A solar farm atop the water which is used by the energy industry.

The energy industry is challenged with transforming its operations to assist with the transition to a low-carbon future.

Being a principal contributor to climate change means the energy industries sustainability has an important part to play towards achieving the ambitious targets set by the Paris Agreement and the United Nations Sustainable Development Goals (SDGs) when creating an energy-secured future. In the United Kingdom and internationally, the energy industries strategies and investments are being influenced by the need for decarbonisation, renewable energy expansion and energy efficiency improvements. These shifts are in response to regulatory pressure, as well as being driven by technological advancements, changing consumer preferences and the economic imperative to anticipate and mitigate the risks associated with climate change.


The State of Sustainability in the Energy Industry in 2024

Global climate goals and a heightened awareness of the urgent need for environmental preservation and carbon reduction have created significant shifts within the industry such as moving towards renewable energy sources, enhanced energy efficiency and innovative approaches to decarbonisation.

The Paris Agreement and the United Nations SDGs have set ambitious targets for reducing greenhouse gas emissions and promoting sustainable development. Being central to these objectives means the energy industry is witnessing large changes to its operational and investment priorities. Governments and businesses are now committed to strategies that align with a pathway to limit global warming to well below 2 degrees Celsius above pre-industrial levels, aiming for a more ambitious 1.5 degrees Celsius target.

Renewable sources such as wind, solar and hydro have become increasingly prominent, reflecting a global consensus on the need to phase out fossil fuel dependency. Energy efficiency measures and the adoption of smart-grid technologies are also being prioritised as key strategies for reducing energy consumption and managing demand more effectively.

On the one hand there has been a significant increase in the investment and deployment of renewable energy technologies, driven by declining costs, technological advancements and supportive policy frameworks. The integration of renewables into national grids is transforming energy systems, making them cleaner and more resilient.

However, the transition away from fossil fuels towards a fully sustainable energy system is not without its hurdles. Infrastructure and technological limitations, financing gaps an regulatory and policy uncertainties continue to pose challenges to the rapid scale-up of clean energy solutions. Additionally, the need to ensure energy security, affordability and accessibility remains a critical concern, particularly in regions where energy demand is growing rapidly or where access to energy remains limited.

The energy industries response to these challenges will be crucial in determining the pace and effectiveness of the global transition to sustainable energy.


Key Sustainability Trends in the Energy Industry

Renewable Energy Expansion

Renewables and nuclear energy will dominate the growth of global electricity supply over the next three years, together meeting on average more than 90% of the additional demand.¹

The expansion of renewable energy is crucial for reducing carbon emissions and mitigating climate change. It also diversifies energy supplies, enhancing energy security while stimulating economic development in new and emerging markets.

Energy Efficiency and Smart Technologies

Digitalisation can save the power industry around £63.5 billion per year, or 5% of total annual power generating costs.²

These advancements contribute to reducing the energy industries carbon footprint and also empowering consumers, offering them greater control over their energy usage and promoting conservation behaviours.

Electrification and Decarbonisation

In the European Union, the energy sector was responsible for 77.63% of greenhouse gas emissions in 2019.³

Electrification and decarbonisation are key to reducing greenhouse gas emissions within the energy industry but across the economy. These trends are essential for achieving net-zero emissions targets and for the transition to sustainable energy consumption patterns.


Challenges with Energy Industry Sustainability

The path to sustainability has challenges that range from technological, financial regulatory and social dimensions. Addressing these challenges is critical in contributing to global sustainability and climate goals.

While renewable energy technologies have advanced significantly, there remain technological and infrastructural barriers to their widespread adoption. Issues such as energy storage, grid integration of variable renewable sources and the development of low-carbon technologies for industrial processes poses significant challenges. Overcoming these technological and infrastructure barriers is essential for ensuring the reliability and resilience of energy systems, facilitating the transition away from fossil fuels and achieving deep decarbonisation across the economy.

The energy industry operates within a complex regulatory environment that can either facilitate or hinder the transition to sustainability and policy uncertainties including changes in government priorities, regulatory frameworks and support mechanisms for renewable energy can create risks for investments and slow down the pace of change. Clear, consistent and supportive regulatory and policy frameworks are crucial for providing the certainty needed to simulate investments in sustainable technologies and infrastructure. Addressing policy uncertainties can accelerate the energy transition and ensure alignment with long-term sustainability goals.

Mobilising the necessary financial resources to support the energy transition remains a formidable challenge and the scale of investment required to transform energy systems, develop and deploy renewable energy sources and enhance energy efficiency is immense. Financing challenges are particularly acute in developing countries where access to capital is often limited. Developing innovative financing mechanisms and leveraging public-private partnerships are essential for bridging the investment gap in sustainable energy projects. Ensuring access to affordable financing can drive the global energy transition and support equitable access to clean energy.

Achieving a balance between energy security, affordability and sustainability is a persistent challenge and ensuring a stable and reliable energy supply, while transitioning to renewable energy sources and maintaining affordable energy prices for consumers requires careful planning and coordination. Strategies that address energy security, affordability and sustainability are crucial to maintaining public support for the energy transition and ensuring that the benefits of sustainable energy are widely shared.


Opportunities and Strategies for Energy Industry Sustainability

The energy industries journey towards sustainability presents challenges and also significant opportunities for innovation, growth and leadership in the global transition to a low-carbon economy. By adopting forward-thinking strategies and capitalising on emerging opportunities, the industry can enhance its contribution to environmental preservation, economic development and social well-being.

Leveraging Innovation and Research & Development (R&D)

Strategy: Accelerate investment in innovation and R&D to develop new sustainable energy technologies and improve existing ones. This includes advancing renewable energy technologies, enhancing energy storage solutions and exploring next-generation options such as hydrogen energy and carbon capture and storage (CCS).

Opportunity: Innovation in energy technologies is key to reducing costs, improving efficiency and increasing the scalability of sustainable energy solutions. It opens new avenues for clean energy generation and consumption, driving the industries transition to sustainability.

Strengthening Policy Support and Regulatory Frameworks

Strategy: Advocate for and support the development of robust policy frameworks and regulations that incentivise sustainable energy practices. This involves promoting policies that support renewable energy deployment, energy efficiency measures and the decarbonisation of all industries of the economy.

Opportunity: Strong policy and regulatory support can provide the clarity and stability needed for long-term investments in sustainable energy. It can also level the playing field for renewable energy and ensure that the external costs of fossil fuels are adequately accounted for, facilitating a fair and efficient transition to clean energy sources.

Enhancing Grid Infrastructure and Integration

Strategy: Invest in upgrading and expanding grid infrastructure to accommodate the increasing share of renewable energy and to enhance grid flexibility and resilience. This includes the development of smart grid technologies and the integration of energy storage systems to manage the variability of renewable energy sources.

Opportunity: Modernising grid infrastructure is essential for maximising the potential of renewable energy and ensuring reliable and secure energy supply. It enables the efficient distribution of clean energy and supports the integration of decentralised energy resources, contributing to a more resilient and sustainable energy system.

Fostering Collaboration and Stakeholder Engagement

Strategy: Promote collaboration across the energy industry and with stakeholders from government, business, academia and civil society to share knowledge, align strategies, and mobilise resources for sustainable energy initiatives. This includes engaging communities in energy transition projects and ensuring equitable access to clean energy.

Opportunity: Collaborative efforts can amplify the impact of sustainability initiatives, leveraging diverse expertise and perspectives to overcome challenges and accelerate progress. Engaging a broad range of stakeholders ensures that the energy transition is inclusive, equitable and responsive to the needs of all segments of society.


Why do Energy Organisations choose McGrady Clarke?

Energy organisations choose McGrady Clarke for our targeted expertise in meeting environmental regulations and improving sustainability. We offer custom sustainability training and net-zero strategies to enhance sustainability, alongside compliance management to help energy organisations meet regulations.

Our services are specifically designed to align with the energy industries needs, ensuring economic benefits while promoting environmental sustainability, making us a preferred partner for organisations aiming to lower their carbon output.



¹ International Energy Agency. (2023). Electricity Market Report 2023. https://iea.blob.core.windows.net/assets/255e9cba-da84-4681-8c1f-458ca1a3d9ca/ElectricityMarketReport2023.pdf. Licensed under Creative Commons Attribution 4.0 International (CC BY 4.0) licence.

² Nazari, Z., & Musilek, P. (2023). Impact of Digital Transformation on the Energy Sector: A Review. Algorithms, 16(4), 211. https://doi.org/10.3390/a16040211. Licensed under CC BY 4.0.

³  Martins, F., Moura, P., & de Almeida, A.T. (2022). The Role of Electrification in the Decarbonization of the Energy Sector in Portugal. Energies, 15(5), 1759. https://doi.org/10.3390/en15051759. Licensed under CC BY 4.0.