Energy strategy for the future
Increasing energy demand, global climate change, and constrained energy supplies are likely to impact how energy affects your business in the future. Is your company prepared for the energy challenges that lie ahead? The ground-breaking report, Energy Strategy for the Road Ahead, reveals what 20 leading U.S. companies recommend businesses should do now to prepare for the risks and opportunities of our energy future.
The energy picture: Where are we now? Where are we headed?
EPA’s experience, through its interactions with U.S. companies, is that many are initiating energy programs. For companies operating formal energy programs, these programs are typically less than five years old. And, the involvement of senior executives in energy planning and decision making is just beginning.
Market trends suggest that the demand for energy resources will rise dramatically over the next 25 years1:
- Global demand for all energy sources is forecast to grow by 57 percent over the next 25 years.
- U.S. demand for all types of energy is expected to increase by 31 percent within 25 years.
- By 2030, 56 percent of the world’s energy use will be in Asia.
- Electricity demand in the United States will grow by at least 40 percent by 2032.
- New power generation equal to nearly 300 (1,000MW) power plants will be needed to meet electricity demand by 2030.
- Currently, 50 percent of U.S. electrical generation relies on coal, a fossil fuel; while 85 percent of U.S. greenhouse gas emissions result from energy-consuming activities supported by fossil fuels.
If energy prices also rise dramatically due to increased demand and constrained supply, business impacts could include:
- Reduced profits due to high operating costs.
- Decline of sales of energy-using products.
- Loss of competitiveness in energy intensive businesses.
- Disruptions in supply chains as suppliers are unable to meet cost obligations or go bankrupt.
Recent history also demonstrates that catastrophic weather events, terrorism, and shifting economic centers are not just events of our imagination but realities of our lifetime.
Given this challenging landscape, what steps do U.S. businesses need to take today to survive a potentially disruptive energy future?
The future of corporate energy management
Global Business Network (GBN), a member of the Monitor Group, in cooperation with the U.S. Environmental Protection Agency (EPA), gathered senior executives from 20 major U.S. companies to consider the potential energy impacts that U.S. businesses may face over the next decade.
Based on four plausible scenarios of the world in 2020, the report identifies a set of strategies that will help businesses act now to prepare for future energy-related risks.
1 Sources: Annual Energy Outlook (DOE/EIA-0383(2007)), International Energy Outlook 2007 (DOE/EIA-0484(2007), Inventory of U.S. Greenhouse Gas Emissions and Sinks: 1990-2005 (April 2007) (EPA 430-R-07-002)