Power CEOs progress in decarbonizing energy sector to reach net-zero future
Securing a green energy future means the nation’s power sector must continue making major cuts in carbon emissions and that involves more than one strategy, according to three of the industry’s top electric company chiefs who spoke during the May 25 session, The Power Sector’s Transition to Net Zero, during the 2022 Climate Leadership Conference underway in Arlington, Va.
Thus far, the United States power sector is making commendable progress and has reduced its carbon levels 35 percent below 2005 levels, according to Amy Holm, executive director of The Climate Registry, who moderated the session.
“This is very important progress but we know that much more must be done to decarbonize the power sector to avoid the worst impacts of climate change,” Holm said, noting that the industry is the nation’s second-largest source of GHG emissions and must make even more reductions during the current decade.
Ralph Izzo, chairman, president and CEO of Public Service Enterprise Group (PSEG), agreed, saying decarbonizing the energy segment to meet global climate goals by 2050 requires an “all of the above” strategy.
For PSEG, this includes: improved energy efficiency measures; preserving the nuclear power fleet; continued investment in renewable sources like off-shore wind and solar; electrifying transportation; and working to get a national price on carbon. “If we do all that, we’ll create a vision for the future that says we’re going to use less energy,” said Izzo.
For example, fixing a dollar amount to the carbon emissions produced by power plants could help unveil the real costs of various energy sources, Izzo said, and could point the economy toward more reliance on cleaner technologies and generation sources rather than relying on carbon-heavy sources like coal.
Calvin Butler, senior executive vice president and chief operating officer for Exelon Corp., said the whole-of-government approach to meeting climate change goals under the Biden administration helps the electric sector continue to move away from working in silos, and forces companies to “look internally and say ‘what are we going to do?’”
Some of what Exelon has done to answer that question includes setting out to electrify its fleet. “We’ve been doing this for well over a decade; I like to say we were doing it before it was in vogue,” said Butler. “It’s kind of what we do to manage our business.”
In fact, Exelon set a 20-percent carbon-reduction goal for 2020 and Butler said it was met in 2016. The company also has sped up infrastructure replacement to reduce its GHGs, and each of its utilities have implemented smart grid technology to help customers reduce their energy use.
Overall, Exelon’s utilities are working to electrify 30 percent of their vehicle fleets by 2025 and 50 percent by 2030, Butler explained.
Exelon also looks for partners to invest in to drive new technologies. “Because we weren’t going to do it alone,” he said, adding that collaboration and partnerships will help the sector reach its goals toward a net-zero future.
For instance, Exelon over the next decade plans to invest more than $4.8 billion to decarbonize, Butler said. For instance, the company’s Climate Change Investment Initiative (2c2i) invests $20 million over 10 years in companies with emerging technologies that will drive the clean energy transition and improve grid resilience, he said.
Additionally, diversity, equity and inclusion are part of Exelon’s investments. The recently announced $36 million Exelon-funded Racial Equity Capital Fund will support minority-owned businesses in the company’s service areas in Delaware, the District of Columbia, Maryland, Illinois, New Jersey, and Pennsylvania. The goal of the fund is to empower small, minority-owned businesses to grow their capacity, increase revenue and hire more employees, Butler said.
“If our communities don’t come along with us, we aren’t going to get there,” he said, noting that if companies incorporate diversity, equity and inclusion into the work they do and make it foundational, then they will see the results tenfold. “We’re investing in them and we’re also doing business with them,” he said.
It is crucial to provide support to the most disadvantaged, climate-vulnerable communities through awareness and the development of climate adaptation plans, added Pedro Pizzaro, president and CEO of Edison International, the parent company of Southern California Edison (SCE).
Pizarro said many companies spend a lot of time on climate change mitigation but should also move into climate change adaptation. He said that it is imperative for the public, industry and community partners to work together to modernize critical infrastructure and adapt to the changing climate, and pointed out that less than half of counties and only one-quarter of cities in SCE’s service area have climate adaptation and resilience plans.
“The net zero idea can’t be solved by looking at just one industry; we must look across economies,” he said, “identify the problem… lay out the framework and then figure out the pieces… to travel the path to net zero.”
Edison International two weeks ago issued a white paper, entitled Adapting for Tomorrow: Powering a Resilient Future, that reported findings from SCE’s Climate Adaptation Vulnerability Assessment (CAVA) on assets, operations and services throughout its 50,000-square mile service area.
The CAVA concluded that by 2050, wildfires could leave large swaths of customers without necessary services for long periods of time, rising sea levels could inundate electrical facilities, and extreme temperatures could reduce electrical capacity.
Energy companies will need to modernize planning for the grid now to continue to safely provide reliable, clean and affordable energy to customers, according to the report, which Pizarro called “sobering.”
Like his colleagues, Pizarro said that partnerships and long-term collaboration among stakeholders are key to making climate change adaptations that will help utilities reduce climate-related risks.
Specifically, successfully adapting while transitioning to a clean energy economy requires updated planning processes and frameworks to address these issues over the long term across all infrastructure, including energy, wastewater, fuel supplies, and transportation corridors, said Pizarro, who added that this will require increased collaboration among utilities, regulators and stakeholders.
Policymakers at the legislative and regulatory branches must see the utilities as partners and have them at the table to help make decisions, the executives said.
The 2022 Climate Leadership Conference concluded Thursday.
