Energy Impact Report: Electricity Edition, Q1 2025

Scope 3 Emissions and Trade Policy Navigation Transform Refining Operations

This in-depth analysis examines how electricity companies are significantly increasing investments in modernising power grids, with Enel announcing plans to spend €18.6 billion on improving grid quality, resilience, and digitisation by the end of 2026. This research reveals that annual investment in grids must rise from USD 300 billion in 2023 to over USD 600 billion by 2030 according to the International Energy Agency, focusing on digitising and modernising distribution networks better to integrate variable distributed energy resources (DERs) and address both financial materiality and double materiality considerations across the electricity value chain.

The report additionally reveals how trade restrictions on low-carbon technologies have disrupted emissions reduction initiatives for 58% of refiners creating substantial uncertainties in sustainability investment planning.

Call to Action: Hydrocarbon processing companies should develop regionally diversified production networks and implement flexible decarbonisation strategies that can adapt to trade policy fluctuations ensuring emissions reduction commitments remain achievable despite economic uncertainties.

The report highlights a significant transformation in electricity generation sources, with the IEA forecasting that renewables will become the leading source of electricity generation by 2025, surpassing coal. Additionally, wind is expected to surpass nuclear generation, and solar PV is projected to follow suit in 2026. This rapid transition creates both operational challenges and strategic opportunities, requiring robust materiality assessment processes that consider both immediate system balancing requirements and longer-term infrastructure investment needs throughout electricity markets.

This analysis examines the key challenges in integrating renewable energy sources into existing grids, including the variability and intermittency of wind and solar generation, limitations associated with ageing infrastructure, and regulatory hurdles that may not align with the rapid deployment of new technologies. Companies implementing comprehensive grid modernisation strategies are demonstrating an enhanced awareness of ESG considerations while addressing growing expectations from investors, regulators, and customers for resilient, low-carbon electricity systems.

The report examines strategic approaches to grid modernisation, including investments in transmission and distribution networks, the deployment of innovative grid technologies, energy storage solutions, regulatory reforms, and enhanced grid flexibility. According to BloombergNEF, achieving global net-zero emissions will require a $21 trillion investment in power grids by 2050, including $4.1 trillion to maintain existing infrastructure and $17.4 trillion for expansion to accommodate new electricity consumption and production patterns throughout evolving value chains.

Looking toward future electricity landscapes, the report identifies how integrated solutions combining AI-driven smart grid technologies, distributed energy resource management, and enhanced cybersecurity measures are transforming utility approaches to sustainability and climate resilience. Companies implementing comprehensive digital strategies aligned with the Sustainable Development Goals (SDGs) for clean energy and climate action are demonstrating enhanced preparedness for evolving customer expectations, physical climate risks, and regulatory requirements under frameworks such as the Corporate Social Responsibility Due Diligence (CSRD).