What Is the Electrified Economy and Why Should Businesses Care?

What Is the Electrified Economy and Why Should Businesses Care?

As energy transitions to 100% clean electricity, energy users that go all-in on electricity can meet emissions targets, cut costs and climate proof their operations. Learn how to prepare for an electrified economy.

In the last decade, one fundamental truth about energy has transformed our lives and our businesses: more of the energy we use comes from the electric socket. Instead of offices, manufacturing facilities and vehicles running on fuels like natural gas or oil, they are increasingly being converted to electricity. And the trend will only accelerate.

At this pace, and as we continue to electrify nearly everything from transportation to buildings, the electricity used in the U.S. by 2050 could more than double — lifting electricity’s share of total energy used to close to 50% from about 20% today.

What does an electrified economy mean for businesses?

The energy transition to electricity — specifically carbon-free electricity — is at the center of our critical need to combat climate change over the next decade. As we decarbonize our power sector, electricity will be a clean, affordable, reliable energy source. Prices of renewable electricity and electric equipment will drop because renewables are faster to market, cheaper to build and cut dependence on volatile energy market prices — creating real cost-saving opportunities. 

Companies must move first and fast toward electrifying their operations to reduce their emissions, cut costs, improve efficiency and take advantage of price stability. Those that transform from passive energy consumers to active electricity market participants will capture greater value in an electrified future. Are you ready?

Clean electrification — the transition to a clean, electrified economy

If we want a fully decarbonized and electrified economy in North America — one that combats climate change and delivers clean, affordable, reliable energy — then we need to embrace clean electricity.

So how do we achieve clean electrification?

First, by decarbonizing the power sector, which means adding a massive amount of renewable energy and supporting technologies, like energy storage, to the electric grid.

Second, we must build out and modernize our energy infrastructure to deliver clean electricity to every corner of the U.S. by adding thousands of miles of new transmission lines. By thinking nationally, we can transition our power sector from a centralized system to a digitally connected decentralized model that is less susceptible to extreme weather and mass power outages. So, if, for example, there is an abundance of solar energy in Arizona, it can be used to power an energy spike in Chicago experiencing a deep freeze.

And third, turning energy consumers into active market participants. With advanced technology like onsite battery storage, EV charging and demand response systems, consumers and businesses can create value in a fully electrified economy —reducing energy use and earning payments by supporting the grid at critical moments.

Your operations as an island of power

As clean electrification takes form, businesses will need to invest in distributed energy resources (DERs) to monetize and save on electricity and ensure operation resiliency amid the impacts of climate change and increasing shareholder pressure. By installing solar-plus-storage systems and technologies that allow businesses to run independently of the grid, DERs can foster power and operation resiliency

As the electric grid transforms from an outdated distribution network — a one-way flow of power from plants to businesses and factories — to a modernized, interconnected system, renewable sources will be supplemented by numerous decentralized consumer sources. By adopting these DERs, businesses can be both energy producers and consumers — i.e.,“prosumers.”

A prosumer’s increasingly dynamic role in the energy market means a dramatic shift to their relationship with energy — transitioning from a passive user to a key player in the process. By leveraging technology and adopting proactive strategies, prosumers capture revenue otherwise left on the table.

Some of the most immediate and valuable opportunities for businesses making this transition include enrolling in demand response programs, generating power from renewable sources like rooftop solar panels, installing on-site battery storage and tapping into grid-connected electric vehicle chargers for corporate fleets and employees. Flexible energy projects like these can save businesses millions in energy expenses.

Electrification in action – Enel and University of Massachusetts Boston

The energy transition is accelerating, which spells opportunity to reimagine traditional business models and create space for new, sustainable growth. For example, the University of Massachusetts Boston recently developed a 25-year master plan that included creating a more environmentally sustainable campus. As a major step in that plan, they partnered with Enel X to add solar, storage and smart EV charging to the Boston campus.

At the center of the university’s strategy was the combined solar-plus-storage system, which automatically stored and used clean, low-cost electricity at times when consuming from the grid is the most expensive. The integration with the energy storage system allowsthe university to generate and store renewable energy, reducing the campus’s grid dependence and energy spending by more than $1.5 million in total value.

The innovative partnership — which leverages smart, cloud software to boost potential earnings — takes the campus to the next level by minimizing costs and maximizing the value of the solar energy generated.

Join the decade of electrification

The global climate crisis is the most pressing challenge of our lifetimes, and the coming decade could make or break our future. It is vital for businesses to electrify their energy consumption and join the solution to combat climate change. Renewables are the fastest way to meet global decarbonization goals, are cheaper to build and decrease dependence on volatile energy market prices. Clean electrification is a once-in a generation opportunity for businesses and energy consumers to capture a greater value of the electrified future.

Are your operations ready to plug in? Take the Clean Electrification Quiz to find out.