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Geopolitical instability has made electrification more urgent for four in five business executives responding to one of the biggest corporate polls since the Middle East energy crisis.
The struggle to absorb energy charges has thrust the issue up the agenda for companies focused on how to electrify their operations cost-effectively.
The survey of almost 2,000 executives across 18 countries — initiated by green campaign groups but conducted independently and outside of their membership — also found that 91 per cent believed the switch from fossil fuel-powered equipment to electric alternatives, such as electric furnaces, heat pumps or vehicles, would improve their energy security.
The chief executive of the Swiss-Dutch multinational chemical company DSM-Firmenich, Dimitri de Vreeze, said a shift to renewable energy and expanding electrification of operations was already improving the group’s energy security and cost predictability.
“Businesses today are operating in a structurally more volatile energy landscape, where continued reliance on fossil fuels exposes companies and economies to recurring shocks,” he said.
Leading European pharmaceutical group Roche backed the view. It has a goal to cut absolute emissions from operations by 70 per cent by 2029, from 2022 levels, including an 85 per cent reduction in fleet-related emissions, after achieving full use of sustainable electricity at all sites last year.
“Our experience shows that electrification can help strengthen operational resilience and support long-term business continuity,” said chief executive Thomas Schinecker.
Christian Hartel, president and chief executive of Wacker Chemie, the Munich-based chemicals multinational, said more than 60 per cent of the energy used in its processes was already electricity-based.
The polling was carried out by the Public First agency on behalf of green groups E3G, We Mean Business Coalition and the Global Renewables Alliance, but did not target constituents of those organisations.
It covered Australia, Brazil, China, Colombia, France, Germany, India, Indonesia, Japan, Kenya, Nigeria, Philippines, Poland, South Africa, South Korea, Turkey, the UK and the US.
Three-quarters of those polled said they expected to replace the majority of fossil-fuel-powered equipment by 2030, but 72 per cent complained that government policies were lagging behind and hindering the shift to electrification.
“This is not the first fossil fuel crisis, and it will not be the last,” said José Manuel Entrecanales, executive chairman of ACCIONA, the Spanish infrastructure group. Dependence on imported fuels was a strategic vulnerability, he said.
“What businesses need now are the grids, market structures and policy frameworks that can match their ambition and unlock the full potential of electrification,” Entrecanales said.
A large-scale expansion and grid upgrades will be required to allow greater electrification, with the International Energy Agency estimating annual grid investment would need to double by 2030 from today’s $400bn a year.
The IEA said this year that electricity consumption was projected to grow at least 2.5 times faster than overall energy demand over the next five years, driven by rising consumption from industry, electric vehicles, air conditioning and data centres.
Electrification is seen as a key to the shift away from burning fossil fuels by green advocates, as electricity can be efficiently and cheaply supplied by clean sources. In some countries, however, fossil fuels such as coal remain a major part of the power system, including China as the world’s biggest emitter.
The survey found businesses in heavily populated developing nations including Nigeria, Indonesia, India, the Philippines, Colombia and South Africa were among those with the most ambitious electrification targets.
*This has been amended from the original article to expand on the decarbonisation plan
