The Path to Drawdown: Grid Expansion
Solving climate change and remaining below 1.5ºC of global temperature increase requires a massive scaling of emissions-free energy sources. And thankfully, renewable sources like solar and wind are quickly expanding their capacity worldwide. But reliably providing renewable energy to every household and organization in the world demands a power grid that’s much bigger and more flexible.
The power grid is the dynamic network of electricity generation, transmission, consumption and storage that 85% of the world relies on. But its initial design for constant, centralized power production is not conducive to the intermittency of wind and solar power. For the world’s electricity supply to become completely renewable, the power grid needs to become more adaptable than it is today. Many technologies -- constant renewables like geothermal and nuclear, utility-scale energy storage systems, batteries, and smart appliances -- advance grid flexibility.
The power grid also needs to expand to support a renewable transition. Where the grid spans larger geographies and more electricity sources, it can smooth out the total output and variability of renewables. Electricity generated in Texas during the summer can then be used to power houses in snowy Chicago during the winter. To achieve this scale, the IEA estimates that, between 2020 and 2030, around 16 million km of distribution and transmission lines need to be built, an increase of 80% compared with the past decade.
nVent Electric plc (stock ticker: NVT) provides electrical connection and protection solutions. They design, manufacture, market, install and service enclosures, electrical fastening solutions and thermal management solutions for the commercial and residential, industrial, infrastructure, and energy sectors. Headquartered in London, UK, they own manufacturing and distribution facilities throughout the world.
NVT's Role in Drawdown
All three of nVent’s business segments - Enclosures, Electrical & Fastening Solutions, and Thermal Management - offers products and services that contribute to the smart grid.
Their Enclosures business provides solutions to connect and protect critical electronics, communication, control and power equipment.
Solutions by their Electrical & Fastening Solutions segment includes spring steel and specialty metal fixings and reinforced steel connections for electricians, telecoms installers and roof top contractors. It also offers bonding, grounding, lightning protection and low voltage power distribution products and solutions for applications in telecoms, power distribution and facility electrical protection.
Finally, their Thermal Management segment provides electric thermal solutions that connect and protect critical buildings, infrastructure, industrial processes and people. For industrial and energy customers, it sells industrial heat-tracing and wiring, control and monitoring, sensing, engineering and construction services.
These segments account for 47.7%, 28.5%, and 23.9% of nVent’s total revenue, respectively.
NVT: What We Like
nVent is taking steps to improve their environmental sustainability and reduce their carbon footprint. In 2020 and 2021, they:
- reduced CO2 emissions by more than 10,000 metric tons in 2020 (p. 22), equivalent to 2,175 passenger cars being taken off the road for one year
- Entered into a green energy contract that adds 30 GWh of renewable energy to their Anoka, Minnesota site, increasing the company’s renewable energy use by 10% and helping avoid 18,000 metric tons of CO2 annually.
- reduced their waste by 3,900 metric tons (p. 21) between 2019-2020, and 95% of their 2020 waste was diverted from landfills through their reduction, reuse and recycling efforts.
Beyond this track record, nVent has set a couple of sustainability targets for the year 2030:
- To achieve 25% reduction in scope 1 and 2 GHG emissions
- To reach 20% renewable energy consumption
We’re encouraged by these forward-looking strategies.