The gas distribution industry, which owns and operates the systems that deliver energy to homes and businesses for heating and other uses, is a key player in the shift to a low-carbon economy.
To avert the worst impacts and material financial risks of the changing climate, the industry, which delivers about 15% of the energy used in the U.S and accounts for around 14% of the nation’s carbon emissions, must decarbonize.
Just as critically, this transition to reducing emissions and addressing financial risks will unleash strong financial opportunities for the utilities sector and its investors, while continuing to provide consumers and businesses with energy that is reliable and cost competitive.
This report includes key findings that offer a clear roadmap for the industry's transition:
Electrification and efficiency are the most viable strategies for meeting the 1.5°C target. These approaches also often outperform low-carbon fuels and are already cost-competitive against unabated gas distribution.
While renewable natural gas (RNG) and hydrogen-centric pathways have potential benefits, the evidence indicates they lack economic viability at the necessary scale to make substantial contributions toward 1.5°C alignment.
Deep hybrid electrification, which combines heat pumps with existing fuel heating systems and uses heat pumps for most of the heating season, presents an effective interim solution, particularly in regions with harsh winter climates.
Electrification provides compelling growth opportunities for electric-only and dual-fuel service territories. It opens avenues for deploying capital in generation, transmission, distribution, storage, and end appliances.
This investor guide is part of the work of the Ceres' Ambition 2030 initiative, which focuses on six key sectors, including utilities, with the aim of decarbonizing the highest emitting industries by driving greater corporate climate action.