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Decarbonization of the Grid

Jan. 10, 2020
The tone of the conversations in the energy industry surrounding decarbonization has changed dramatically and positively over the last few years.

Recently, a 16-year-old climate activist from Sweden, Greta Thunberg, led one of the largest global environmental protests to ever occur. New York Public Schools excused 1.1 million students, and more than 171 companies, including Ben & Jerry’s, Patagonia and Lush Cosmetics, also participated by closing their doors for at least part of the day.

On the other hand, we have others claiming that climate change is a hoax, the rollback of the Clean Power Plan to what will be known as the Affordable Clean Energy Rule, withdrawal from the Paris Climate Agreement, and relaxed regulations on new coal-fired power plants.

I write this month’s column cautiously, as I don’t purport to be a climate change expert. Admittedly, I find it more than difficult to wade through all the conflicting reports on climate change. However, I recently heard a claim that there has been a lack of participation by the energy industry in the climate change debate, and I must respectfully disagree. The tone of the conversations in the energy industry surrounding decarbonization has changed dramatically and positively over the last few years.

The Flexible Grid

It is reported that electric generation accounts for around a quarter of the greenhouse gases emitted globally. The call for decarbonization has significantly contributed to the disruption of the electric utility industry, affecting both utility planning and operations functions.

More than half of U.S. states have set renewable energy goals, and there has been a huge shift in the make-up of electric generation resources. Many old coal plants have been retired and replaced with wind, solar and gas generation that release lower amounts of CO2 gases contributing to climate change. And, apparently the new coal plants being built are also much cleaner.

According to a couple of recent reports by the Rocky Mountain Institute, the role of natural gas as a bridge fuel may even be behind us. U.S. utilities that prioritize clean energy over natural gas may see cost savings due to the declining costs of renewable energy and battery storage technologies. The availability of cheaper generation resources also means that utility investors and climate activists may not be at odds to the extent often portrayed.

Cost-effective utility energy efficiency and demand response programs continue to be made available to customers and are further enabled by IoT technologies, data analytics and apps. Additionally, about half of the IOUs in the United States have adopted time-of-use rates that offer price signals to incentivize customers to use less electricity during peak hours.

There is still a lot of work to be done, but power systems continue to become more flexible to incorporate distributed energy resources, improve demand-side resources and some utility scale batteries for short-term storage are even being built.

Net Zero Goals

Duke Energy and DTE recently announced climate strategy goals of net-zero emissions by 2050. Duke also intends to cut its CO2 emissions (at 2005 levels) in half by 2030 and has plans to double its renewable energy portfolio by 2025, which is one of the most aggressive goals in the U.S. power sector. Other utilities have similarly aggressive plans including: First Energy, Ameren, AEP, Excel Energy, Entergy, Southern Company, Next Era Energy and PSEG.

SF6 Emissions

Like CO2, sulfur hexafluoride (SF6) is also a greenhouse gas that may contribute to climate change, but it is much more potent. The main use of SF6 is in electrical power equipment as an insulator. SF6 is a very minor contributor to the total amount of greenhouse gases due to human activity, but it has a very long life in the atmosphere, with a half-life estimated at 3200 years. Several SF6 gas substitutes with lower emissions and costs have been developed. PG&E for example, recently developed a plan to eliminate the use of SF6 by piloting the use of dry-air/vacuum dead tank circuit breakers (DTCB) in high voltage applications. Approximately 32 other utilities in the U.S. are also using dry-air/vacuum DTCBs.

Transportation Electrification

According to the U.S. EPA, the transportation sector generates the largest share of greenhouse gas emissions due to the use of petroleum-based fossil fuels. Now, vehicle manufacturers are starting to make a lot more electric vehicles (EVs). It is predicted that by 2023, 43 brands will offer at least one EV option. EV ownership is expected to reach 125 million by 2030. An increasing number of EVs fueled by electricity generated from lower carbon resources will significantly decrease the amount of greenhouse gases generated by the transportation sector.

Shout It Out

Electricity wins long term when environmental concerns are a key consideration. For electric utilities to remain competitive, regulatory changes, such as performance-based rates, decoupling or other rate reform mechanisms to connect goals with utility earnings will be essential. Our industry doesn’t always do a great job at speaking up about all the good things we are doing. We always have room for improvement, but safe, reliable, affordable- and now clean- utility service is the standard we are all working toward.

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