Energy
Electrical Utilities
Aligning the electricity sector with climate goals
The electricity sector is the largest global source of greenhouse gas (GHG) emissions. Its share of total final energy is expected to exceed 50% by 2050, making it pivotal to the decarbonisation of global energy systems.
- Advanced economies aim to achieve net zero emissions by 2035.
- Emerging economies target net zero emissions by 2040.
Purpose of the Electrical Utility Criteria
The Electrical Utility Criteria establish science-based standards to guide the decarbonisation of the electricity sector.
These Criteria aim to:
- Align the electricity sector with the Paris Agreement goal of limiting global warming to 1.5°C.
- Support the transition away from unabated fossil fuels.
- Accelerate the growth of renewable energy capacity, particularly wind and solar.
The urgency of renewable energy investments
To meet climate goals, renewable electricity generation must grow from:
- 2,600 TWh in 2021 to 3,500 TWh by 2050 (source: International Energy Agency).
At current investment rates, this transition would take 90 years, but the shift needs to happen within 30 years.
The Electrical Utility Criteria aim to accelerate this transformation by guiding utilities toward strategic investments in renewable energy and reducing dependence on fossil fuels.
Mitigation and resilience requirements
The Criteria set standards for both:
- Mitigation: Reducing emissions through renewable energy transitions.
- Adaptation & Resilience: Ensuring infrastructure can withstand and adapt to climate impacts.
These requirements help utilities to:
- Transition their operations to renewable energy sources.
- Build resilient energy infrastructure to adapt to climate challenges.
- Align their financial instruments (e.g., bonds, loans, sustainability-linked debt) with net zero targets.
Supporting a low-carbon energy system
The Electrical Utility Criteria provide a clear roadmap for utilities to align their investments and operations with global climate objectives.
This structured framework ensures utilities:
- Catalyse the transition to a low-carbon energy system.
- Contribute effectively to achieving global net zero goals.
Working group
Resources
Certifications
To see the whole list of Electric Utilities Climate Bonds, visit our Database of Certified Bonds