A survey of sector leaders by Utility Week has shown significant variance on the approach to including scope three emissions in decarbonisation strategies.
A research report, produced in association with global technology consultancy and services firm TCS, reveals that 60% of utilities’ decarbonisation commitments include scope three emissions – those resulting from supply chain activities or the consumption of products and services by customers.
Energy retailers – who generally own little by the way of physical assets and for whom influencing consumption lies at the core of their net-zero carbon role – are most likely to have made scope three commitments, with 92% having answered in the affirmative during our research.
Water companies are least likely, with just 36% saying scope three emissions targets are currently included in their decarbonisation strategies.
Interviewed for the report, Ofwat’s senior director of strategy and planning John Russell acknowledged this was an area the sector is just starting to grapple with, pointing to some early work with chemical supply chains where any embedded emissions lie. However, Russell warned of the need for more robust and commonly observed measurement frameworks to be set up before scope three can be approached in a meaningful way.
For energy networks, where 68% of companies have made scope three commitments, progress is being assisted by the rising role of energy flexibility in managing network capacity, according to Peter Emery, chief executive of power distribution network Electricity North West.
As networks use flexibility more to avoid and defer network reinforcements, Emery explains that scope three emissions will also be curtailed through a reduced need to use the carbon intensive materials needed in new infrastructure.
Inevitably though, as dependency on the power system grows through electrification of transport and heat, electricity infrastructure will need renewing and extending. As this happens, Emery is clear that markets and innovation need to come together to improve the availability of carbon neutral materials – including currently carbon intensive materials such as steel, copper and aluminium.
“For us to be net zero, we need net zero steel. That’s an economic and technology hurdle, but until I can buy net zero steel, I’m not going to have net zero transformers.”