COP27 power panelists delivering on ‘decisive decade’ toward clean energy future
Panelists from the power industry, the Biden administration, Congress and the private sector agreed during a Friday COP27 Decarbonization Day session that they continue making gains during what they consider is a decisive decade for delivering results on promises made to reach net-zero emissions that will help decarbonize the sector.
They also agreed that more progress needs to happen — fast.
“Let me be very clear: there’s an urgency here; we’re already past the time when we should have acted more aggressively. We’re paying a heavy price because of the delay. Further delays is another multiplier effect. We’ve got to act now decisively; the costs are severe,” said keynote speaker U.S. Sen. Ben Cardin (D-MD) during the Nov. 11 session entitled “A Recharged U.S. Climate & Energy Landscape: Galvanizing Business Solutions for Net Zero.”
“We need everyone involved in this; this is a global effort… and all countries need to be doing everything they can to reach these targets and exceed these targets by these dates,” said Cardin. who has been an integral part in advancing climate policies to increase jobs, innovation and equity issues. “We’ve got to be more aggressive; the stakes are too high. And it can’t be done by the government alone. We need the private sector.”
White House National Climate Advisor Ali Zaidi, also a keynote speaker, agreed, noting that the bipartisan infrastructure law and the Inflation Reduction Act (IRA), both signed into law by President Joe Biden, signify that the nation’s political economy around clean energy and climate is on the upswing.
“And it’s because more and more people recognize that by leaning into this challenge, we’re actually leaning into an opportunity,” Zaidi said. “We’re creating good paying jobs that can support the middle class, and lifting up communities that have been for years written out, left behind.”
Zaidi also pointed to the results from the latest report released in April by the Intergovernmental Panel on Climate Change (IPCC), which says that action in this decade is critical to limit global warming to around 2.7 degrees Fahrenheit. To do that, the report says that global greenhouse gas (GHG) emissions must peak before 2025 at the latest and be reduced by 43 percent by 2030.
Scientists think there is increasing evidence of climate action, says the report, pointing out that “an increasing range of policies and laws have enhanced energy efficiency, reduced rates of deforestation and accelerated the deployment of renewable energy.”
The so-called ‘decisive decade’ mentioned in the IPCC report, Zaidi said, “cannot mean that you make a commitment and then you undermine it; that happens, there’s greenwashing in the world.”
“If you’re a corporate at this moment, this is not the time to launch a committee on your board — it’s time to do what some of these guys are doing,” he said, pointing into the audience. “It’s time to greenlight capital projects. It’s time to put steel in the ground. It’s time to take risk on your capital because failing to take that risk is the biggest risk that we can all face. And that’s the risk that we fail to meet this moment.”
The decisive decade, said Zaidi, is about delivery; “that’s what we’ll be judged by.”
And in the United States, he said, the electricity sector has been leading the way. “It’s been pulling along the rest of the economy. When you think about all of these decarbonization pathways, clean electricity is like the blood in all of these decarbonization pathways. That is the thing that flows through and animates the muscles to help us move in the right direction,” said Zaidi.
The IRA in particular will help cut U.S. emissions by up to 40 percent to 42 percent below 2005 levels by 2030, said Center for Climate and Energy Solutions (C2ES) President Nat Keohane during opening remarks for the session, which C2ES hosted with the Edison Electric Institute (EEI) and the Business Council for Sustainable Energy.
The event was one of the only private-sector events taking place at the U.S. Department of State’s U.S. Center Pavilion at COP27, the 2022 United Nations Climate Change Conference being held from Nov. 6-18 in Sharm El Sheikh, Egypt.
Cutting U.S. emissions by that target date, Keohane said, is a “huge down payment that is putting the United States on a path to meeting its 2030 goals and net-zero commitments by 2050.”
At the same time, the industry continues to see “an all-of-government approach to tackling the climate crisis with all federal agencies engaged with doing their part to reduce emissions, build climate resilience and spur the market demand we’re going to need for a low-carbon future,” said Keohane.
For instance, Sen. Cardin pointed out that the IRA includes $270 billion in tax credits that “should get the business community excited” because they provide predictability; investors can depend upon the policy because they don’t have to wait and see if there’s going to be an omnibus extension on their tax bills.
“And you can monetize these programs so you can have transferability,” said Cardin. “The bill created a level playing field where we’re reducing the green premium you used to have to pay if you wanted to do a green project. Also, you now have a nuclear production tax credit, which you didn’t have before.”
There are also lots of credits in the IRA for new technologies, said Cardin. “We want you to innovate and come up with new ideas.”
Zaidi said that the Biden administration has gone out of its way as part of the IRA to make sure the government is lifting up different models of deploying electricity — distributed power, rural cooperatives, public power — “we gotta do it all,” he said.
“To reach 100 percent carbon-free electricity by 2035, that means we need hydropower, advanced nuclear, geothermal, solar, wind and pumped hydro and lithium,” said Zaidi. “We need it all and we need all the business models, approaches and people pulling their hardest to move us in the right direction.”
Stated goals, targets
In addition to keynote remarks from Zaidi and Sen. Cardin, the session included two panel discussions with members of EEI’s executive delegation.
During the first panel discussion, Pedro Pizarro, president and CEO of Edison International and EEI vice chairman, along with Ralph Izzo, executive chair at Public Service Enterprise Group (PSEG) and an EEI Board of Directors member, discussed what their companies are doing now toward reaching a clean energy future, as well as how they plan to keep the ball moving forward.
For example, the Rosemead, Calif.-based public utility holding company Edison International participates in EEI’s ESG Initiative and is among numerous EEI member companies that voluntarily disclose ESG information through a reporting template that EEI developed in collaboration with investors and member companies.
Edison Energy — a subsidiary of Edison International, which also counts Southern California Edison (SCE) as a subsidiary — also supports its corporate clients with sustainability, electrification, and renewables procurement, said Pizarro.
Meanwhile, SCE has committed to net zero by 2045 across scopes 1, 2, and 3 of the Greenhouse Gas Protocol, the world’s most widely used GHG accounting standard. “We’ve done analysis on how the economy gets there in the cheapest way possible through clean electricity, EVs, buildings, clean fuels for what can’t be electrified, and carbon capture,” he said.
PSEG, which is New Jersey’s oldest and largest gas and electric delivery public utility serving three-quarters of the state’s population, currently generates 30 billion kilowatt hours of carbon-free electricity, Izzo said. The utility has committed to being net zero by 2030 in its scope 1 and 2 emissions, targets that Izzo said “are going to be pretty easy for us.”
However, Scope 3 — which encompasses emissions not produced by the company itself, but by those that it’s indirectly responsible for up and down its value chain — “is going to be an enormous challenge for us,” he said.
“We’re making a down payment on that right now by investing $300 million a year on energy efficiency. Scope 3 will have a significant portion related to natural gas, and that will be a huge challenge for us but one that we need to tackle,” Izzo said, adding that PSEG plans by September 2023 to file its science-based targets for scopes 1, 2, and 3 emissions.
Best technologies
Both Pizarro and Izzo pointed to exciting and promising technologies that they think will help them achieve their clean energy goals.
“We can’t lose sight of the fact that in the United States and in most countries, electricity represents only 18 percent of the energy that’s used,” Izzo said. “So if we’re going to electrify the rest of the economy… there are some enormous challenges before us in terms of building the carbon-free supply, which we think nuclear has to be a big part of.”
Izzo said the most exciting, promising technology to help PSEG meet its goals is energy efficiency. Izzo also likes “programmable thermostats on the wall. I like LED bulbs in sockets. The best way to reduce carbon emissions is to not use the energy that people use,” he said.
Izzo also said that the bipartisan CHIPS and Science Act of 2022, signed into law by Biden in August, “is going to put on steroids some of the smart technology that’s needed for us” to help consumers reduce their power usage.
For Pizarro, storage is really critical and he said a number of corporate clients at Edison International find it economical across a number of jurisdictions. He’s also excited by U.S. Department of Energy research being done for the National Labs looking at alternative chemistries. And renewables, in addition to energy efficiency and nuclear, also hold great potential, he added.
“And looking beyond power, decarbonization is not just a power-sector thing,” Pizarro said. “We really need to optimize across the entire economy. So there are a whole host of end-use technologies that are critical.”
Heat pumps, for example. Pizarro said that SCE has targeted $700 million toward providing a quarter-million heat pumps in its service area. “It’s important to get that technology cost down,” he said, “and we’re going to need investments across all sectors of the economy, as well as technology development, to decarbonize our sector.”
Universal access
The IRA also includes environmental justice provisions that call for equitable access and benefits to flow down to vulnerable communities. The EPA earlier this month asked for public input on how it should spend more than $13 billion from the IRA on fighting the climate crisis and advancing environmental justice.
Both Izzo and Pizarro said their companies are committed to environmental justice and are undertaking myriad initiatives toward improving it.
“In our industry, we prioritize universal access,” said Izzo. “We are strong believers that our energy efficiency investments should be deployed at low-income multi-family dwellings, hospitals, government buildings, and schools so that the folks who cannot afford the upfront capital costs associated with energy-efficient equipment but stand to gain the most from those investments should be served.”
And while energy efficiency requires some skill, Izzo said these jobs are easily trainable. “We have focused much of our efforts on non-traditional labor pools in the inner cities where the housing stock is old and needs those improvements,” he said, noting PSEG is recruiting 2,000 people for such work “to make sure everyone has access.”
During the second panel, EEI Chief Strategy Officer and Executive Vice President of Public Policy and External Affairs Brian Wolff asked industry stakeholders what help their sector needs right now in their efforts to move forward in the clean energy transition.
Nanette Lockwood, senior director of policy and advocacy at Trane Technologies, wants to be able to have buildings act like a battery to the grid, and as a building owner, the company wants to ensure it’s getting what it pays for from the power companies.
Kristen Siemen, chief sustainability officer at General Motors, said charging stations for electric vehicles are needed. “Customers need to see they can go cross country and charge their vehicles,” she said. “And we have to charge vehicles with green energy. We have got to do it together; that’s how we’ll be successful.”
