PHILADELPHIA — In the last two years, oil giant Royal Dutch Shell has purchased a U.K. electric utility and two electric vehicle charging companies. Shell CEO Ben van Beurden and his wife both drive EVs themselves.
“On the other hand, in this country, we have 43,000 zip codes,” oil expert Daniel Yergin said. “One hundred eighty-nine of them — which represent two-tenths of 1% — reflect 25% of all EV sales in the country.”
Yergin, founder of IHS Cambridge Energy Research Associates, offered that statistic to set the stage for a discussion on electrification and decarbonization at the Edison Electric Institute’s annual conference last week. The three U.S. electric utility CEOs who joined him agreed: While the industry has come a long way in reducing its carbon emissions, the road to carbon-free power won’t be a freeway.
Exelon CEO Chris Crane said there are regions, such as Commonwealth Edison’s territory in Northern Illinois, that are 100% carbon free now.
“For Illinois to declare they want to be carbon free by 2030 to 2032, that’s not a stretch. … And it’s because of existing nuclear and the renewables that have been installed without the storage, without the advanced technology. But in other jurisdictions that would be much more difficult.”
Crane said storage technology needs to advance beyond lithium-ion batteries before utilities can take full advantage of intermittent resources. “It’s a ways away from [the] central station being [in] full demise,” he said.
Duke Energy CEO Lynn Good said utilities must remain “the voice of reliability and affordability.”
“We need to recognize that we don’t have all the tools today to operate at scale to achieve a 100% renewable solution in four-season climates and heavy urban areas and areas that don’t have a mix of renewable resources that certain geographies have,” she said.
Xcel Energy CEO Ben Fowke said his company can help customers and communities reach 100% renewables with customized programs but that it will need more advances to reach Xcel’s company-wide target of 100% carbon-free by 2050 and 80% by 2030.
Eventually, the grid will be saturated with renewables and short-duration batteries, he said.
“And at that point, we’re going to [need] those carbon-free dispatchable resources. … Nuclear is one today. So, we’re all about preserving our nuclear fleet. And I think the technologies that will get us that last 20% on our goal … might come from hydrogen. It might come from the next generation of nuclear. It might come from carbon capture. It might come from something we don’t even know — long-term storage for example.”
Chef Says Adaptation is Recipe for Success
Chef José Andrés, the keynote speaker for the June 10 session, talked about how he and others provided more than 3.5 million meals in Puerto Rico following Hurricane Maria in 2017.
Andrés recalled how the effort grew “from one kitchen to 26 kitchens; from 20 friends [the] first day to 25,000 volunteers. We went from 1,000 meals a day the first day to more than 150,000 meals a day every day. We were delivering food in 935 places each day. … At the end, what seemed impossible became possible. What we did was adapt to every circumstance.”
Andrés said his group was initially rebuffed when it asked the Army to deploy its helicopters to deliver the meals to remote locations. “The bosses here would not make it happen, but when I met with the guy who was running the helicopter he said, ‘We’ll find a way to deliver that food.’ We needed to cross rivers without bridges. If I ask here, I never get it. If I ask the officer in charge of a unit of Humvees, boom! Those men and women would be there helping us cross the rivers. [When] we needed a boat to get to Vieques, if I ask over here, it would never happen. In the moment I met the Navy captain, all of the sudden, I had the boat to go every day to Vieques,” Andrés said.
“You see the men and women are extraordinary people, the military and [the Federal Emergency Management Agency]. But we need to liberate them from rules and regulations that don’t allow them to be successful. Because we are outside the system, we don’t follow rules. We don’t follow the plan. We continuously adapt.”
Andrés also recalled for the EEI crowd his first visit to New York City, when he was a member of the Spanish Navy and his ship docked at 30th Street on the Hudson River. “Last month, I opened a big restaurant … 100 meters away from the dock I arrived on at 30th Street. Do I believe in the American dream? Yes, I do believe in the American dream.”
Natural Gas: Bridge or Destination?
It wouldn’t be an energy conference without a debate about natural gas’s future. EEI’s panel (“Natural Gas: A Bridge or a Destination?”) featured an environmentalist, a representative of gas turbine manufacturer GE Power and two utility representatives.
Mark Brownstein, the Environmental Defense Fund’s senior vice president for energy, said gas’s future in a zero-carbon electric future will depend on the competitiveness of storage in supplementing intermittent sources and the gas industry’s ability to eliminate CO2 and methane emissions.
If the goal is to be net carbon zero by 2050, gas’s future “has a lot to do with the level of investment in carbon capture and storage, either at the power plant or it may be in the context of producing hydrogen that is then run through combustion turbines,” Brownstein said. “But either way, you have to have some way of capturing that CO2. The future is really up to you guys.”
DTE Energy CEO Jerry Norcia said his company is doing its part to prevent methane emissions by replacing leaky cast iron pipe with plastic.
Diane Leopold, CEO of Dominion Energy’s Gas Infrastructure Group, said the gas industry also needs to improve its physical and cybersecurity to match mandatory reliability standards for the electric industry. “So, we’ve been investing heavily, thinking of ourselves as the critical infrastructure to be able to be that backup … to achieve these goals of higher electrification and increased penetration of renewables.”
Brian Gutknecht, chief marketing officer for GE Power, said gas will continue to prosper as the cheapest dispatchable thermal energy technology, noting its energy density allows it to produce energy on 50 to 100 times less real estate than renewables.
Carbon capture “for us is the next tier,” he said, adding that GE’s gas turbines can burn 100% hydrogen. “Our customers are buying an asset that early on can accelerate decarbonization [by] burning natural gas, and over time, as the technologies advance, the role of gas is going to change, and our technology is able to change with it.”
Brownstein said the 2015 leak at the Aliso Canyon storage facility, which took four months to plug, is an “object lesson.”
“The methane emissions that came out of that facility … basically [wiped] out all of California’s climate progress for the course of that year, from all measures,” he said. “California learned from that experience … that battery technology was ready, willing and able to deploy to support the electric grid. So, the role that gas was playing in providing peak support in the summertime was taken up by batteries.
“The lesson is when the industry fails to take care of their equipment and emissions result, there are other competitors in the marketplace now … able to take up that slack — so much so that California is really playing with the idea of closing that facility and other facilities like it entirely. The options that we have to deliver reliability and resilience … are growing. It’s not the case that natural gas has a corner on that market.”
Gutknecht acknowledged that gas’s role will change. “It will be doing more firming when renewables aren’t available,” he said. “Batteries are going to play a very important role for shorter duration … storage. So, gas is left to play the longer duration role that may be required at times.”
Addressing Climate Change: A View from the States
At a session on the states’ view of climate change, former Ohio regulator Asim Haque, reflected on how his perspective has changed since joining PJM 12 weeks ago as executive director of strategic policy and external affairs.
Haque said the RTO has gotten whipsawed by stakeholders’ decision in April to explore how to accommodate carbon pricing in its markets. (See “Carbon Pricing Talks Move Forward,” PJM MRC/MC Briefs: April 25, 2019.)
“On the one hand, you’ll get folks within the environmental community who will say, ‘It’s about time.’ On the other hand, you’ll get perspectives — which I’ve already gotten — from states who will say, ‘How dare you engage in policymaking?’ This is the Catch-22 that the organization finds itself in.”
Haque knew what he was getting himself into when he took the job, however.
“From an outsider’s perspective, PJM is a very convenient punching bag,” he said. “Politically it’s so intelligent to utilize PJM in that fashion.”
The 13 states and D.C. in PJM’s territory have disparate views on climate policy, making it difficult to achieve any kind of consensus, Haque said.
The D.C. Public Service Commission is on one end of the spectrum, required to consider climate change in all decisions. “While states can move the ball … it’s a no brainer that federal action is necessary,” D.C. PSC Chair Willie Phillips said.
With New Jersey planning to rejoin the Regional Greenhouse Gas Initiative and Virginia’s governor considering it, Pennsylvania is at risk of becoming the “donut hole” in RGGI, acknowledged Sam Robinson, deputy chief of staff for Gov. Tom Wolf (D). Republicans, who control Pennsylvania’s House and Senate, contend such a move would require legislative approval.
Although the state hasn’t taken steps to join RGGI, it “is the type of program we would consider,” Robinson said. “It’s something we’re looking at.”
Panel moderator Ralph Izzo, CEO of Public Service Enterprise Group, said the need for grid resilience will only increase in a world of electrification of transportation.
“If you think people are grumpy today when they can’t charge their cell phone after a two-day outage, think of what the future will be like if they cannot drive their car after a two-day outage.”
— Rich Heidorn Jr.
