U.S. electric companies show global leadership on path to net-zero
Executives with four major U.S. electric companies emphasized on Friday they are on board with President Joe Biden’s all-of-government approach to decarbonizing not just America’s electric grid, but all of the nation’s energy-consuming sectors, including transportation, which generates the biggest sector of greenhouse gas emissions.
The utility industry leaders used a panel discussion at the COP26 UN climate change conference in Scotland to highlight their ambitious clean energy agenda as they strive for net-zero emissions in the U.S. power sector, where carbon emissions are now 40 percent below 2005 levels and at their lowest level in more than 40 years.
According to the Edison Electric Institute, which represents all U.S.-owned electric companies, nearly 50 member companies already have announced long-term carbon reduction goals, including 35 companies that are targeting net-zero carbon emissions by 2050 or sooner.
John Pettigrew, chief executive of National Grid, noted a sense of optimism as the first week of COP26 concludes. “Progress is being made,” he said. He noted large commitments among participants pertaining to cutting methane emissions and phasing out coal. “But the reality is, over the last 10 years, it feels like we’ve been jogging toward a goal line, but now we need to sprint.” For the industry to move more quickly, he added, “we’ve got to have the right policies, the right regulations, the right delivery mechanisms and supply chain.”
Pettigrew expressed support for two pillars of President Joe Biden’s domestic agenda, saying “the packages that President Biden is proposing are exactly the right packages to allow us to really push forward.”
The $1.2 trillion bipartisan infrastructure package calls for investing billions of dollars in grid modernization, while the $1.9 trillion Build Back Better Act contains $555 billion for clean energy investments, including clean energy tax credits, resilience investments and technology incentives. Although Congress has struggled to pass both pieces of legislation, EEI Executive Vice President Brian Wolff, who moderated the panel, said, “We know that the political will will be there. We know it’s what the voters want, we know it’s what our customers want.”
Today, 40 percent of all U.S. power generation comes from carbon-free sources, including nuclear, hydropower, wind, and solar energy.
Pettigrew said National Grid, which serves New York, Massachusetts, and Rhode Island, is focused on three key areas: (1) integrating large amounts of renewable generation to the grid, which will require a huge amount of transmission; (2) preparing for transportation electrification and growth in electric vehicles (3) and decarbonizing heat. The energy company, which also has operations in the UK, has already lowered its direct emissions by 71 percent from 1990 levels and has a goal of net-zero emissions by 2050.
Pat Vincent-Collawn, chairman, president and CEO of New Mexico-based PNM Resources, was the first utility CEO to announce a net-zero carbon goal. She noted that PNM has shut down two units in its coal-fired plant, which is about a third of its generation capacity in New Mexico. Next summer PNM will shut down the remaining two units at the San Juan Generating Station. Generation will be replaced with solar and batteries. “We are fortunate to live in a state that has the third-highest solar and on-shore wind potential in the United States, and we intend to take full advantage of that,” Vincent-Collawn said.
Since 2007, she said that PNM’s energy efficiency programs have helped take 1 million tons of carbon out of the air. PNM has a goal that its electricity generation will be 100 percent emissions-free by 2040, five years ahead of New Mexico’s carbon-free mandate.
Vincent-Collawn also stressed that the energy transition should be equitable for coal plant workers who will be dislocated when coal plants close. In 2019, New Mexico passed the landmark Energy Transition Act, which calls for the state to be carbon-free by 2045, and which also provides funding to help with job training and economic development for impacted communities. “I hope others look to us as an example to take this once-in-a-lifetime opportunity to make sure our portfolio is carbon-free and there is a just and equitable way to getting there,” Vincent-Collawn said.
Pedro Pizarro, president and CEO of Edison International in California and EEI vice chairman, noted that California has a 2045 net-zero target and an interim target of decreasing emissions 40 percent from 1990 levels by 2030.
That rapid transition relies on clean electricity to power a lot of the economy, Pizarro noted, and will require the addition of about 80 gigawatts of renewables, 30 gigawatts of storage, 30 gigawatts of distributed renewables, and 10 gigawatts of distributed storage. That level of deployment will require a major investment in the California economy, he said, estimating that $250 billion would be needed state-wide for those energy resources along with investments needed to connect them to the grid.
Edison recently published a report on the policy changes needed for California to meet its climate goals. Among the steps proposed are a faster shift toward electric passenger and commercial vehicles, an expansion in energy efficiency, greater electrification of buildings, more renewable energy and storage and investments to harden transmission and distribution infrastructure.
Despite the major investments required, Pizarro said, “There’s a pot of gold at the end of the rainbow.” He estimated the average customer in 2045 will be spending one-third less on their total energy needs as gasoline use goes down, for example, and efficiencies that drive cost-savings are realized.
Regarding federal policies that are needed to advance clean energy, Pizarro said, “Particularly when you think about the tax credits, at the end of the day, that helps make the transition more affordable for our customers. That’s really what it’s all about.”
Ralph Izzo, chairman, president and CEO of PSEG with operations in New York and New Jersey, said the company has an aggressive net-zero climate goal for 2030. He emphasized the need to retain and expand zero-emission nuclear generation. “Much like the all-of-government approach, we’ve taken an all-of-the-above approach,” he said.
The company is spending $400 million a year to repair its cast-iron gas system that will reduce methane emissions by 64 percent by 2030. The company also is investing $1 billion over the next three years in energy efficiency and more than $1 billion in off-shore wind energy. PSEG has approval to invest $150 million in the next year in electric vehicle charging stations and is seeking another $250 million to expand that even more in New Jersey.
“All of that pales in comparison to the 13 million tons of carbon per year that we avoid by producing 30 terawatt hours of nuclear power,” Izzo said. He commented further that there are market design flaws working against nuclear power. Fossil generators aren’t charged for carbon emissions and renewable energy suppliers get out of market payments. Nuclear is being squeezed on both sides. Those pricing issues need to be addressed, he said. Nuclear power produces half of the United States’ carbon-free electricity, he noted.
White House National Climate Advisor Gina McCarthy, who joined the electric industry leaders for the event, underscored that in order to achieve climate goals, the private sector and the public sector need to work together for the best interest of the American people.
Two out of three people in the United States live in an area that has a net-zero goal, she added.
“If we marry that with significant investments, we won’t just grab that future – we’ll win it. And we’ll also accelerate the kind of deployment of technology that we need … so that we can all benefit from investments in our transmission lines, so renewables have access to a resilient transmission system so we can all take advantage of it,” McCarthy said.
