Question

Strategy Spotlight 2.2 discusses the growing importance of environmental concerns and illustrates how companies in different industries deal with plastic waste issues. Many other environmental problems such as greenhouse gas emissions and the resulting climate change issues are major concerns for today’s businesses and governments. Pick an industry with high greenhouse gas emissions such as electric utilities, air transportation, or livestock agriculture and identify the threats and opportunities facing the industries. Do you think companies with substantial greenhouse gas emissions should proactively address their environmental impact?

Answer 1

Electric utilities are an example of an industry with high greenhouse gas emissions. For a greater part of the last century and until recently the energy mix for power generation has been issued towards non renewable sources of energy for or use in power generation. Thus electric utilities are highly dependent on such sources called hydrocarbon based fuels for generation of power. Coal, Natural Gas, Nuclear Energy are some primary hydrocarbon baaed non renewable sources of energy. With all SD primary and bulk fuel for thermal power generation, the Sulphur Dioxide (SOX) and Nitrous Oxide (NOX) based emissions along with residual fly ash have contributed immensely to the generation of greenhouse gases with consequent environmental impact. While natural gas and nuclear fuel do not have such a high degree of immediate impact on environment as coal, their long-term impact is also not environment friendly.

Threats with respect to electric utilities industry are:

1. Excessive emissions of SOX and NOX leading to adverse environmental impact emission of greenhouse gases and global warming.

2. Containment of residual from nuclear power plants is a challenge and comes with high cost to ensure safe containment which can directly at to emission of greenhouse gases.

3. Increased resistance to use of such non renewable sources of energy buy environmental groups as well as governments across the world working to reduce dependence on industry reducing power through such sources.

4. High cost of maintenance of electric utilities due to large infrastructure setup and maintenance requirements.

5. Increasingly depleting resources of non renewable sources of energy leading to shortage in supply adding two costs of production causing customer dissatisfaction and reduction in dependence upon non renewable energy source based electric utilities.

6. High cost of set up from clearances for land to sourcing of equipment which is is difficult to manufacture, highly skill intensive and prone to damages.

7. Electric utilities with higher share of energy mix from conventional sources of energy will find it difficult to compete commercially.

Opportunities with respect to electric utilities in the current scenario are:

1. Adoption of renewable sources of energy like solar and wind in their energy mix to reduce dependence on conventional sources based power industry.

2. Incentive for exploration new environment friendly sources as geothermal energy, tidal energy and so on for reducing dependence on conventional sources as well as reducing carbon footprint.

3. Incentive for capacity enhancement through research and development of well established renewable sources of energy like solar energy and wind energy.

4. Tapping of unused space in fallow areas for establishment of wind and solar power plants.

5. Incentive for electric up to promote grid connected rooftop solar photovoltaic systems across commercial and residential buildings to help manage power load.

6. Incentive for electric utilities to improve interconnected power grids with provision for accommodating power feed from renewable sources of energy.

7. Use of advanced materials in development of equipment for harnessing non conventional sources of energy.

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