I proudly joined NRG exactly one year ago as the new head of sustainability, knowing I was joining the power sector at a time of rapid transformation. It’s an exciting time of technology and business model innovation, but it’s also a time of uncertainty. The surest thing we know about the future of power is that it won’t look like the past.
On July 12, 2017, NRG unveiled a transformation plan aimed at simplifying and streamlining the business. [Ed. note: for NRG this meant divestiture of 50 to 100 percent of the company’s interest in NRG Yield Inc and its renewables platform] The actions detailed in the plan are designed to strengthen our balance sheet and make NRG better positioned to capitalize on future growth opportunities. Part of that plan involves reevaluating the way we participate in the renewable energy market even as we continue to see renewable energy as an essential part of the energy mix today and in the future. This led some stakeholders to ask whether our commitment to a sustainable energy future, or to being a sustainable company, had wavered. My answer to both is firmly – no.
How can this be? It begins with what we’ve previously coined “The Four Product Future:”our view of the four technologies that have the potential to transition the power sector to a low-carbon future. The first product is the deployment of renewables at scale. The other three – storage, controllable demand, and fast-ramp gas – are critical systems meant to ensure the first can be successful, and reliable. Significant market opportunity exists for companies that are able to apply their expertise and market position in support of this vision, and NRG is already well-positioned and active in these systems.
Beyond market enablement, it should be understood that sustainability permeates NRG’s entire business and operations. Earlier this year, we expanded on prior goals to unveil a five-pillar sustainability platform with commitments across our value chain: suppliers, operations, business, workplace and customers. Make no mistake, these goals and their supporting initiatives remain unchanged by our announced transformation plan.
Perhaps our most visible goals are those that relate to addressing climate change, where NRG has been at the forefront in many areas. In 2014, we set industry-leading, science-based goals to reduce absolute greenhouse gas (GHG) emissions 50 percent by 2030 and 90 percent by 2050.
These goals can only be met by reducing the carbon emitted by our conventional power generation assets – not by diluting our carbon profile through adding low-carbon assets like renewable generation and storage solutions. Today, the key levers we’re using to make progress include coal-to-gas switching, plant retirements and shifting from baseload to flexible fast-start generation capacity. As of the end of 2016, we had already reduced GHG emissions by 36 percent, more than two-thirds of the way to our 2030 milestone. New technologies are coming to the market regularly, so we don’t necessarily know all the additional levers that will emerge to help us meet these goals – but we’re already ahead of schedule and I like our odds of meeting or exceeding this goal by 2030.
And sustainability at NRG extends beyond GHG reductions. As demonstrated by our sector-leading supply chain GHG and water goals and sector-first SASB disclosure in our 2016 Sustainability Report, we are not standing still.
Sustainability in the retail and wholesale electricity sectors is important and challenging work – with enormous potential positive impact. I’m proud to work alongside some of the most dedicated and talented individuals in corporate America who are doing meaningful and impactful work to make their companies’ operations, supply chains, products and workplaces more sustainable.
The future is both exciting and uncertain. We know many things will change between now and 2030, let alone 2050.
Along the way, you can count on NRG to stay true to our sustainability commitments and to remain transparent about our progress.
As NRG implements our transformation plan and gains strength and flexibility from a more streamlined structure and a significantly lower debt posture, we will be able to implement an updated plan to continue forward on our path to a lower-carbon future.
Originally published on TriplePundit