects to account for more than 30% of global electricity demand growth by 2040, are ripe for energy efficiency projects focused on replacing standard efficiency with high-efficiency motors.
- Compressed air systems at industrial facilities are usually targeted during energy audits due to prominent leaks or inconsistencies with sizing of storage vessels.
Where to start?
Many organizations looking to manage energy usage and achieve energy performance improvements to reduce Scope 2 emissions must establish and implement a Plan-Do-Check-Act (PDCA) continual improvement system. The iterative management method involves four steps:
- Plan: Conduct an energy assessment and, in accordance with the company’s energy policy, establish the baseline, identify energy performance indicators (EnPIs), objectives, targets and action plans.
- Do: Implement the action plans.
- Check: Monitor, measure and report energy performance and efficiency against the company’s policy and objectives.
- Act: Take actions to continually improve energy efficiency and performance, and integrate feedback into the plan.
The impetus is now on companies to create smart, seamless ways to analyze consumption patterns and forecast future energy demand. Understanding and delivering on the benefits of energy management should be a core element of your 2024 decarbonization strategy.
Trinity Consultants has extensive experience with energy management programs, direct emissions quantification, life cycle assessment, development of EPDs, and implementation of decarbonization programs. To discuss these energy requirements and assessments further and to learn how Trinity Consultants can assist your company, please reach out to our Sustainability Services at
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