November 15, 2018
U.S. electricity consumption alone is predicted to increase by 40 percent by 2050, according to National Renewable Energy Laboratory. Meeting these needs and the “electrification of everything” around the world will require a transformation of the fuel mix and deployment of new technologies that provide clean, affordable electricity. By expanding and accelerating access to new forms of power, AES is strengthening its portfolio, making it more resilient and climate-transition ready.
We assessed our portfolio through scenario analysis consistent with Task Force on Climate-related Disclosures (TCFD) recommendations. AES is the first publicly-traded owner of utilities and power companies in the U.S. to do so.As part of that strategy, we have extended the commitment to building a sustainable organization by reducing our carbon intensity (tons of carbon dioxide/MWh) by 70 percent from 2016 levels by 2030.
Challenging our company and others like us to think big
This target is 40 percent higher than our previous goal set in April 2018. The increase is a result of the work we’re doing with customers to support the transformation of electric systems all over the world through clean energy growth platforms of renewable energy, energy storage, LNG and smart, efficient grid.
The TCFD recommendations empower businesses to challenge their approaches to climate preparedness and move the world to better outcomes. We hope more businesses recognize these opportunities and adopt the recommendations of TCFD to create long-term, effective climate strategies.
The publication of The AES Climate Scenario Report shows not only AES’ resilience but also that the company will thrive across all the climate scenarios analyzed. The analysis incorporates third-party inputs from the International Energy Agency (IEA) and the Intergovernmental Panel on Climate Change (IPCC) including the 1.5-2 ⁰C scenario codified in the Paris Agreement.
Working now for a sustainable future
Regardless of policies, the implementation of our portfolio strategy will have a greater positive impact on the world and help fulfill AES’ mission of improving lives by accelerating a safer and greener energy future. Moving toward renewables and low-carbon technologies provides greater opportunities over the long-term, helps tackle climate change and meets the ever-changing energy needs of the markets in which we operate.
Already, our renewable energy projects are providing low-cost, emissions-free energy, while improving air quality and protecting the environment for future generations. We believe the integration of renewable energy and storage solutions is one of the most promising opportunities in the industry.
In fact, the report analysis shows that carbon capture and sequestration could be costlier and later to market whereas renewable energy is more economical and can lead to more sustainable growth for our customers and stakeholders.
Our shifting portfolio includes innovative solutions such as the green blend and extend offering, which systematically replaces coal with lower cost renewables and accelerates access to low-cost solar and wind for existing customers, while maintaining the reliability offered by the thermal assets. Through 2020, we expect to add two to three gigawatts (GW) of new capacity in renewables annually.
The industry is driving to limit climate-related impacts, and I am proud to say we are leading the way. The strategy detailed in the report demonstrates the company’s commitment to delivering attractive returns for shareholders while being one of the world’s leading global sustainable energy companies for years to come.