Utilities Are In The Eye Of The Climate Storm. Are They Ready?

WELLFLEET, MA – SEPTEMBER 7: Hurricane Dorian gives a glancing blow to Cape Cod, as high tide in the … [+] early morning brings 5-20 foot waves along Nauset Light Beach in Wellfleet, MA on Sep. 7, 2019. To the millions of us who visit Cape Cod once or twice a summer, the effects of climate change can seem subtle, if we see them at all: A breach in the dunes. A crack in the pavement. But once you know how to see what is shifting, changing and washing away, it is impossible to ignore. (Photo by John Tlumacki/The Boston Globe via Getty Images)

Boston Globe via Getty Images

Utilities have always been tasked with providing electric power at the lowest rates while remaining reliable. But a host of external threats are shifting that paradigm: everything from climate change to cybersecurity is wreaking havoc, causing companies to rely on new technologies and expensive solutions. 

Take global warming: two-thirds of Americans see it as a threat. But some policymakers are concerned about cost while others continue to make a mockery of it. And thus, consumers and businesses are leading the charge, all made easier by the advent of such game-changers as onsite generation, battery storage, and localized microgrids. For their part, utilities are now stepping up and they are at the vortex of America’s carbon challenges. 

“For years, the question of climate change has been put on the back burner. There’s been a 30-year history of denial,” says Joseph Fiksel, Professor Emeritus at Ohio State University, during a discussion hosted by the United States Energy Association where this reporter was on the panel. “Utilities are at the core of our economy. Energy resilience is critical for cities and communities — the capacity to survive, adapt, and flourish during turbulent change. The changes are digitization, renewable technologies, smart grids, and electric vehicles. You must create an organization that is fit for the coming period of time.” 

Climate change had once been considered a problem in the distant future, he continues, but today it is judged to be urgent. The focus must now be on adaptation — how to mitigate the effects that such things as heatwaves and wildfires are having on the grid and the delivery of electricity. While cities and states have been at the forefront of the fight, they do not have the resources to fully conquer the threats. The federal government’s involvement is, therefore, necessary. 

The United States has reduced its annual energy-related CO2 releases by about 1 billion tons since 2005. That represents a 14% reduction even as the U.S. economy grew by 28%. That fact runs counter to tradition, which has emissions and economic growth moving in tandem. By migrating to cleaner-burning fuels and by using energy efficiency technologies, however, that link has been broken. But to meet the goal of reducing emissions by 80% by 2030 and hitting net-zero by 2050, the Electric Power Research Institute says that the pace must hasten. 

Who will be the hero? 

FORT WORTH, TX – FEBRUARY 16: Pike Electric service trucks line up after a snow storm on February … [+] 16, 2021 in Fort Worth, Texas. Winter storm Uri has brought historic cold weather and power outages to Texas as storms have swept across 26 states with a mix of freezing temperatures and precipitation. (Photo by Ron Jenkins/Getty Images)

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According to S&P Global Market Intelligence, 70% of the largest U.S. electric and gas utilities now have net-zero goals: Among those trying to get ahead of the low-carbon movement are Alliant

, Ameren

, American Electric Power

, CenterPoint Energ

y, Duke Energy

, Edison International

, Exelon Corp.

, PPL Corp.

, Sempra Energ

y, Southern Company

, and Xcel Energ


“The industry takes it very seriously,” referring to climate change and the energy transition, says Paula Gold-Williams, chief executive of CPS Energy

in San Antonio, during the webcast. “Decarbonization is greatly influenced by where your community is and what it can afford. I’ve compared notes with CEOs across the board. We all have the same problem in trying to make this work. We are big advocates of solar here. Number one in the state. Number two in wind.” 

Power companies have always been concerned with affordability and reliability while resiliency — the ability to bounce back after a storm, wildfire, or cyberattack — is something new. And Texas learned the hard way in February: about 4 million homes and businesses went without heat for several days. The state’s infrastructure failed, which involves natural gas supplies and the pipelines to transport it. Wind turbines, which need to be winterized, also froze up. 

When asked if the state’s governor politicized the crisis and tried to downplay climate change, Gold-Williams said “everyone has an opinion.” In the case of CPS Energy, “we want to remain a resource to everyone and every public official — to make sure they are well-informed. There is no villain and no great savior,” she continues, referring to the different fuel sources.

What then are some of the leading technologies to build resiliency and to fight climate change? If the net-zero targets are to be realized, then energy storage must be developed. The cost of producing green hydrogen from wind and solar power must also come down. And continuing the use of nuclear energy is instrumental; it makes up about 55% of this country’s carbon-free power. 

If decarbonization is the goal, then electrification of the economy is paramount: today, 20% of all energy used in homes and industry is electric, says the Electric Power Research Institute. But that number could go as high as 60% by 2050: not only will the power sector be using more renewables and battery storage but so too will buildings, cars, homes, ships, and planes. 

Storage is the real game-changer because wind and solar are intermittent. But long term, there are other solutions such as hydrogen and small-scale nuclear,” says Richard Mroz, immediate past president of the New Jersey Board of Public Utilities, during the webcast. The cumulative effect of dealing with external threats will require the hardening of existing assets and replacing older systems — ventures that will cost money. “The market often goes to the least-cost solution … Regulators and industry must come together and look at the consequences we are trying to avoid. They must balance out the costs, the benefits, and the risks.”  

The force of change is bearing down on society — risks that center on not just weather-related events but also those of bad actors. And utilities are in the eye of the storm. While they may have once been slow actors, they are now at the head of the table — led mostly by a new generation of managers. They are trying to transform themselves and to meet the challenges of the 21st Century, an endeavor that will have a global impact. 

In the words of Paula Gold-Williams, “We are living this evolution passionately.”

via Energy News

Categories: Energy