Natural resources have been used throughout to ensure that our basic needs are met; however, the overuse and wastage of resources have led to global warming and the near extinction of these resources.
Utility companies have sought newer ways to provide their clients with the same products but with modern methods.
Renewable energy has now come into play, using modern techniques to get the same resources without damaging the environment or adding to the carbon footprint of releasing chemicals into the air. Businesses can switch to renewable energy to save on costs and help keep the environment cleaner.
3 Reasons Why Utility Companies Need to Switch to Renewable Energy
These are the critical factors in why utility companies need to switch to renewable energy and become more sustainable.
- Increase in consumer and shareholder demand.
With customers and shareholders pushing for more eco-friendly business practices.
- Cheaper to manufacture renewable energy
It is cheaper to manufacture renewable energy as more companies and people are using it.
- Increased in government regulations
Governments are encouraging businesses to reduce their carbon emissions and switch to renewable energy sources to become sustainable for the future.
Biggest Challenges Utility Companies Face within the Industry
As consumers’ needs change, the industry faces many challenges and obstacles that can become reasons why companies need to change how they need to change with the current time they are in.
Here are a few of the challenges Utility companies have been facing:
- Balancing supply and demand
By finding the balance between creating a new supply of green energy over the current traditional energy supply and keeping track of their carbon emissions.
Making the switch from human-controlled supply using coal, hydro energy and gas to a weather-controlled supply using water, sun and wind can cause a shift in the variable costs and how much supply will be able to meet the demands.
- Escalating financial impact
Although making the switch to manufacturing renewable energy can be cost-effective to business operations, factors such as severe weather conditions can affect the production of renewable energy which can potentially lead to shut downs.
This means having a plan in place to ensure that businesses always have products to supply their services.
- Change in customer preferences
Since most customers are moving to green energy, the pressure for utility companies that still supply energy and gas using traditional methods will lose out on their clients if they cannot meet the new demand for renewable energy.
- Increase in complexity of the power grid
The increase in renewable energy makes the grid more complex in terms of the new load it has to take, this leads to a decrease in revenue but an increase in transmission and distribution networks to be able to meet the increased demand of the clients/customers.
This can lead to a risk increase in the grid’s reliability and the security surrounding the product itself.
- Increase in digital and technology advancements within the industry
This has changed how utility companies provide their services as technology has led to newer software usage and services added to their current abilities to stay within the modern business era.
How Utility Companies are Trying to Become Sustainable?
Making the switch to renewable energy has become cost-effective for businesses to operate as this switch has reduced costs. The production of renewable energy has led to the increase in its demand for green energy.
This means making renewable energy is basically cheaper than a traditional power plant as the resources needed to manufacture green energy are free resources such as the wind, sun and water.
Manufacturing green energy is creating sustainability for these utility companies as these resources will always be available which allows these companies to stay in business for a very long time while satisfying their customers demands and meeting the government’s needs of becoming a net zero carbon country.
How Utility Companies can expand sustainability to their supply chain
The following ways are actions that utility companies can implement to make sure their supply chain is sustainable.
- Source their materials ethically and make sure that their labour standards are fair throughout the supply chain.
- Use sustainable engineering and design practices.
- Use energy-efficient ways to operate assets and equipment that ensures safety for both the workplace and the environment.
- Create a long-term sustainable strategy for all processes within the company.
- Incorporate logistic processes that will help reduce emissions and the company’s carbon footprint.
Newer Methods that Utility Companies can use in their Operations
Here are a few considerations Utility companies can look at when changing their business approach to incorporate sustainability.
- Invest in clean energy and electricity supply
This has been taking the lead over the usage of oil and gas supply.
- Ensure grid reliability and stability
With the increase in renewable energy from clients, utility companies should secure a reliable supply to keep in business.
- New Business models
Create a newer business model to ensure that traditional practices do not get in the way of new methods of products and services.
Strategic Priorities for Utility Companies
While moving over to the digital phase of utility companies, here are some strategic priorities that companies need to put in place to continue thriving in the industry.
- Build customer relationships
To keep your old customers from moving to other utility companies and to attract new clients, utility companies should use the digital space to their advantage and reach out to customers and market their services to meet clients needs.
- Regulatory security and compliance
Maintaining security among client data and enforcing privacy regulations is a must to gain the trust of your clients.
- Improve business operations
Implement digital management of business operations and cut costs on waste by implementing reduction methods.
- Try new revenue streams
Selling other energy related products can increase the revenue the company makes and also helps keep customers underneath on roof for all their utility needs.
Conclusion
Renewable energy is paving the way for utility company futures.
Customers now have the ability of making the switch of who they want their energy supplier to be which has made utility companies work twice as hard to provide the needs demanded.
A sustainable future is not only necessary for utility companies but also for the environment as well. By changing how utility companies produce their services is a start to making a change against global warming and carbon emissions.