The Rising Need for ESG in The Energy Industry
Understanding that the energy industry plays a crucial role in reducing the environmental impact of its operations is more critical today than it has ever been. Therefore, industry leaders must strive to align their business models with environmental responsibility best practices. By adopting an effective environment, social, and governance (ESG) model, industrial operators can ensure they minimize harm to the natural environment while striving to optimize their productivity.
What Is ESG?
ESG simply translates to environment, social, and governance. In the power generation industry, the activities of operators have to be carefully balanced against ESG issues such as carbon emissions and other forms of environmental pollution.
Effective ESG strategies include policies, operational guidelines, and technologies that can be used to make energy generation cleaner, limiting negative impacts on the natural environment.
ESG Trends in The Energy Industry
In the energy industry, operators are typically subject to strict emission regulations. Therefore, ESG compliance with local and national environment protection laws can be achieved by implementing these models.
Some examples of effective ESG trends include:
Hydrogen Technology
Apart from being one of the most common naturally occurring elements on earth, hydrogen gas is a highly useful source of energy that can be used as a clean fuel to power various applications. With many industrial players investing more in a cleaner energy future, hydrogen gas as an industrial fuel will continue to increase in popularity. Benefits of using hydrogen as an energy source include:
- Lightweight
- Ease of storage
- Zero-emission (no greenhouse gas release) rating
Carbon Capture Technology
Another highly effective method of fulfilling ESG commitments is using carbon capture technology. For example, emissions generated from power industries can be captured and stored or redirected into other applications.
Carbon capture technology can be deployed globally to deal with emissions from fossil fuel use. Carbon-based emissions can be recaptured and transported to locations where they can be safely stored in underground geological formations.
Renewable Energy Use
Renewable energy sources like wind, solar, geothermal, biofuels, are clean sources of power that can be replenished indefinitely due to their infinite supply. Power companies serious about a sustainable and environment-friendly manufacturing future are increasing the fraction of their outputs obtained from renewables. Utilizing renewable energy as an ESG strategy is an excellent way to comply with industry emission standards while investing in a fast-growing alternative to conventional fossil fuels.
Energy Storage Systems
Energy storage systems (ESS) are an effective ESG trend that can be used to preserve generated energy for later use. In addition, these power storage units can be used as stop-gap measures to sustain productivity during peak usage periods as well as unexpected failures of primary power sources. Pumped hydroelectric storage, capacitor units, flywheels, batteries, and compressed air energy storage systems are examples of ESS technologies.
Is ESG The Answer?
The simple answer is yes. Every industrial manufacturer should implement environmental, social, and governance policies as the benefits are numerous.
To begin with, the energy industry faces the very crucial issue of emission control. With a significant proportion of power generation still being sourced from fossil fuels, CO2 emissions into the atmosphere remain a dangerous concern.
With the integration of ESG strategies, energy companies can effectively cut their emission levels either by using renewable energy and/or capturing and sequestering the emissions from fossil fuel sources. Additionally, the growth of renewable energy translates to more jobs and the overall development of the energy industry. Therefore, investments in low-carbon energy generation are highly acceptable from a socio-political perspective.
Finally, with power companies being subjected to increasingly stringent regulations on fossil fuels, the integration of ESG policies will allow energy players to fulfill their emission reduction commitments.
IFS Supports ESG In the Energy Sector
IFS offers state-of-the-art engineering services to all clients across various industrial pursuits. In addition, DXP’s Renewable Energy Group offers efficient and environment-friendly equipment solutions to our partners in the energy sector. If you are looking to optimize your power generation processes in line with environmental responsibility standards, IFS is the right partnership choice to make.
To learn more about how you can achieve ESG compliance, please contact us today.