The future of the electric power industry is tied more closely than ever to public perception regarding air pollution. What’s rarely explained is that the pollution that affects our air quality comes from many sources, not just power plants and cars. The United States has been beating the proverbial stuffing out of power generating facilities to reduce emissions since the 1970’s clean air laws were passed. Progress has been astounding for all major pollutants. Likewise, the country became serious about addressing mobile-source emissions, which has been more challenging in many ways. Notwithstanding, new vehicles are about 99% cleaner compared to 1970 models according to EPA. Clearly, there is much positive news regarding the emissions trends from some of our biggest sources, but we rarely hear about it. Also, little is reported on emissions reduction progress in the commercial and industrial sectors. Are they doing their fair share?
Data compiled by the U.S. Energy Information Administration (EIA) for 2020 indicate energy consumption by the commercial and industrial sectors combined (47,920 trillion BTU) exceeded that for the electric power (35,744 T BTU) and transportation sectors (24,268 T BTU). The residential sector consumed 20,853 T BTU. A growing portion of the energy consumption in the residential and commercial sectors comes from purchased electricity, which reduces local emission sources. However, the transportation and the industrial sectors have maintained a high reliance on petroleum products.
National energy consumption data only provide partial insight into air emission trends. There are myriad source categories and relevant pollutants in the commercial and industrial sectors. Looking only at fuel combustion emissions using EPA’s National Emissions Inventory, industrial sources reduced criteria pollutants by an average of 40% between 2005 and 2020, while electric utility emissions declined by 58%. Existing industrial, commercial, and institutional boilers may be lagging utility power plants in terms of emissions reduction. However, EPA has been tightening the standards for conventional and hazardous air pollutants from major sources in these sectors in recent years. In addition, all major source boilers are subject to maintenance requirements to help ensure aging equipment is operating as efficiently as possible.
Integrated technologies that matured in the manufacturing sector will assist in the continuing optimization of commercial, institutional and industry operations, including managing air emissions. Information and operations technology (IT/OT) integration has improved productivity, reduced costs, and modernized manufacturing facilities for increased responsiveness to changing requirements. IT/OT integration also is facilitating the modernization of systems and operations in the power and oil and gas sectors. Further, the digitalization of lighting, heating, cooling, security and other systems has vastly increased the opportunities for improved efficiency and reduced pollution from smart buildings and now smart cities.
We are approaching a time when most energy management systems in all settings, including residences will be connected to the IoT or the IIoT and employ advanced analytics, AI and even machine learning. The next stage will be a high degree of reliance on edge computing, or the integration of computers, storage, and applications close to where data is used, facilitating real-time decisions and seamless operations. This level of integration and autonomy of cyber-physical systems has been referred to as Industry 4.0 or the fourth industrial revolution. Providing we avoid the Singularity (only kidding), edge infrastructure will be advantageous to the power sector due to lower latency, more manageable data analytics, expanded interoperability and increased cybersecurity.
Is it possible that FERC Order 2222 will be a further catalyst for these changes? FERC’s own media reports claim Order 2222 will facilitate the electric grid of the future by creating a level playing field for distributed energy resources (DERs) wishing to participate in the organized capacity, energy and ancillary services markets run by regional grid operators. This includes resources in front of and behind the distribution customer meter. As we have learned, DERs may include electric storage, intermittent and distributed generation, demand response, energy efficiency, thermal storage, electric vehicles/charging equipment and aggregations of these resources. One open question is whether the level playing field FERC references will be level in terms of environmental impact or emissions. That answer may remain in the hands of state and local regulators for now, but it is noteworthy that the Commission held a conference on carbon pricing shortly following issuance of Order 2222.
Bringing innovative technologies and cleaner resources online was clearly a priority for FERC when it issued Order 2222. At the same time, the Commission has stated its rule is technology and fuel neutral. It believes its actions will make the grid more nimble, flexible, and reliable and drive down costs for consumers. Time will tell if utilities and a growing number of new market participants can maintain our air quality progress and deliver on the rest of the Order 2222 promises.
