U.S. power companies, global partners must cooperatively turn goals into actions

United States power companies are leading the clean energy transformation by reducing emissions, deploying clean resources, and developing new technologies — actions that stakeholders say make this sector the centerpiece of decarbonization and provide opportunities to increase collaboration with international partners.

In fact, the U.S. power sector has been able to reduce carbon emissions 36 percent over 2005 levels as of the end of 2021, said Eric Holdsworth, director of Climate Programs at the Edison Electric Institute (EEI), which represents America’s investor-owned utilities. 

“It’s the largest reduction of any emitting sector in the U.S. and we’re very proud of our ability to be leading the way in the clean energy transition,” Holdsworth said during a Thursday session of the North America Climate Summit (NACS), held in New York Sept. 20-22 by the International Emissions Trading Association (IETA) in collaboration with the International Carbon Action Partnership as part of the Climate Week activities.

And according to several panelists during the session, there’s no time to waste in turning clean energy goals into action to fight climate change.

Collaborating with international partners is one way to do that and such cooperation is now more important than ever in order to support progress on a global scale, said Holdsworth.

“There won’t be a single solution for every country or every industry,” Holdsworth said. “It wouldn’t make any sense to develop new technologies for each country. We really need to find ways to maximize our learning by doing as we develop next-generation clean energy technologies that can help us all get to the net-zero goals we’ve set.”

For instance, the U.S. Department of Energy (DOE) says wind continues to grow as a viable source of clean, renewable energy for producing electricity, and in 2021, DOE statistics show that wind accounted for 9.2 percent of total utility-scale electricity generation.

And because Europe currently produces the majority of wind power globally — with countries like the United Kingdom, Denmark, Germany, and Spain having the most experience — it makes sense for U.S. power companies interested in wind to reach out to them for their expertise in manufacturing and installing wind power equipment.

That’s exactly what Newark, N.J.-based Public Service Enterprise Group (PSEG) is doing via a partnership with Ørsted, which is the developer building two wind farms off the coast of southern New Jersey, said PSEG President and CEO Ralph LaRossa during the Sept. 22 climate session.

Offshore wind is what’s new for the power industry, LaRossa said, noting PSEG is partnering with the Denmark-based company and the State of New Jersey — and will use both production and investment tax credits from the recently enacted federal Inflation Reduction Act (IRA) — to “build the industry here in the United States, specifically off the East Coast and in the Northeast.” 

“This is a great opportunity for us to step up… and to help reduce the temperature” of the Earth, LaRossa said. “We have set our goals and targets and now we’ll work across the state, the industry, the federal government, and with our international partners to close the gaps.” 

As power becomes more decarbonized, that benefit can translate to other sectors of the economy that become electrified, such as transportation and parts of the industrial area, said EEI’s Holdsworth, adding that “there’s a great role for power to play.”

In America and elsewhere, for instance, the mix of technologies has changed dramatically, with 40 percent of power in the U.S. now coming from non-emitting sources, said Holdsworth, pointing out that the progress has been driven by state and federal policies, customer demand, investor demand, technology and fuel pricing, and a wide range of other factors. 

In fact, federal policy such as the IRA and the Infrastructure Investment and Jobs Act provide a historic level of funding to accelerate these efforts and put the U.S. in line to reach its Paris Agreement goals, he added.

“I know the bill is not the one that many had hoped to see enacted… but I think there is no denying that the IRA is by far the most aggressive action the U.S. has taken to tackle the climate crisis,” agreed Elliot Diringer, senior policy advisor in the Office of the Special Presidential Envoy for Climate at the U.S. State Department, during the panel session. 

The IRA will reduce GHG emissions in every sector of the economy by one gigaton by 2030, Diringer said. “That’s 10 times more reduction than any other piece of legislation has delivered,” he said.

On the generation side of PSEG’s business, LaRossa said the IRA is providing important incentives, such as the production tax credits for nuclear. The new law is also “allowing us to take steps on the solar front,” he said, noting that PSEG has placed some solar panels on its utility poles across the state.

Diringer said that from an international perspective, the IRA also puts the United States firmly on track to meeting President Joe Biden’s goal of reducing emissions 50-52 percent below 2005 levels by 2030. 

Additionally, Diringer applauded action by the U.S. Senate, which on Sept. 21 ratified its first international climate treaty in three decades when it voted 69-27 to approve the Kigali Amendment to the Montreal Protocol, a 2016 agreement that will phase out hydrofluorocarbons (HFCs), which produce GHGs in air conditioners, refrigerators, and aerosol products, among others. 

The U.S. now joins the European Union and 136 other countries in approving the Kigali Amendment, which will stave off 0.5 degrees Celsius of warming this century by requiring countries to reduce their use of HFCs by 85 percent over 15 years, according to the Biden administration.

Diringer said the IRA and the Senate-approved Kigali Amendment are an “amazing pair of successes” to happen within a short timeframe, and while they are just steps — albeit big steps, he said — there is “so much further to go.”

For instance, to be credible, Diringer said companies must align their near-term actions with their long-term goals and approach climate action as an opportunity for job creation and economic growth.

PSEG’s LaRossa said his company has partnered with many manufacturers across the world to bring resiliency into the system and essentially created another workforce to handle it. “We’re now delivering power more efficiently than ever before due to updated systems,” he said.

Nevertheless, even with the new technologies and the new policies, barriers to deployment do exist.

“I think one of the big barriers, particularly in the United States, is interconnection for renewables and the permitting process,” said panelist Paul Freedman, executive vice president and general counsel at AES Corp., a publicly traded utility headquartered in Arlington, Va.

“We are going to have more climate-related impacts that are disturbing,” Freedman added. “That will crystalize that, ‘okay, there are always going to be concerns,’ but we really have to be committed.”