New-found power: the growth of renewable energy in industrial sectors

The past couple of years have seen a notable increase in the conversation around renewable energy, helped by a succession of eye-catching headlines such as thisthis and this. And there is little doubt we will see that conversation increase in the coming years, along with further rises in the uptake and expansion of the sector.

In the industrial sector this industry-driven focus on renewable energy is strong and it’s easy to understand why. According to the United Nations Industrial Development Organization, the manufacturing industry accounts for about one third of total energy use worldwide. Of this, three quarters is dedicated to producing energy-intensive commodities, such as chemicals, petrochemicals and pulp and paper.

Voluntary procurement represented 52 percent of utility-scale solar projects in development and 73 percent of projects announced in the first half of 2018.

In Deloitte’s 2019 Renewable Energy Outlook, the paper’s author, Marlene Motyka, says three enabling trends are bolstering the fundamentals behind the growth of the renewable energy sector: changing government policies, expanding investor interest and advancing technologies. This market-driven demand (particularly from utilities) is one of the more interesting aspects, as Motkya notes: “Utilities demonstrated strong “voluntary demand,” as opposed to the demand driven by policy mandates we’ve seen in the past,” she said.


In the manufacturing industry, the move to cleaner energy continues to gain traction. Organizations such as the Clean Energy Manufacturing Initiative run by the U.S. government’s Department of Energy (DoE) are making it their mission to help industries shift to more energy-efficient operations and it’s easy to see why. Turning raw materials into finished goods is an expensive and energy-intensive process. Heating raw materials, powering heavy equipment, and maintaining large production facilities requires a huge amount of power, so it makes sense to look at other ways of doing this, for ecological, economic and practical reasons.

One of the most high profile examples of a how a manufacturing plant might harness renewable energy sources is Tesla’s Gigafactory in the United States, which is currently under construction. Once complete, this huge development will eventually be the largest building in the world and the first large-scale battery factory to run on 100% renewable energy. A similarly ambitious plant is also taking shape over in Germany, where industrial giant ABB presented its first CO2-neutral factory earlier in 2019. The solar power infrastructure being developed to feed this factory will measure 3500 sq. m. and will be installed over car parks at the company’s premises.


It’s not only the manufacturing sector where industries are looking to make a move to alternative energies. For example in the construction sector, Volvo CE and its customer Skanska completed a ground-breaking study to create the world’s first ‘emission-free’ quarry. At the so-called Electric Site, each transport stage in the quarry was electrified with only a fraction of diesel-powered equipment in use on the site, which produces around 6,000 tons of material a day. The results from the study have captured the industry’s attention, with a 70% reduction in energy costs and a huge 98% reduction in carbon emissions.

With building and construction accounting for 39% of energy-related CO2 the need to make radical shifts is clear. A range of industry associations, including the World Green Building Council are helping create an industry framework where buildings not only use fewer resources in their development, but across their lifecycle too, and that includes an emphasis on renewable energy use throughout the development and operation of structures.


In the automotive industry, renewable fuels have been a talking point for many years, however not as much attention has been given to the transport sector. Yet it should be: according to the International Renewable Energy Agency, the transport sector accounts for one third of global energy demand and one sixth of greenhouse gas emissions but in 2016 only 4% of the energy used by the sector came from renewables. Now with rapid advances in technology and transitioning consumer sentiment, change is on the way.

A sense of exactly what that change might look like can be seen in Amazon’s $700 million investment in Rivan, a startup car company that plans to build all-electric vehicles, including delivery vans – of which Amazon will take a fleet of 100,000. The first vans will hit the road in 2021. Elsewhere, U.S. company SunLine Transit Agency now has a fleet of 143 buses operating on alternative fuels serving the Coachella Valley in California. These include 123 vehicles running on compressed natural gas (CNG), 16 fuel cell electric buses and four battery electric buses.


The scope for greater energy efficiency and increasing use of renewable energy sources in industrial settings is strong. To see just what can be achieved, take a look at this case study in Vietnam put together by the United Nations Industrial Development Organization. As part of its vision to create an ‘eco industrial park’, the study researched four existing industrial parks in Vietnam and identified 680 sustainability improvements among the 53 resident companies. These included a total avoided annual energy demand of 22 GWh along with 141 Tj of fossil fuel (enough to power 3000 cars). The corresponding annual decrease in CO2 emission was 32 kilotons. Investments from the private sector to bring about the change were €10 million to deliver needed change, but that equated to 2.8 million in annual savings with investments paid off for businesses in just 7 months.

The last point is perhaps the most important of all to note. Not only can a shift to renewable energy and more sustainable operations dramatically reduce emissions levels, but the ROI for the investment required to bring it about continues to fall too.