Faster clean energy innovation needed as power industry races to net zero

The transition to clean energy presents the power industry with new opportunities to innovate, but the challenge is deploying new technologies and policies quick enough, speakers said on Monday during the Edison Electric Institute’s EEI 2022 annual meeting in Orlando. 

According to Michael Webber, chief technology officer at Energy Impact Partners, there are four priorities that will help the power industry move toward a lower-carbon future: increasing efficiency and conservation; electrification of as much as possible; implementing the use of green fuels; and prioritizing carbon management and carbon removal. Investing in those areas is imperative as the industry aims for net-zero carbon emissions by 2050, said Webber, who is also an energy resources professor at the University of Texas at Austin.

“We should just deploy as quickly as possible; let’s see what works, and then let’s go back and figure out why it works. And we’ve got to do it faster,” Webber said. “If you look at what has happened with solar panels, wind turbines and battery costs, they have dropped 90-95 percent in the last few decades. They didn’t drop so much because the science improved so much – although the science did get better – they dropped so much because we deployed so many of them, and that improved the manufacturing processes, that improved supply chains. If we want to drive down the costs and find solutions, we better get going.”

The key to accelerating innovation in the energy sector comes down to deployment: deploying capital, deploying new government policies, and deploying energy systems at scale, Webber said.

Jigar Shah, director of the Department of Energy Loan Programs Office, said funding at the federal level and new tax breaks will spur investment in clean energy technologies. Billions of dollars in funding available through the Infrastructure Investment and Jobs Act is designed to jump-start energy innovation through research and development and demonstration of new clean energy technologies.

“I think a lot of what we’re trying to do is achieve lift-off,” he said. “All of these tools that we’ve been given – whether its tax credits, the infrastructure bill or others – have to be thoughtfully crafted to attract $100 billion in capital because if you don’t attract $100 billion in capital then you end up with a bunch of demonstration projects, which are cool, but are not actually getting to the mass market.”  

Legislation like the Energy Sector Innovation Credit Act and the Clean Energy for America Act, proposed bills that provide tax credits and incentives for clean energy, could also help spur investment, said Warner Baxter, executive chairman of St. Louis-based Ameren Corp. who also serves as EEI vice chairman. But getting that tax package passed on Capitol Hill will mean making Congress understand the tax package’s benefits aren’t limited to the energy industry.  

“When you talk to policymakers, you have to give them the why,” Baxter said. “The reality is, being part of a regulated business, all of these tax credits roll directly back to our customers. We want to make sure there is a clear understanding … for us to achieve the ambitious goals that we want to achieve for this country, we clearly need to have these investments and these tax incentives sooner rather than later to marry with the Bipartisan Infrastructure Law. If there was ever a time to do this, now is the time.” 

However, Baxter said, action on either of those bills would need to happen in the next 30 days before the summer recess and the election cycle begins.  

Shah said that moving forward would require a change in mindset – from energy efficiency to energy abundance. And it would require that American-developed technology is implemented in the United States.

“I think that fundamentally, what we’re all talking about is America has to do big things again,” Shah said. “It is our technologies that is powering China, and powering all these countries, and it is time for us to figure out what American industrial policy looks like. I do want everyone to come into our office and pitch to me, but I also want you to come to me with your impossible ask … because I think we are all at a point right now where we’re all aligned … we have all the technologies, all the know-how, all the capability and we have not allowed ourselves to think big.”   

Gerry Anderson, executive chairman of DTE Energy and EEI chairman, said he was proud of the achievements the energy sector has made in transitioning to clean energy, but there was a need for new policies and new technologies to meet the industry’s long-term goals and commitments to get to net zero. Deploying more wind, solar and battery storage will help get electric companies to that end goal, but it will also require companies to keep their nuclear fleets, he said.  

However, Ben Fowke, former executive chairman of Xcel Energy, said that new regulations are going to be needed in order to keep up with that new technology.  

“The regulators can’t let perfection be the enemy of the great,” Fowke said. “We’ve got to keep moving forward … We cannot regulate these new technologies the same way we regulate these legacy technologies. New technologies are completely different from the legacy technologies, and we have to break through this regulatory paradigm so that we can make these things possible.”  

Anderson said there was concern about the future of electrification and the impact that will have on the energy grid. Cybersecurity issues and reliability issues leave the country vulnerable, he said.  

“If I want to be kept awake (at night), it would be thinking about the fact that we’re going to hang transportation increasingly off the electric grid, and eventually a lot of building heating … and a lot of core industry as well,” Anderson said. “When you begin to think about the vulnerability to everyday citizens and the core of industry from any disruption to the electric grid on any scale, it is immense. That is nothing to be trifled with over time.”  

Neva Espinoza, vice president of Energy Supply and Low-Carbon Resources at the Electric Power Research Institute, said her concern was the sheer scale of the build-out required to get to the last 20 percent of the net-zero economy.  

“When you look at the pathways to 2050 and the different ways we’re going to get there, the one thing that stands out to me is scale,” she said. “Electricity is about 21 percent of the energy economy today, but by 2050 we anticipate electricity to become between 40 and 60 percent of final energy at the end of the day. In terms of scale, that’s going to take huge amounts of capacity build-out … somewhere between two and five times the amount of capacity on the electric system today.”  

Getting to that capacity, she said, would require a robust, well-planned supply chain that needs to begin being planned now.  

Fowke added that build-out would also require labor that the industry should be planning for now.