The Race to Net-Zero podcast is a six-episode series featuring conversations with energy industry experts and businesses committed to net-zero carbon emissions. In this season’s final episode, host John Failla introduces Scott Hart, Head of Sales for NRG Business. They discuss the state of net-zero, the future of the journey, and the importance of collaboration for net-zero success.

 

In today’s episode, we cover:

• What is driving the change in the industry? [03:34]
• The difference between data and alignment [06:56]
• Sectors making the biggest moves toward net-zero [10:49]
• Eastern Europe’s impact on the U.S. energy market [17:56]
• Collaboration for net-zero [21:46]
• NRG’s customer philosophy [25:06]

 

Sustainability is a business imperative

The last few years have seen a significant acceleration in the emissions reduction space. NRG used to solicit and market its capabilities, but now organizations are seeking them out. NRG is heavily invested in managing emissions, setting goals, and finding solutions. The key drivers for companies are customers and stakeholders demanding that companies step up to mitigate their environmental impact.

Employees also expect companies to be aware and take action toward emission reduction. People see real risk and opportunity. Now a company’s reputation can be at risk if it doesn’t have quantifiable, scientifically based objectives and demonstrate action toward reducing emissions. Companies no longer see emission reduction as an incremental cost or burden. They’re using it as an opportunity to differentiate themselves from the competition.

 

Increased complexity

Organizations need insight and guidance to manage complex transactions, lower their carbon emissions, and deal with a more complicated and dynamic grid. It’s possible to combine these into one strategy with comprehensive data and organizational and stakeholder alignment.  Historically, NRG communicates with the sustainability group as well as the operational and finance departments within a company to ensure a unified approach.

Over the past few years, NRG has demonstrated how to integrate emissions and business objectives. Together with an organization, they develop strategies that start with a comprehensive Scope 1, 2, and 3 analysis and present emissions reducing options. If a company has data and alignment, it can begin to implement plans.

 

Energy transition

The world is in a massive transition akin to the industrial era of the twentieth century. Although manufacturing and processing of electricity haven’t changed significantly, the energy industry is introducing renewables to the grid and taking on the complex task of integrating them along with aging fossil fuel resources. The industrials are going through a transition as they face emission reductions challenges, whether voluntary or regulatory.

Western economies have absorbed the vast majority of electricity, and emerging economies are creating further demand. The general transition from fossil fuels to electricity, specifically in electric vehicles, is driving demand and complicating how enough electricity is produced and delivered. While the situation is complex, the one sure thing is the exponentially increasing demand for electricity. The energy industry will have to find new ways to meet those needs.

 

Resources & people mentioned

• State of Decarbonization Study

Connect with Scott Hart

• On LinkedIn

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The Race to Net-Zero podcast is a six-episode series featuring conversations with energy experts and businesses who have committed to net-zero carbon emissions. In this episode, host John Failla introduces Jeanne-Mey Sun, Vice President of Sustainability at NRG Energy. They discuss the depth of NRG’s work in sustainability, as evidenced by NRG’s comprehensive 2021 sustainability report published this summer.

 

In today’s episode, we cover:

 

• NRG’s sustainability foundation [03:34]
• Challenges and lessons [08:29]
• SBTi and customers [13:06]
• Advisory services [20:34]
• Working with suppliers [23:09]

 

Becoming a sustainability leader

 

NRG approaches sustainability in an all-encompassing way, which spans its entire value chain and accounts for the interests of its stakeholder ecosystem. To demonstrate the comprehensiveness of this approach, NRG developed five pillars: sustainable business, sustainable customers, sustainable operations, sustainable workplace, and sustainable suppliers. This sustainability framework and strategy cover every part of the business.

 

For years, NRG has had a strong desire to be a leader in sustainability, particularly on climate. The company wants to be part of the solution to climate change both because it’s the right thing to do and because it makes good business sense. NRG strives to be a leader in the energy sector for the good of local communities and the planet.

 

Strategies and goals

 

When a company is trying to develop new strategies and set ambitious goals, the biggest challenge is getting internal alignment, particularly from groups that will play a role in implementing the strategy and meeting the goals. NRG learned that it needs to be expansive in identifying its internal stakeholders and working with them from the beginning. Communication is essential to explain what the company is doing and why. Change will take time, and a phased approach is needed.

 

NRG’s current goal is to reduce 50% of CO2 equivalent emissions by 2025 and achieve net-zero by 2050. While this goal is ambitious, the company has successfully reduced its carbon dioxide equivalent emissions by 44% since its 2014 baseline and NRG was one of the first companies to have its targets validated by the Science-Based Target initiative.

 

Sustainable finance

 

In late 2020, NRG became the first North American company to issue sustainability-linked bonds, which tie attractive financing to the borrower’s realization of particular sustainability goals. The bonds aligned NRG’s financing, sustainability, and overall corporate strategy and helped fund NRG’s acquisition of Direct Energy in early 2021. That acquisition doubled its regular customer base to about six million and became a larger platform to provide more sustainable products and services to customers. The economies of scale afforded by this larger customer platform allows NRG to continue innovating affordable sustainability solutions that drive customer adoption.

 

NRG is focused on reducing the carbon intensity of the energy it provides its customers. In electricity, NRG offers a range of renewable electricity plans to both home and business customers. Renewable Select enables customers to secure solar, wind, or other types of renewable power. By supporting new local renewable projects, businesses can secure a fixed price for their power purchases and become leaders in spearheading sustainability initiatives in their region.

 

Resources & people mentioned

 

• 2021 SUSTAINABILITY REPORT | NRG Energy
• Sustainability Trends | NRG Energy
• ALLY Energy™ Announces 2021 GRIT Awards and Best Energy Workplace Winners

 

Connect with Jeanne-Mey Sun

 

• On LinkedIn

 

Connect with NRG Energy

• https://www.nrg.com/
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• www.smartenergydecisions.com
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The Race to Net Zero podcast is a six-episode series featuring conversations with energy experts and businesses who have committed to net-zero carbon emissions. In this episode, host John Failla introduces Kevin Arritt, Director of Renewable Strategy and Advisory for NRG, and Greg Kandankulam, Director of Sustainability Advisory for NRG. They discuss their perspectives concerning current hurdles on the path to net-zero and what tools are available for large energy customers to build a customized approach.

 

In today’s episode, we cover:

 

• How to start on the road to net-zero [02:57]
• Analysis paralysis in renewable energy markets [06:33]
• Addressing building-related emissions [11:36]
• The current state of the solar market [14:56]
• The Inflation Reduction Act [18:21]
• Engaging supply chain partners [25:28]

 

How to begin

 

The road to net-zero starts with having goals and a solid plan. The right way to reach net-zero isn’t universal; every business has unique factors to contend with when creating their plan. Sustainability planning has become even more difficult now that the science-based target initiative has included Scope 3 emissions into commitment submissions. Some companies are struggling with consumption and bill pay because they’re working through the data and making rate estimations versus actuals.

 

Internal struggles can be a hurdle to creating a net-zero plan. NRG works with many organizations with ambitious goals that want to make changes but may spend years trying to develop the perfect renewable energy strategy. By the time their plan has been carefully crafted, markets have changed, and they may find it’s out of sync.

 

Variability in the market

 

The availability and prices of renewable energy opportunities are based on what is currently happening in the market. Public policies, risk, and interconnection can vary significantly throughout the year causing different economics and opportunities for procuring renewable energy. Smaller, local projects have a set amount of availability or may run into interconnection issues. Those programs can offer low risk ways to help meet goals, but opportunities may be missed because of analysis paralysis.

 

The market has had a couple of years of unprecedented volatility due to supply chain issues, tariff uncertainty, tax credits falling off, and interconnection issues. While this has been happening, the insatiable need to meet sustainability goals has also been pushing the market forward. Large organizations must think through many of these issues to analyze and understand what’s happening, but analysis needs to be combined with being opportunistic.

 

Tackling Scope 3 emissions

 

Addressing Scope 3 emissions requires supply chain engagement. At the outset, removing as much ambiguity as possible will help set expectations for vendors. Long-term, vendors need to have a replicable, accurate process for measuring emissions so organizations can have impact-accurate reports. Improving that process will help on an individual vendor level and lead to a greater percentage of suppliers acting accordingly.

 

NRG has been working internally in this space and has received CDP grades for its supply chain engagement. Early in this process, engagement was slow, but the SEC rules and public net-zero commitments have led to more vendors becoming involved. Vendors understand that the market is shifting to net-zero and don’t want to be left behind due to lack of compliance. The relationship between the buyer and the vendor has become complicated and will require planning and establishing best practices that don’t currently exist. The best approach is for buyers and vendors to meet halfway to share the responsibilities of tackling emissions together.

 

Resources & people mentioned

 

• Local Law 97 - Sustainable Buildings
• The Inflation Reduction Act
• CDP

 

Connect with Kevin Arritt

• On LinkedIn

Connect with Greg Kandankulam

• On LinkedIn

Connect with NRG Energy

• https://www.nrg.com/
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Connect With Smart Energy Decisions

• www.smartenergydecisions.com
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The Race to Net Zero podcast is a special, six-episode series centered around your net-zero journey. Host John Failla introduces Chris Pennington, Director of Energy and Sustainability at Iron Mountain Data Centers, and Tracy Ross, Vice President of Sales, West Region at NRG Energy as they share how the renewable energy market is shifting with the adoption of cutting-edge technologies, new solutions, and a more customized approach to reaching net-zero emissions.

 

In Today’s Episode, we cover:

 

• [04:56] What’s happening in the world of renewable energy?
• [11:20] Changes in the renewable energy market
• [19:55] The direction of the renewable energy market
• [25:09] Iron Mountain’s data center
• [30:16] Forming successful partnerships

 

What is a sustainable business?

 

The definition of a sustainable business has expanded to include the pursuit of net-zero goals, even as net-zero itself is still being defined. Initially, net-zero was viewed through Scope 1 and Scope 2 lenses. As the science-based targets initiative broadened net-zero to include Scope 3, companies started recognizing the significant impact of supply chains. 

 

The only way for an organization to achieve a net-zero goal is to focus on new technologies and solutions that will drive the results needed. The concept of net-zero is becoming more mature and defined. Even within the narrow scope of renewable energy, the idea of true-zero is emerging. Many changes are happening, and technology will likely be the key enabler in achieving progress.

 

Changes in the data center industry

 

The landscape for the data center industry is evolving. With their footprint expanding into new markets, resource management and power availability continue to be a priority. As energy price concerns rise in Europe, organizations and industries are considering how to best navigate these challenges. Meanwhile, there is a real risk around reliance on fossil fuels or energy supplies from singular countries.

 

 

One advantage of the data center industry is its ability to invest in technology and solutions that drive results. The top of the list of the largest clean energy buyers today is dominated by data center operators. If the industry can continue to move quickly, it can bring solutions that will help alleviate the need for regulation in the future. 

 

Next steps in technology

 

Energy storage is critically needed today. Luckily, exciting new battery chemistries and designs are coming to the market and geothermal technologies are improving. As such, organizations are investing in energy storage options and geothermal generation with less risk. 

 

Advances in geothermal technology can transform data centers like Iron Mountain from energy consumers to prosumers. Not only will this change bring jobs and data access, but it will also bring social benefits like helping the local utility achieve greater grid resiliency. Ultimately, new energy solutions like battery storage and geothermal technologies will create a valuable path forward for more sustainable business.

Resources & People Mentioned

 

• Climate Neutral Data Centre Pact
• State of Distributed Energy Resources Study

 

Connect with Chris Pennington

• On LinkedIn

Connect With Tracy Ross

• On LinkedIn

Connect with NRG Energy

• https://www.nrg.com/
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The Race to Net-Zero podcast is a six-episode series featuring conversations with energy experts and representatives from businesses that have committed to net-zero carbon emissions.

In this episode, host John Failla sits down with Priya Zachariah, Chief Resilience and Sustainability Officer for the City of Houston, and Greg Kandankulam, Director of Sustainability Advisory at NRG. They discuss the importance of the sustainability goal-setting process and programs the city of Houston has implemented to achieve its ambitious public commitments.

In today’s episode, we cover:

• Elements of goal setting [08:09]
• Keys to net-zero success [11:43]
• Public sector vs. private sector [14:53]
• Sustainability and resiliency in Houston [16:44]
• Advantages of a multidisciplinary approach [21:23]
• Current approaches and concerns [27:16]
• Effective partnerships [34:03]

Houston’s sustainability efforts

The practice of resilience and sustainability does not only involve a single actor or agency delivery system. The process requires multiple people, agencies, and scales of actors to come to the table. Selling a common vision from the beginning is critical to bring people and efforts together.

The city of Houston embarked on its sustainability journey in the days after Hurricane Harvey. The mayor brought people together under his vision to start looking at a resilience framework, and this led to the city adopting a plan called Resilient Houston, in 2020.

Under the umbrella of Resilient Houston, the city also has a Climate Action Plan. These efforts in parallel set the overarching vision of resilience and sustainability. The Climate Action Plan is driven by the mission of reducing greenhouse gas emissions and is based on key polluting sectors for the city of Houston. The ambition of this plan calls for Houston to be net-zero by 2050.

Equity in initiatives

The Resilient Houston plan takes the approach that underlying stresses in a community, particularly socio-economic disparities, put communities at an extra disadvantage as they deal with more frequent climate events. These events leave them in a constant cycle of need and recovery.

The energy industry must address building resilience, not just as a response to building climate resilience to climate events, but also to address those underlying socio-economic disparities and vulnerabilities. The Resilient Houston plan plays that role by placing equity at the center of many of its initiatives.

Houston recognizes that resilience and sustainability initiatives must be addressed at multiple scales simultaneously. That includes the scale of the individual Houstonian, or household, and large systems like the transportation network, the bayou network, and even the entire city.

Progress must be made across many scales with multiple actors under a shared vision. There also needs to be a clear articulation of the vision and the mission to start organizing people and operationalizing actions in implementing resilience and sustainability.

Effective partnerships

The work in Houston would not have been possible without multiple agencies and actors working together. Project delivery has changed into being partnership based. The Sunnyside Landfill Solar Project is an excellent example of private and public collaboration, as the city of Houston worked with the private sector, solar developers, utilities, and the community to create what will be the largest solar farm on an urban landfill in the country.

As part of NRG’s contract to take the city of Houston to 100% renewable powered electricity, NRG also provided value-added services for sustainability consulting and heat mitigation strategies. Part of that process was considering the resiliency needs in underserved communities.

NRG works within an ecosystem to seek partners to help strengthen their collective efforts with the city. Those partnerships are used to address a multitude of issues as the climate continues to evolve. Together, they are trying to create resiliency programs and understand what they’ll protect, whether that’s healthcare outcomes, economic viability, including providing resilience to anchor businesses, and even looking at the daily needs of citizens, ensuring bandwidth is up as they continue to work from home.

Resources & People Mentioned

• Resilient Houston
• Climate Action Plan
• ICLEI
• The State of Decarbonization
• Mayor Turner Announces TCEQ Approval of Largest Urban Solar Farm in the Country

Connect with Priya Zachariah

• On LinkedIn

Connect with Greg Kandankulam

• On LinkedIn

NRG Energy and Smart Energy Decisions are pleased to bring you a new educational project, The Race to Net Zero podcast, a six-episode series centered around the journey to net-zero for businesses like yours. This premiere episode features host John Failla from Smart Energy Decision and Lynda Clemmons, Vice President of Sustainable Solutions at NRG Energy.

In today’s episode, we cover:

• Lynda’s current role at NRG [01:20]
• Trends in emission reduction strategies [03:12]
• International influences [09:25]
• Formalizing reporting [15:19]
• Setting measurable goals [20:44]
• The future of net-zero [26:28]

The change in energy markets

Several factors have increased efficiency including companies’ focus on improvements through production and investment tax credits as well as market mechanisms. In the year 2000, wind towers were roughly 0.75 MW in size. Now, the standard install is 2.5 MW per hub, which is a tremendous increase. Similarly, solar efficiency has increased significantly over the past 20 years, reaching a point today where a residential application of panels is as much as 410 to 450 MW.

There have been incredible efficiency gains with predictions for more progress to come. In 2015, solar efficiency was around 18% and that number has grown to approximately 23%. New technologies are on the cusp of being developed that could see 30% or 40% efficiency, which would make a tremendous difference in the applicability of solar and a company’s ability to make those installations happen.

Key international influences

At the UN conference where the Paris Agreement took place, corporations shifted perspective and started to understand what their impact on emissions reduction could be. Small island nations were vocally represented and were determining what their heavy emitters are and how they could engage in the worldwide emissions reduction movement. The marches that took place during the meeting stressed how an increase in warming could potentially drown the small island nations due to the rise in sea level.

A conversation about current economics can't happen without considering the events in Ukraine. The war has highly impacted oil, natural gas, coal, and their associated usage. Governments in the UK and Europe are concerned about pricing, especially for natural gas. This global unrest has brought to light the fragility of the energy market.

Measurable goals

Accurately setting and achieving climate goals requires accurate measurements. An initial inventory of emissions helps an organization understand what realizing climate goals means. As companies try to determine their own emissions metrics and how to set goals around those measurements, they need to look at all scopes together. Supply chains may overlap in some places, and companies could be forced to double- or triple-count some metrics. A straightforward solution to every concern isn't available yet, but progress needs to start somewhere.

Sustainability tactics will be unique for every company, as well as decisions about who needs to be involved internally and externally. A sustainability team plays a significant role in helping the rest of the organization interpret data accurately, continue pushing forward to meet goals, and pursue sustainable design. Incorporating all the increased efficiencies in renewable energy, carbon capture, and potential reuse has tremendous possibilities for companies working towards a sustainable future.

Resources & people mentioned

• State of Decarbonization Study
• Evolution of the Clean Air Act | US EPA

Connect with Lynda Clemmons

• On LinkedIn

Connect with NRG Energy

• https://www.nrg.com/
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Connect with Smart Energy Decisions

• www.smartenergydecisions.com
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