In recent years, businesses have faced increasing pressure to adopt sustainable, clean energy practices. This shift has been bolstered by investments and technological advancements, making renewable energy sources more affordable than ever. According to ExxonMobil, global energy demand is projected to reach 660 quadrillion Btu by 2050, a 15% increase from 2021, driven by population growth and rising prosperity. Over the next decade, significant changes in both climate and energy policies will have major impact on all aspects of national energy systems. Factors that are influencing these evident changes include financing shifts, continuous technological advancements, and changes in energy supply and demand.
BENEFITS OF RENEWABLE ENERGY ON A GLOBAL SCALE
One of the biggest benefits of using renewable energy is that sources are all around us, and with proper investments and structural foundations, can be easily established depending on the country's natural resources. Contrary to popular belief, renewable energy is actually the cheapest power option in most parts of the world today. It is also in the best interest of countries to begin transitioning, as the more dependent they are on fossil fuels, the more likely they are to be vulnerable to geopolitical shocks and crises. The fluctuations in global oil prices, supply disruptions, or geopolitical tensions in oil-rich regions can GREATly impact the operation of fossil fuel dependent organizations. The cost of renewable energy technologies has dropped dramatically, having fallen from 85% between 2010 and 2020. According to the World Health Organization (WHO), about 99% of the global population breathes air that exceeds quality limits, contributing to over 13 million deaths annually due to unavoidable environmental factors like air pollution. Fossil fuels contribute to a majority of the fine particulate matter and nitrogen dioxide in the air. In contrast, renewable energy sources emit substantially fewer pollutants and harmful byproducts, making them a healthier alternative. Economically, renewable energy is more viable: in 2020, subsidies for the fossil fuel industry reached $5.9 trillion, yet the potential benefits of switching to renewable energy, in terms of pollution reduction and climate impact mitigation, could yield global savings of up to $4.2 trillion annually by 2030.
AN INSPIRING EXAMPLE OF TRANSFORMATION
Ørsted, a Danish company established as DONG in 1973, is a GREAT case of transitioning from fossil fuels to renewable energy. In 2006, Ørsted primarily relied on fossil fuels, with coal-based energy making up 85% of its production and contributing to 1/3 of Denmark's emissions, making the organization Europe’s most fossil-fuel intensive company. How did Ørsted, once Europe's most fossil fuel-intensive company, transform itself into the region's No.1 offshore wind farm developer by gigawatt capacity? Facing intensifying carbon emission policy pressures and financial crises, Ørsted was compelled to pivot away from fossil fuels. This strategic shift involved acquiring companies in the energy sector, and in 2006, they rebranded themselves as DONG Energy to reflect this new direction. Later in 2008, they made large investments in the development and construction of offshore wind farms both in Denmark and abroad, marking the beginning of their renewable energy-focused efforts. Following this was a change in strategy and vision called 85/15, this plan reversed their energy generation from 85% fossil fuels and 15% renewables to 85% renewables and 15% conventional sources, marking a significant turn toward sustainable energy. In a decisive move toward green energy, the company divested its oil and gas business in 2017 and rebranded as Ørsted, symbolizing its commitment to sustainability by completely selling off its remaining oil and gas businesses.
The renewable energy sector, abundant and high potential, is now both the most profitable and necessary choice. Companies are increasingly recognizing the detrimental impact of fossil fuels, and with the environment at a critical juncture, urgent change is essential to prevent irreversible damage. As businesses embark on the transition to renewables, they should remember that worthwhile pursuits are often challenging; setbacks are inevitable, but commitment and persistence toward sustainable practices are key.