The Climate Board is pleased to announce the release of its latest research on fleet electrification. It is clear that electric vehicles will occupy a growing role in corporate fleets, but it is less certain how companies will weather the transition. The Climate Board has conducted extensive research to support business leaders with evaluating, purchasing, and operationalizing electric fleet vehicles to navigate the shift deftly and avoid struggling through missteps.

Members of The Climate Board can follow the links below to access three resources developed throughout the research process and avoid major roadblocks:

• Fleet Electrification Primer

This primer will outline the motivations and practical challenges of electrifying fleets, as well as the essential first steps to prepare for successful fleet electrification.

• Fleet Electrification Driver Interview

Engaging critical stakeholders is a key element of any major transformation; for EVs, ensuring driver comfort with new equipment is critical to the success of EV programs. This interview explores how company drivers perceive and experience EVs, providing insight into ensuring a smoother transition away from combustion vehicles.

• Fleet Electrification Worksheet

This worksheet will help sustainability leaders begin evaluating both how fleet electrification will take shape at their companies and how their unique business needs will impact the equipment, funding, buy-in and time needed to successfully transform their companies’ fleets.

Earlier this month, the U.S. government released multiple reports projecting how the U.S. grid electricity supply may shift over the next 7 years with consideration of how the Inflation Reduction Act (IRA) and the Infrastructure Investment and Jobs Act (IIJA) will impact the energy sector. For many businesses, the implications of these acts make decisions on energy transition timing critical as the calculus for investing in bridge fuels has changed significantly.

The third week of March marked three major energy reports from multiple agencies:

• Energy Information Administration’s Annual Energy Outlook 2023
• National Renewable Energy Laboratory’s analysis of the IRA and the IIJA
• Department of Energy Office of Policy’s Power-Sector Transitions projection

We now have multiple scenarios estimating changes to the U.S. energy sector through 2030. The big picture? Renewable energy deployment is projected to get a massive boost, propelling the U.S. grid to reach 71-90% of energy produced from clean sources by 2030, up from 41% in 2022. Prior to the passage of Inflation Reduction Act, clean energy generation was projected to reach~52% by 2030. This larger portion of clean energy generation would lead to CO₂ emissions reductions of 26-38% for all U.S. energy-related emissions, or 72-91% below a 2005 baseline for the power sector. In addition to lower emissions, the increased supply of solar, wind, and other clean energy is projected to lead to 5-13% lower bulk energy costs than would otherwise be the case—that’s 3-6 USD/MWh.

However, the lower bulk energy costs of this transition do not capture other fees or transmission and distribution costs, so it’s unlikely energy consumers will reap the full savings. The cost of addressing transmission and distribution infrastructure is one of the most recognized obstacles to maximal adoption of renewable energy. Significant upgrades to the grid are necessary to ensure the U.S. energy system deploys renewable energy close to the higher end of these projections. Monitoring the pace and approach utilities, grid operators and legislatures take in response to this challenge will be key for corporate executives in the years ahead.

While no model is perfect, companies operating in the U.S. should incorporate these energy transition scenario projections in their strategic planning initiatives. While there is nuance between industries— some having no choice but to select cleaner combustion fuels for high-heat or energy-intensive industrial processes— many will be faced with evaluating these bridge fuels or pursuing electrification in the short term. According to these latest models, however, the carbon intensity of grid electricity may well be on par with these fuel sources by 2030. Investing in alternative lower-emissions fuels like renewable gas, hydrogen, and methanol may not make sense when electrification is poised to not only be cheaper, but also generate a much larger cut in carbon emissions than before the IRA and IIJA.

The Climate Board is pleased to announce the release of its latest research, a Guide to Renewable Power Procurement, plus a Spotlight on Aggregated PPAs. The renewable energy landscape is complicated, and there are many ways to make claims about renewable power. We spoke to companies operating market platforms and those who have already evaluated their options before settling on an aggregated PPA. This work is a resource for those in the early stages of the journey or looking to build on their existing renewable portfolio, to grow their own knowledge or communicate with other stakeholders.

The insight note begins with a summary of the most common renewable energy choices available to companies in the market, noting key characteristics, advantages, and drawbacks to help sustainability leaders get started identifying the best fit for their company. Next, the note focuses on the aggregated PPA— the problems it solves, new challenges that arise, and what companies can expect during the development of the project. Interspersed with the text are case studies of existing aggregated PPAs to provide a look at real-world examples of successful projects and the lessons learned.

Check out the research and download the summary here.

The EU’s Fit for 55 deal, which legally obligates member States to reduce carbon emissions 55% by 2030, took another step forward recently with new details on decarbonizing buildings. Buildings make up one of twelve components in the deal and are at least partially responsible for approximately 36% of energy-related emissions in the bloc. On October 25, the European Council announced that the EU member states had agreed to stricter rules around building performance, specifically requiring all buildings built in 2030 or later to be net-zero and all building stock to be decarbonized by 2050. The Council is also proposing that all new public or non-residential buildings over 250 square meters have rooftop solar by 2026, extending to all new residential buildings by 2029. Next, the buildings directive will move to the European Parliament for negotiations.
 

Twelve focus areas in the Fit for 55 deal
(Source: European Council)

The influx of funds and regulation would change the calculus for decarbonizing buildings and infrastructure. Drawing on The Climate Board’s previous research, Accelerating Decarbonization in Transportation and Infrastructure, some of our strategy recommendations look a bit different now. The agreed-upon building rules will go a long way to breaking down the structural barriers hindering the adoption of greener methods and materials in the construction industry. 

• Recommendation One: Treat cost-saving measures as opportunities to develop decarbonization skills. Skill development is even more critical in the immediate term before the adoption of new requirements because companies now face a strict timeline to develop the expertise needed for green new builds and retrofits on a massive scale. Building that expertise will position the most advanced businesses to win more green contracts later. 
• Recommendation Two: Seek out “springboard” projects that feature conditions well-suited to decarbonization, and use them as proof points for new materials and methods. This imperative, and our recommendations for how to identify potential springboards, will still ring true, but the number of projects that are opportunities for green building practices will skyrocket. Companies will likely not have to work as hard to foster, create, and win bids for these springboard projects.   
• Recommendation Three: Adopt collaborative and transparent decision-making processes that facilitate carbon-conscious project design. With more stakeholders in the design and build process thinking about carbon, collaboration and multi-stakeholder decision making will become much easier. Still, make sure your company is among those leading the pack in integrating carbon considerations into projects.  

Of course, buildings are only one of the areas covered in Fit for 55, so stay tuned as the full Fit for 55 package takes shape and The Climate Board shares additional insight into how the rules will impact businesses’ transition planning. Even companies outside the EU should keep track of how the building and construction industry adapts to a rapid shift in the regulatory environment there, both to remain competitive in the EU and to prepare for similar rules trickling into other markets; the global state of play in construction and buildings will likely shift toward the EU standard, albeit more gradually.  
Revisit Accelerating Decarbonization in Construction and Infrastructure for the full list of recommendations and look forward to our upcoming research on fleet electrification and corporate power purchase agreements!