Value chain: downstream
Food & beverage manufacturing
By Karen Anne Siruma www.eye4b.com
Rising cost of goods and services pose a risk to cost-effective electricity provision.
Electric utilities strive to balance affordability, reliability and sustainability.
Solutions include adopting clean energy alternatives, promoting energy efficiency and leveraging government support.
A look at recent sustainability reports of major electric utilities around the world reveals that maintaining reasonable energy pricing is a prevalent challenge for downstream operations.
Against a backdrop of rising living expenses, consumer attention keenly focuses on energy costs. Put in the spotlight, electricity service providers strive to achieve balance among affordability, security and sustainability – also known as the energy trilemma.
Utilities are investing in clean energy sources to mitigate price fluctuations linked to coal and oil. Companies such as American Electric Power and SSE Energy highlight the savings brought about by renewables due to lack of fuel costs. Meanwhile, various utilities consider nuclear and natural gas to be cleaner, more energy-efficient and more cost-effective replacements to baseload coal power. Duke Energy reported that its natural gas units emit 66.7% less CO2 compared with coal units of the same size.
Corporate reports underscore the pivotal role of subsidies and government policies in cushioning the impact of inflation on energy consumers.
In the UK, Duke Energy has rolled out various assistance initiatives for low-income households such as the Share the Light and Share the Warmth programmes, funded through customer donations and support from other organizations.
Various electricity firms have promoted energy efficiency and conservation measures to counteract escalating energy prices.
Recognizing the importance of energy efficient homes in curbing energy demand, SSE Energy implemented a program to retrofit “fuel-poor” homes to achieve a Building Energy Rating (BER) of B2 – the minimum rating that Ireland’s Building Regulations requires for new dwellings and those undergoing renovations. A BER B2 rating indicates a home is sufficiently warm while avoiding steep energy bills.
Electricity rate fluctuations carry rippling effects throughout the economy considering that energy is a key input to other industries such as manufacturing and infrastructure.
While high energy tariffs might contribute to inflation, they can also drive energy efficiency. Conversely, lower prices could boost business investment but potentially hinder the transition to net-zero targets due to heightened consumption.
