Seizing the Energy Transition

Climate concerns, policy changes, and technological advancements are rapidly reshaping our energy landscape. This energy transition is not a distant future but a present reality, and it has the potential to move us toward a future that’s cleaner, more reliable, and more affordable.

As landmark federal policies like the Inflation Reduction Act (IRA) and Infrastructure Investment and Jobs Act (IIJA) begin to take effect, analysts predict a staggering 68% increase from 2022 in global renewable electricity capacity by 2026.1 Meanwhile, experts project the microgrid market to more than double in value, skyrocketing from $26.9 billion in 2022 to an estimated $63.2 billion by 2027.2 For those who seize the moment, these opportunities are not just about growth but about potential profitability.

Amid these shifts in the energy sector, one question looms: How do these changes affect commercial and industrial energy consumers, especially the big players?

New Opportunities

It's not only lawmakers and energy companies making the bold moves. Businesses, especially large commercial and industrial (C&I) entities, have the power to shape the energy landscape. Despite accounting for only about 10% of a utility's customer base,3 C&I businesses drive approximately 62% of energy demand.4 This significant influence positions them to lead in the energy transition and demand improved future emissions, reliability, and affordability.

With such a substantial share of energy usage, C&I businesses have a unique opportunity to accelerate the energy transition. By embracing new energy opportunities, they can deliver value to their customers and stakeholders and contribute to a cleaner, more reliable energy future. These opportunities can take a few forms:

• Meeting decarbonization goals: The first step is often working to meet decarbonization goals, such as regulatory requirements, customer requests, or guidelines. These frequently contribute to broader climate and organizational goals and initiatives.

• Improving reliability: Businesses have the option to add dedicated renewable energy sources to solve the challenge of maintaining power. Resiliency can have various benefits depending on the need and application of power – from manufacturing, which requires strict power quality, to healthcare facilities, where maintaining power flow is often a matter of life and death.

• Adding flexibility to energy usage: Historically, this might have been limited to demand-response programs, where customers significantly reduce or shift electricity usage during peak periods. Today, however, digital tools can enable entirely new processes and flexibility, decreasing the need for customer oversight while they help equalize supply and demand.

• Financial benefits from cleaner energy: Despite inflation, a dramatic decline in the cost of renewable power generation is the most significant factor driving their widespread uptake. 5 This shift to cleaner energy aligns with environmental goals and can present a significant business opportunity for C&I entities, making it a win-win situation.

This new dawn for C&I is about optimizing electricity supply and demand in previously unworkable ways, opening new options to consider what optimization looks like.

Meeting Energy Challenges with Integrated Solutions

The energy mix is evolving, and new options are coming online. Businesses must seek the right mix that aligns with their business dynamics and goals. For example, you might ask:

• Does geography present different solar or wind advantages for different facilities?

• How can I best use the various tax incentives available in my operating area?

• Do certain fleet dynamics make electrification a viable option?

• Which sites make the most sense for microgrid deployment?

In this changing energy landscape, there's no one-size-fits-all approach. However, a common thread is the necessity for integrated solutions that meet multiple layers of criteria. This holistic approach is key to navigating the complexities of the energy transition and achieving your energy goals.

It's also important to remember that the energy transition is not simply a drive to replace fossil fuels with renewables. Looking at the potential of integrated energy solutions from a broader perspective opens even more possibilities for the future.

For example, consider the components typically found in a microgrid as an integrated energy solution. It starts with a solar energy source that can provide reliable, renewable power during much of the day. Atop this, battery storage compliments production to serve loads during peak energy usage or even routine operations. The same microgrid can meet resiliency needs by "islanding" – operating independently from the grid – during major grid events. It can ultimately provide financial benefits by participating in energy markets and reducing usage during peak times to impact charges in demand.

This is just one example; the elements of an evolving energy mix often combine for a more holistic solution.

Starting Your Journey

Businesses and society are entering a new era of generating, delivering, and consuming energy. These changes also open opportunities for how we view energy, enabling new ways to meet climate and environmental goals while still considering quality of life for communities and efficient operations for businesses of all types.

For C&I businesses, energy is only sometimes a core part of operations. Enlisting a third party like Shell Energy, which can provide integrated energy solutions, can support you in meeting goals across multiple business, climate, resiliency, and regulatory objectives. Collaboration can provide the necessary guidance and support to navigate a complex energy landscape, making the transition smoother and more beneficial.

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