It’s not a sprint, it’s a marathon: Challenges to net-zero, Ep #4

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

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Connect with Greg Kandankulam

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