Image by ESS Inc
Introduction
Coming out of the COVID-19 pandemic, solar energy holds a strong potential to help the world transition to a future of sustainable energy, as more countries and corporates announce their carbon reduction targets. Though these commitments are the first steps in the right direction, there remain subsequent hurdles to be overcome, and that is in our understanding; better-improved disclosure practices coupled with system-wide efficiencies and process improvement through data insights.
One aspect of the disclosure that holds the key to widespread adoption and success is undeniably robust stakeholder engagement and understanding of the long-term benefits of sustainability. This abstract seeks to explore the potential of data technologies and their limitations in improving transparency and disclosure to foster efficiency as we ‘build back better from the effects of the pandemic and beyond.
It is a known fact that sustainability not only seeks to address potential risks but also presents opportunities and one of those opportunities is efficiency. Indeed, through ESG disclosure organizations are more likely to improve their processes to reduce waste and increase profitability in the medium to long term, while also attracting capital.
To tackle this complex symbiosis, we have broken it down into these 6 sections which are noted below;
Social Issues
Circular Manufacturing & Recyclability
Optimization & Product Efficiency
Green Financing
Water Usage
Hazardous Waste Management
Conclusion
Social Issues
Child Labour
This section seeks to look at the entire solar generation and storage value chains and identify major social challenges like the Cobalt issues in the DRC and discuss proactive and innovative solutions to improving the social outcomes of the process by leveraging data technologies. Through this topic, we seek to answer among other issues the artisanal mining challenge, we do that by asking questions like, what it would take to survey the small-scale mining shafts using UAV technology to lower the occupational hazards of artisans? Improving our data insights in this area also helps us access the 12% global output from this rare earth mineral, with resulting improved price performance.
Economic Inclusion
For inclusion we assess the potential for sustainable energy to address some of the social injustices of the past, like can we truly "build back better" and can this energy transition also become a catalyst to improving inclusion for the previously excluded individuals and communities? How can we use technologies like blockchain to improve transparency and disclosure regarding the reporting of these social issues? How can companies leverage forecasting (Satellite Imagery), remote assist (AR), health & safety (Robotics), etc to improve their social targets? What are the critical steps needed to create bankable projects for Island economies and other communities highly affected by the pandemic in order to accelerate the creation of green jobs throughout the value chain? Can we create better supply chains that are localised, more efficient and emit lesser greenhouse gases in the process?
Green Jobs & Reskilling
Economists from the Oxford Martin School and the Smith School of Enterprise and the Environment created a Green Complexity Index (GCI) Mealy commented, “It is much easier for countries to develop competitiveness in products that require similar skills, equipment, and know-how to what they already know how to do. Germany, for example, developed turbine manufacturing off of existing expertise in high precision machining.
What local level demographic data do we need to create robust labour reskilling exercises for short, medium, and long-term interventions across the entire solar and storage sector? As governments and corporates prepare their green industrial strategies and design green stimulus packages, as policymakers search for ways to stimulate their economies amid the current global pandemic, how can we get well-positioned to build robust green jobs data landscapes?
Through these interventions, identifying and investing in countries’ green production capabilities could be a much-needed win-win. This topic seeks to challenge the stakeholders to improve on the shortcomings of the legacy energy industry and provide a more distributes job opportunity strategy.
Circular Manufacturing & Recyclability
Market inefficiencies seem to always prevail in instances when mispricing is never addressed. At Peniel we seek to improve our understanding of the true price of manufacturing solar and storage technologies by incorporating recycling/ or lack thereof. Most importantly, we hope to improve data insights for decision making as far as materials recyclability is concerned, especially considering the 30-year lifespan in question for most hardware? What data is needed to enhance investment decision making and what are the key product efficiencies as a result of that?
Optimization & Efficiency
The investment community is mandated to practice robust stewardship across the entire value chain for both solar and storage technologies. As solar and storage communities we have a mandate to identify pathways to process-wide investor engagement and education including data transparency and disclosure to enhance benchmarking. To truly tackle the energy sustainability question, we need to have adequate policies in place to enable the transition, equally so we need to have efficient data transparency standards that enable informed decision making for all stakeholders.
Manufacturing
Image by 1366 Technologies
True sustainability is synonymous with materials efficiencies in the production process, and reduction of waste which translates to price performance. As a fiduciary the question remains, does the investor have the tools in place to know which manufacturing facilities have the highest input/ output ratio? The industry must develop robust tools that seek to improve transparency and reward innovation?
Project Development
As more energy systems are deployed from grid-level to distributed systems at commercial and industrial scales, the question of efficiency metrics broadly around the forecasting abilities should take centre stage. ESG disclosure practices must provide the tools to better enforce project efficiencies and reward the most efficient project teams? We must look at energy generation efficiencies as impacted by meteorological parameters and the role data technologies can play in improving disclosure and subsequent efficiencies.
Green Finance
We must improve our understanding of the finance landscape and various major stimulus packages from the announcements by governments and multilateral organizations, and how they affect the solar and storage industries’ innovation roadmap. We look at South Korea's $105 billion Green New Deal, US Senate $2.2 trillion, EU 750 billion green packages, EU 1.1 trillion 7 a year climate-friendly budget, EU 1.8 trillion recovery bill, and more. We hope to stimulate the discussion in this regard and project various scenarios that could play out by understanding the innovation landscapes in these markets going into 2030.
Water Usage
Water use transparency and disclosure should potentially improve as more commercial and industrial energy users switch to renewable energy. As a fiduciary, you must be in a position to trace the solar panel installed by your investee company back to its manufacturer in a seamless manner, and maybe blockchain might have the answers we are looking for. It is needless to say that manufacturers that improve their water consumption today have a better chance of remaining competitive in the medium to long term, and thus have a better chance of attracting both investors and project developers.
Hazardous Waste Management
Should lead still be used in solar? Are there realistic alternatives? The global deployment of so much PV is an impressive feat and one that is critical for the renewable energy transition. However, it is essential to consider both future waste volumes, and the materials employed. Can all modules be safely retrieved in all geographies (many of which do not yet have mandatory waste disposal regulations for solar) and, in the best-case scenario, continually reused? Even if the small amounts of such hazardous elements as lead are "harmless" when considered on an individual level, is this still the case when much larger quantities come into play? Are there non-toxic alternatives?
Conclusion
Our work seeks to develop pathways to greater transparency and disclosure in a stepwise manner. The overall objective of improved disclosure is enhanced efficiency resulting in improvements in sustainability. Our guiding framework is the ESG standards for sustainability by SASB. We primarily advocate for a data-first approach and landscape, which we hope can accelerate innovation and efficiency and further bring about the much-needed price performance and widespread adoption. We also hope to improve the science and process improvement literacy for the investors and we believe data technology holds great potential in that regard. “We measure and then improve”
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