Net-zero Survey: Utilities Racing to Decarbonize

Water and wastewater utilities are executing ambitious decarbonization goals, illustrated in a recent survey of 100 utilities showing that 75% of respondents intend to achieve greenhouse gas (GHG) reduction goals by 2040 or earlier. 

To track progress toward Net Zero, in late 2022, Xylem commissioned a survey of utilities across North America and Europe. We spoke with Austin Alexander, Vice President, Sustainability and Social Impact at Xylem, to break down the results and understand how utilities are decarbonizing quickly and affordably.

What was your reaction to the survey results? How do you think sentiment towards decarbonization has changed?

I was positively surprised by how many of the utilities surveyed have GHG commitments on their horizon. We found that even those that do not have a target today saw developing a roadmap as something they need to address.

To give a sense of what we found, of the 100 utilities that responded to the survey:

• 48% had a net zero emissions goal
• 42% had an emissions reduction goal,
• 11% did not have a GHG goal, but nearly half of these were hoping to implement one in the next five years.

The data shows how far the water industry has come. If you conducted the same survey five years ago, hardly any utilities spoke about decarbonization at the same level.

We are starting to hear a much more nuanced conversation about combining operational efficiencies with environmental efforts. 

If you think ahead by five years, GHG emissions will be measured as a standard part of operational key performance indicators. That is real progress.

What do you think is driving this change?

At the heart of the change of sentiment is the link between decarbonization and operational efficiency. We have plenty of evidence, from utilities of all sizes, of GHG reduction approaches that resulted in cost savings, energy production upsides, and more resilient operations. We discussed some of these in detail in our paper Net Zero – The Race We All Win. 

While every utility will have slightly different drivers, a changing regulatory environment is increasing pressure on the sector to pick up the pace. National and international bodies are paying more attention to decarbonization efforts, which is positive.

The water sector has been one of the first hit by extreme weather, be that scarcity or storm events. Most utilities list climate change among their top three challenges. They are feeling the impact. Key stakeholders, such as municipal governments and local communities, can see the effect of climate change on clean drinking water and sanitation.

Public utilities are acutely aware they need to justify any capital expenditure investment or operational costs to a broad group of stakeholders. Showing benefits beyond climate mitigation is necessary for any investment.

It must impact other areas such as reducing operational expenditure, improving asset management, helping meet regulatory requirements, and providing services without disruption. It also must be cost-effective and affordable.

This is something we pay attention to as we develop products. For instance, we look at digital solutions to make assets more efficient and to avoid or streamline the large capital projects that historically would have been the principal way to solve a problem.

A clear message from the survey was that utilities see reducing energy emissions as a top priority. Does this give you hope that the sector can see some profound results quickly? 

When asked to rank the biggest climate challenges, all respondents, perhaps unsurprisingly, ranked water quality and water scarcity among their top two. Among large utilities, the third most important challenge was addressing energy emissions. While process emissions (methane and nitrous oxide) make up the majority of GHG emissions for the utility sector, particularly wastewater, they tended to rank close to last among all sized utilities.

It was promising to see a focus on addressing energy emissions among utilities’ top priorities.

There is technology readily available to dramatically reduce energy-related emissions. Often, these also solve many other water challenges.

If you are running a utility operation, you can get real-time feedback on how effective your efforts are in both savings and GHG emissions. There is a great opportunity to use the infrastructure you already have in a better way with a relatively small digital investment or an assessment.

It is the same way we think about it at Xylem with our net-zero commitment. The first thing we targeted was our energy consumption, everything from vehicles to power usage. Those things are tangible and generally in your control. We could make quick improvements that have immediate benefits.

When the respondents were asked about five broad solution categories – renewables, electrification, energy efficiency and optimization, water conservation, and advanced wastewater treatment – 75% of respondents said they are considering solutions in at least three of these areas.

In Europe, digital is fast becoming a priority, with 29% looking into advanced metering infrastructure (AMI) and leak detection solutions, and 24% turning to treatment system optimization technologies to advance GHG reduction plans. Similarly in North America, 35% of respondents plan on implementing plant or asset optimization technologies to advance their decarbonization goals.

On the flip side of that, fugitive and process emissions remain low on the list of priorities. How big an issue is this? 

Knowledge is growing quickly, and research such as the recent GWI paper is adding to our education on process emissions and gases such as methane and nitrous oxide. Utility operators have a lot on their plate, so when it comes to process emissions the industry needs clear, data-driven approaches that don’t necessarily mean major capital expenditure. Technology in the area is still maturing, but we have seen rapid advancements that will make a real difference. 

We will see efforts in this area gain momentum, particularly as more utilities can harness some of these emissions, such as biogas, to produce onsite energy. This will make solutions much more attractive to utilities.

Read more about the strategies water utilities can take to hit net-zero targets in Xylem’s latest paper - Net Zero: The Race We All Win.