Tag Archives: Renewable Energy

The energy and utilities industry is in the midst of change.

Businesses are facing pressure from the government and consumers alike for more renewable energy while also balancing that with grid reliability and traditional energy sources. Meanwhile, electricity demands are expected to skyrocket. Other wild cards are supply chain disruption, labor shortages and more.

But within those challenges, we always see opportunities. Let’s take a closer look into the outlook for energy.

Continued focus on renewables. The demand for clean energy will continue to rise. Governmental regulations are mandating the focus on clean energy and decarbonization, including enacting green-friendly legislation and incentives for companies to transition to cleaner sources like solar and wind. The industry made great strides in solar power and the energy storage it necessitates in 2023, but more is needed and the focus will continue in 2024 and beyond. Consumers are demanding it as well, with climate change among people’s top concerns. All of it has led many companies to push the timeline to cut carbon emissions by 80% from 2050 up to 2030.

Energy storage. The push for solar requires an enormous amount of battery storage capacity to, in very simple terms, store all of that energy for times when the sun’s not shining. It means innovation in battery technology, and 2023 saw much of that, with storage capability doubling in 2023 and set to nearly double again in 2024.

Electricity surge. According to industry sources, the demand for electricity is expected to triple by 2050. It means planning now for this increased load on what is likely aging infrastructure, resulting in costs to shore up that infrastructure to ensure grid reliability. It’s also necessary to consider expanding the grid to meet that demand.

Aging grids + extreme climate.  We all saw the worst-case scenario play out in Texas when their grid failed when the state experienced a rare deep freeze. But weather extremes are becoming the norm, with heat, wildfires and drought on the one hand, floods and record snowfall on the other. The industry is modernizing the grid, and made progress in that area in 2023, but reliability is still a large concern.

Supply chain uncertainty. The recent geopolitical unrest in Ukraine and the Middle East has underscored the need to reshore this nation’s oil supply.

Labor shortages. Like many industries today, energy is battling a labor shortage and facing the double whammy of their most experienced workers retiring and taking institutional knowledge with them, and having too few younger people in the pipeline to pick up where they left off.

It’s a full plate for the energy sector in the coming years, that’s clear. But within these challenges, we see opportunities to bolster processes, making operations more efficient and guard against supply chain snafus. Reducing operating costs, improving productivity and increasing efficiency will help the industry navigate these challenging times.

This is where USC can help

Management Operating Systems. A solid Management Operating System is a must for efficiency, time savings, employee productivity and so much more. For a real-world example on how USC helped an energy producer save time and money by implementing an MOS, read “Energy Producer Generates Savings with Smarter Labor Practices.”

Reskilling employees. All of this innovation and growth in renewables, not to mention AI entering the mix, requires more workers with new skills. This can be very good news for your current employees, who can move up the food chain with new training, and the ability to attract highly qualified workers.

Resource planning. If you know anything about our company, you know we are great proponents of SIOP – Supply, Inventory and Operations Planning. It gives companies a roadmap to the future, so they’re not reacting to events, they’re anticipating them. With the exponential growth of the energy and utilities sector in the coming years, solid planning for the resources needed for that growth, like increased storage capacity and grid strength, is a must.

Bottom line, delivering reliable, affordable and sustainable energy is the goal for the energy and utility industry. It takes efficient operations, a handle on resources, and a clear eye toward the future. Contact us today to find out more about how USC Consulting Group can help.

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From supply chain disruptions to fluctuating demand, the past few years have caused a ripple-like wave of challenges throughout businesses across the globe, including the oil and gas industry.

Fortunately, with oil prices bouncing back, the oil and gas industry has nearly recovered from the issues to pre-COVID operations. That being said, there are a considerable number of concerns on the forefront of the industry that will shape the course of operations for years to come.

So, what’s the state of the oil and gas industry today? Let’s look at some of the issues and opportunities they’re facing.

Production capacity concerns

For months, we’ve been seeing news reports about the Russia and Ukraine conflict. Many of us have been seeking updates on the conflict itself, but those in the oil and gas industry have no doubt kept a keen eye on how it is affecting the global oil and gas market.

The sanctions placed on Russian oil have caused strain on a U.S. refinery system that, like so many manufacturing industries, was already overwhelmed and under-staffed following the COVID pandemic and the Great Resignation that followed. Demand for gas plummeted during a time when the majority of the country stayed in their homes for months on end, which left a large number of refineries with no other choice but to close their doors.

Refinery numbers still have not yet rebounded, which has resulted in a refining shortage of roughly one million barrels of oil a day compared to pre-COVID numbers. Add in sanctioning one of the world’s biggest oil producers, and the increased demand coupled with reduced refining capabilities combines into the perfect storm for shortages and increased prices.

Mergers & acquisitions opportunities

Despite the recently tabled climate bill, this country (and the world at large) is moving toward a renewable energy future. Even if it’s at a snail’s pace.

This has caused leaders in the oil and gas industry to evaluate operations and find ways to meet renewable and decarbonization efforts in the next few decades. One option is partnering with or purchasing renewable energy companies.

Companies like BP, Equinor, Respol, and PKN Orlen are leading the charge in renewable energy investment opportunities, and are reaping the financial and ecological rewards of doing so. Expect many major players in the oil and gas industry to continue to expand their portfolios and increase their outreach with strategic mergers and acquisitions into renewable energy.

Appeasement of investors

Despite incredible year-over-year growth, the oil and gas industry as a whole has been plagued with cash flow issues that have caused investors to reconsider their financial plans.

There are a host of reasons why investors have turned their focus toward other industries in recent years: Some have been leaving due to increased concerns over carbon-mitigation and ecological issues, some have left due to oil and gas’s tendency to overspend cash flows in the name of company growth and continued investment, while others have been scared away due to plain uncertainty.

Whatever the case may be, oil and gas companies are seeking to attract investors again, while investors want to see predictability and consistent returns to shareholders. The aforementioned increase in renewable mergers and acquisitions opportunities is a step in the right direction for the oil and gas industry, and that coupled with an inevitable stabilization will no doubt cause investors to flock back to the industry.

Outdated infrastructure & opportunity for innovation

Across the board, oil and gas infrastructure is aging.

In the off-shore sector, oil platforms are becoming old, deteriorated and increasingly at-risk for operational failures and natural disasters. This, of course, poses a problem not only for oil and gas companies meeting the ever-growing demand of the marketplace, but also risks ecological disaster in the form of oil spills and other malfunctions. Equipment and structural deterioration is no doubt due to saltwater and other environmental factors that come with operating in the ocean, and improvements to such facilities come at great expense, leaving some executives to employ a “we’ll-fix-it-when-it’s-broken” approach.

On land, plants and refineries across the country are aging, too, with many having outdated control loops, absences of updating engineering controls, and lack of complete computerization. This, of course, doesn’t even touch on the efficiency potential that technological aspects like robotic automation, artificial intelligence and IoT advances could bring to these facilities.

We can help

No matter the challenges, issues or opportunities facing the oil and gas industry, one solution is getting the job done more efficiently. That means looking at supply issues in new ways, casting an eye toward structural improvements and ensuring your day-to-day efficiency in the refineries and out in the field. We can help with that. At USC Consulting, we’ve been working with companies in a wide range of industries to up their efficiency game for more than 50 years.

Contact us today if you’d like to talk about how we can help your business.

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The desire for a cleaner planet is an impulse that virtually everyone shares. The question is how to go about that. Based on two recent polls from Gallup, approximately 60% of respondents say they would like to see the country rely less on fossil fuel for energy usage over the next 10 to 20 years and nearly two-thirds say they prioritize the environment’s ongoing health more so than the U.S. economy’s (30%).

Recognizing their customers’ priorities — not to mention their own personal desires to be better stewards of the world’s natural resources — business owners are going to greater lengths to reduce their carbon footprint. Whether it’s eliminating single-use bottles or encouraging shoppers to bring their own bags, small efforts such as these serve as effective strategies that pay dividends.

But one thing that can’t be eliminated entirely is energy production. From what keeps the lights on in homes and facilities to maintaining comfortable temperatures during scorching summers and frigid winters, life as we know it would grind to a halt without electricity. Even though many Americans would like to see fossil fuels used less often, the vast majority of the country’s energy output derives from oil, natural gas and coal, according to the National Academy of Sciences.

The scientific community largely agrees: The best way to reduce such reliance is by increasing investments in renewable energy, like wind, solar, geothermal and hydroelectric. By just about every measure, natural resources such as these are significantly more efficient than legacy sources like coal, natural gas and oil. In other words, it requires less effort and overall output, on an apples-to-apples basis, to yield maximum productivity.

It raises an interesting question, however: Which energy source is the most efficient of them all? In other words, which one gets you the most power delivery for your investment dollar? As is so often the case, the answer is somewhat muddy.

Fossil fuels weak in efficiency

What is clear is fossil fuels tend to be the least efficient, from a standpoint of energy and monetary expenditure and resulting overall output. There are several studies and polls that demonstrate this, including those done at the worldwide level. For example, according to the American Council for an Energy-Efficient Economy, Germany leads the world in energy efficiency, which in 2019, saw renewables accounting for 40% of the country’s electricity production, according to Reuters, overtaking coal. Germany is hoping that by 2030, approximately two-thirds of its energy will derive from sources like wind and solar.

Tied with Germany, receiving 75.5 points out of a possible 100, was Italy, followed by France (73.5), the U.K. (73), and Japan (67). The U.S. finished within the top 10, but near the bottom at No. 8 in energy efficiency.

Steve Nadel, executive director at ACEEE, said every country in the world would benefit from investing more in renewable energy.

“These policies will reduce dependence on energy imports, create jobs, cut pollution, and save people and businesses money,” Nadel explained.

EIA: Half of world’s power to come from renewables by 2050

Although the U.S. isn’t in the top-five for energy efficiency, this isn’t to say the country hasn’t made some serious headway in this regard. Aside from being a net exporter of energy — particularly natural gas — the nation is spending a significant amount on renewables. For instance, according to the most recent figures available from the Energy Information Administration, construction costs for solar photovoltaic systems averaged $2,343 per kilowatt in 2017 and roughly $1,647 for onshore wind turbines. EIA believes that these kinds of investments put renewables on the path to providing close to 50% of the world’s electricity production by 2050. The total currently stands at 28%, when combining hydropower, wind, and solar technologies. That’s up from just 10% in 1990 and roughly 13% in 2000.

That solar, hydropower and wind are often combined when it comes to assessing their output suggests that they’re equally efficient. However, some studies suggest that wind is the best, even though it’s not the least expensive form of electricity to produce and is inherently intermittent.

Based on calculations conducted by energy analysis and enterprise management  company Energy Points, wind retains an estimated 1,164% of its energy when converted into fuel for electrical usage, The Wall Street Journal reported. That compares to geothermal at 514%, hydroelectric in a distant third at 317%, nuclear at 290% and solar at 207%. The least efficient were natural gas (38%), oil (31%)  and coal (29%).

While this study suggests wind is far and away the best when it comes to bang for your buck, others say it’s not so clear cut. Michael Webber, deputy director of the Energy Institute at the University of Texas, told the Houston Chronicle the answer is largely dependent on what resources you’re using and from where you’re operating

“What is more affordable depends on where you are,” Webber explained.

He added that in addition to energy expenditure, there’s also the matter of how much labor that’s devoted to it, not to mention land and capital. Webber also cited a variable known as capacity factor, which assesses how much energy a facility or system produces at any given time. While a nuclear power plant is typically in operation 24 hours a day, seven days a week, wind turbines and solar panels are more intermittent.

Understanding energy efficiency varies

Furthermore, definitions of “efficient” can run the gamut. While one business or government may consider a power source efficient in the classic sense — maximum production through minimal effort — others may look at efficiency from a standpoint of pollution control. For example, Energy Points says hydroelectricity has the lowest carbon footprint of all electricity sources, averaging 4 grams of carbon dioxide for every kilowatt hour. Others, still, may not take issue with one renewable energy source being more efficient than another, so long as it pays for itself in terms of output and the capital spent for development.

Whether you’re in the energy industry or simply want to save on operational and utility expenses, USC Consulting Group can provide you with the services you need to become leaner and cleaner.  Please contact us today to learn how we can make process improvements a reality.

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Sustainability ranks among the most discussed concepts of the past decade — and for good reason. Everyone from the blue-collar breadwinner to the high-powered executive is grappling with going green. Their respective decisions regarding sustainability carry immense weight within the global marketplace, where demand drives operational decision-making. Businesses within numerous sectors are feeling the effects of sustainability’s emergence in consumer and enterprise circles as a consequence. Chemical industry companies are among the organizations most susceptible to this development. Why? Many depend on industrial niches that produce products at risk for reduced usage or outright elimination due to the onward march of sustainability initiatives. Approximately 60% of all ethylene, the most widely manufactured organic compound in the world, per the American Chemical Society, goes toward the creation of polyethylene, the substance used to create sustainability’s mortal enemy: plastic. Petrochemicals essential to the production of petroleum face similar fates, as both businesses and consumers turn away from traditional energy sources and embrace solar and wind power.

These risks necessitate significant action. The chemicals industry should begin adjusting to these developing marketplace conditions and prepare themselves for an immediate future when the plastics and fuels that once characterized material society no longer generate the interest and related revenue they once did.

Consumers support sustainable alternatives

While marketplace variables like availability and price still carry immense importance among consumers, another factor has risen to challenge these once-bedrock value propositions: sustainability. Modern consumers are intent on preserving the environment and protecting themselves and their children against manmade ingredients and products they see as harmful. In fact, almost three-quarters would change their shopping habits to reduce their environmental footprints, while more than one-third are willing to spend more on products that deliver on claims of sustainability, according to researchers from Nielsen.

As mentioned above, discontinuing plastic use is at the center of many consumers’ personal sustainability efforts. Hundreds of millions of tons of plastic are manufactured annually, the Association of Plastics Manufacturers discovered. Food packaging manufacturers account for 40% of this material, while building materials makers produce around 20%. Organizations within the automotive, electronic, household materials, and sports and leisure markets are responsible for the rest. The plastics these businesses produce serve a purpose, of course. However, such items are not biodegradable and often find their way into natural environment, where they can do damage to animal and plant life. Additionally, some consumers wonder how plastics and the chemicals with which they are produced affect humans, particularly children. For instance, many have joined the crusade against bisphenols, or BPAs, in recent years due to preliminary medical research that indicates such plastic might cause health issues in children, per the American Academy of Pediatrics.

Consumers are similarly concerned about fossil fuel consumption and its potential impact on the natural world. In fact, more than 60% of Americans believe the widespread release of greenhouse gas is causing climate change, researchers for Yale University and George Mason University recently learned. As a result, support for environmentally friendly energy solutions, including wind and solar power, is growing, per Pew Research Center, which revealed that two-thirds of Americans support the expansion of sustainable alternatives to fossil fuel and coal. Many are taking action personally to de-emphasize fossil fuel by purchasing hybrid electrical vehicles, which have experienced significant sales growth since the early 2000s, according to the U.S. Department of Energy.

Businesses follow the money

With large numbers of consumers embracing sustainability, enterprises have no choice but to follow suit. More than three-quarters of consumers expect businesses to develop and deploy corporate sustainability initiatives, according to analysis from Nielsen. Even buyers from older generations — 65% of the silent generation and 72% of baby boomers, specifically — are on board with such programs.

This is why an estimated 82% of S&P 500 companies have corporate sustainability initiatives in place, per the Governance and Accountability Institute. These internal initiatives encompass a whole host of functions, including everything from back-office paper reduction to the use of biodegradable packaging. Some organizations have gone even further than this. For instance, Google, which operates numerous data centers and offices across the globe, pledged to swap all of its traditional energy sources for renewable alternatives back in 2010. The technology giant accomplished this goal in 2017. Facebook embarked on the same quest in 2013 and is expected to complete the transition to 100% renewable energy by 2020. Even oil companies are embracing sustainability due to pressure from environmentally geared investors, The Houston Chronicle reported.

Chemical companies take action

These developments have chemical companies searching for new operational strategies that will keep them solvent as consumer and enterprise attitudes toward nonsustainable materials grow more negative. How can such organizations survive without plastics and petrol? While there is no all-encompassing antidote, innovative players within the space are nearing long-term solutions by focusing on process improvement and change management.

Reporters for Bloomberg recently covered the emergence of industrial plastic recycling and the chemical industry’s role in its development. Approximately 60 chemical firms are working together to perfect a reuse workflow that allows shop floor teams to break down used plastic components — old food containers, for example — and reintroduce their molecular remnants into production processes. This closed circular strategy would not only reduce the volume of plastic material threatening the environment but also lend chemical companies invested in the production of the material new life. This is the kind of transformative process change businesses within the industry should pursue to ensure they remain viable after sustainability has transitioned from trend to status quo.

Chemical companies embarking on process improvements to address the emergence of sustainability could encounter trouble when pursuing such enhancements alone. Few operational stakeholders and executives have the bandwidth necessary to manage chemical manufacturing operations within an immensely competitive marketplace while also seeking out and implementing shop floor improvements. Fortunately, there is an effective solution to the time-management conundrum: partnering with a tried-and-true industrial consultancy like USC Consulting Group. We have been helping companies of every size, in virtually every sector, optimize their operations for decades, leveraging proven techniques and tools that ease change management and lay the foundation for growth.

Contact us today to learn more about our work.

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