New Edison Electric Institute board leadership optimistic about industry’s net-zero goals
There’s a lot to be optimistic about regarding the power industry’s path to reaching net-zero carbon emissions in the decades ahead, said the new chairman and vice chairmen of the board of the Edison Electric Institute (EEI), the national association of investor-owned electric companies, during the June 9 opening general session of the EEI 2021: The Road To Net Zero virtual conference.
Overall, the industry’s 2020 emissions are down 40 percent versus 2005 levels, said Gerard “Gerry” Anderson, executive chairman of Detroit-based DTE Energy, who on June 8 was elected chairman of the Board of Directors of EEI, where he also is recognized as the chief architect of the organization’s climate change policy.
“There’s no other sector that’s really moved” toward such decreases like the nation’s power sector has, Anderson said, noting that he expects this trend to continue and accelerate. “So many of us are moving to retire coal and backfill with renewables and as much gas as we need for reliability that these drops are certain, I think, to continue in the decade ahead.”
Anderson said there’s also reason for optimism in the current infrastructure legislation that’s moving through Congress. “We will almost certainly see supportive tax provisions for solar and wind, which will make our investments more affordable,” he said. “But I think we’ll also see an umbrella for new technologies that will help with carbon capture, nuclear and other things that we’re going to need longer term.”
Anderson also predicted that the legislation will include research and development investment dollars. “We saw some last year,” he said, “and I think we’ll see them increase.”
Once these items are locked down, Anderson said the industry’s next step on the road to net-zero carbon emissions is to pursue the development of a bipartisan clean energy standard that would set up a long-term vision for the industry.
“That won’t be easy,” said the EEI board chairman, who nevertheless noted that the industry is “game to work out a standard that is both ambitious and practical. It can be done in a way that works for our customers and that also meets the urgency of the climate agenda.”
Interestingly, added Anderson, the Biden administration also has deemed such a standard as being critical. “They are talking about it and so are we,” he said.
At the same time, there’s optimism around efforts by EEI and its member companies advocating to federal lawmakers about the importance of getting to scale the new technologies that the industry will need to reach President Joe Biden’s ambitious carbon goals, said session moderator Pat Vincent-Collawn, chairman, president and CEO of PNM Resources, the parent company for utilities PNM in New Mexico and TNMP in Texas.
Warner Baxter, chairman, president and CEO of St. Louis-based Ameren Corp., who was elected Tuesday as one of two new vice chairmen of the EEI board, agreed with Vincent-Collawn, saying the industry is “strongly advocating” for increased federal funding that would be used for new clean energy technologies, such as carbon capture and storage, among others.
“Many of us in the industry have committed to net-zero carbon emissions by 2050,” said Baxter. “And many of us, at the same time… have robust plans to reduce them 80 to 85 percent by 2040, generally speaking. But we still need to get to that last 15 to 20 percent and that’s where these new clean energy technologies are going to have to come in.”
And that will take time and money for R&D, testing and other items that will help the industry get such technologies safely on the grid, Baxter said. “We’re encouraged by the Biden administration talking about the infrastructure package including significant funding for these cleaner energy technologies,” he said, adding that the funding has to be immediate so that the industry can begin working with these new technologies now.
Additionally, there’s industry optimism around electric transportation and electrification of America’s economy, which are major players on the industry’s road to net zero, said new EEI vice chairman Pedro Pizarro, president and CEO of Rosemead, Calif.-based Edison International.
“While a lot of the focus is on the power sector to reach such goals, this really needs to be something that cuts across all sectors of the economy, particularly across the transportation sector, which is associated with so many of the renewable gas emissions for our country,” Pizarro said.
That’s why it’s “so important” for investor-owned utilities to work together as an industry “to help facilitate this transition,” said Pizarro, who noted that such a transition will require partnerships and collaboration, not just among EEI members, but with other utilities that are not part of EEI and with the public and private sectors, among others.
“It will take a pretty darn big village to make this work and to make it work within the time frame that we need,” he said.
The EEI CEO Task Force has asked EEI members to establish their own individual electrification goals to help the industry lead by example, said Pizarro, noting that the task force’s efforts are designed to help members align around a common strategy for both electric transportation and electrification of the nation’s economy. And already EEI member companies are collectively on track to electrify more than a third of their fleets by 2030, he said.
Other topics the CEOs discussed during the opening general session included cybersecurity, diversity, equity and inclusion, the need for natural gas, and the Biden administration’s proposed tax increases and their impacts on customers, among others.
EEI President Tom Kuhn closed out the session by announcing this year’s EEI Edison Award winners: AES Corp., Edison International, and the Japan-based J Power Electric Power Development Co. Ltd., which were recognized for their “remarkable innovation.”
Kuhn added that while this EEI conference “is our second big annual virtual conference, I’m hopeful it’s our last. We hope to convene next year in Orlando.”
