Aggreko report: ‘Rebalancing the Energy Transition’

Aggreko Rebalancing the Energy Transition (Photo: Aggreko)

Energy solutions specialist Aggreko has released the results of a recent survey covering how businesses across Europe are planning to address the energy transition and develop strategies to achieve net-zero goals.

The situation is particularly challenging in Europe, where the push to achieve new levels of reduced-emission operation are being required by the European Commission’s Corporate Sustainability Due Diligence Directive, which came into effect in July 2024.

One element of the directive, according to Aggreko, states that businesses must identify and address adverse environmental impacts ‘across their entire value chain’.

This will undoubtedly require some not inconsiderable investment. But as Europe endures a period of higher inflation and interest rates, it’s possible that business leaders could put environmental, social and governance (ESG) plans on the back burner to focus on the core business.

Survey results

To gain an insight into company and industry plans covering future investment in tech intended to support the energy transition, Aggreko surveyed 400 CEOs at companies in the UK, Germany, France and Italy with a turnover in excess of €200 million.

According to the results, 95% of respondents have changed their timescales with regards to net zero in light of recent energy supply and pricing issues. And while 80% are expecting to increase investment to support their energy transition over the next 12 months, most of this will result in only marginally higher budgets.

In fact, just 12% of CEOs responding to the survey agreed that decarbonisation was their ‘number one priority’; reducing energy costs and delivering a commercial advantage were other top considerations.

Cost is, of course, a major stumbling block to implementing the energy transition to cleaner, lower carbon strategies, but supply is also a problem. While 54% of CEOs said they were looking to expand their existing decentralised energy solution, 49% noted that the supply chain (fuel supply) was the among the greatest risks.

Apparently, the lack of a ‘standout’ model for energy procurement is further hindering the switch, with 36% of respondents still choosing capital purchases for their organisation’s energy strategy, despite the ‘difficult’ market conditions.

Such is the difficulty with putting in place plans for an energy transition, many industry leaders have extended their respective timeframes for achieving net zero goals.

In France, more than 60% of respondents indicated they had adjust transition targets due to supply and pricing issues. In Germany, almost 60% agreed. While fewer, more than 40% of respondents in Italy said they had needed to extend net zero planned targets.

In the UK, more than 50% of respondents said that they had adjust short-term goals, but were on track for achieving net zero targets. In Germany, France and Italy, only about 30% of respondents were of an equally positive mindframe.

In conclusion, the Aggreko report notes that demand for power in combination with rising energy costs are ‘intensifying’ the challenge of delivering a transition to clean energy.

Essentally, while achieving a switch to low-carbon fuels is considered necessary, it is critical that the numbers make sense. The overall view is that the supply chain needs to be more robust, in terms of supply and delivery, while favourable access to capital must be in place to support future plans.

Click here to download the full report from Aggreko.