Big opportunities, challenges, ahead in energy transition: power CEOs

Power sector participants have big opportunities and perhaps bigger challenges in facilitating the clean energy transition and mitigating the effects of climate change that have already arisen, such as more extreme wildfires, utility CEOs said June 13 at a conference in Austin, Texas.

Citing the November 2021 Infrastructure Investment and Jobs Act and the August 2022 Inflation Reduction Act's impact on the power sector, Warner Baxter, outgoing EEI chairman, and executive chairman at Ameren, said they constitute "transformational policies that set us on a path to what we need to achieve, not just as an industry, but as a people."

"We changed our mindset, and we chose to be forward-looking, not compromising along the way with reliability and affordability," Baxter said during a CEO roundtable. "We found solutions together, because we know that's how we find solutions."'

'Steel in the ground'

Pedro Pizarro, EEI's new chairman and Edison International's president and CEO, said, "All of the work that has been done the last 12-18 months would be for naught if we don't get steel in the ground."

Work at the federal, state, and local level remains to "connect the dots in an economically affordable way."

"We do have an inflationary period now," Pizarro said. "We may or may not have a recessionary period. As an industry, I think we've done a good job and will continue to do a good job of providing reliable, affordable power."

State regulators are under pressure to hold down costs, however, and must be persuaded that "five, 10, or 20 years down the road, sitting at the other end of the energy transition" prudent decisions were made. "We need to be telling our story now, ahead of time, that this is the more effective way to achieve [our goals]," Pizarro said.

Ameren's Baxter foresees "more work to be done, especially in the transmission arena, on a bipartisan basis."

"There's some more progress that has to be made on interregional planning as well as cost allocation," Baxter said. "There's a lot of proposals out there. It's complicated. That doesn't mean you back away. That means you engage. We have to get more transmission built, effectively affordably."

EPA proposal

Asked about the US Environmental Protection Agency's proposal to restrict carbon dioxide emissions at new coal and natural gas plants, Baxter said his company is "very focused on being as clean as we can, as fast as we can, without compromising reliability."

But the EPA proposal "may not be ready for prime time yet," Baxter said.

"Natural gas-fired generation is a critical reliability partner," Baxter said. "Natural gas is going to make sure we have reliability and is going to help us accelerate [the] deployment of renewables. It's a balancing act."

Maria Pope, the new EEI vice chairman as well as Portland General Electric's president and CEO, noted that the power sector currently produces less CO2 than it did in 1984, powering a much larger economy.

"We have aligned our goals with the Intergovernmental Panel on Climate Change's now sixth report, which is a pretty big job in terms and significance on our actions," Pope said, resulting in focusing on using only hydropower, wind, solar and battery storage for 80% of all power by 2030, and the company is the largest battery deployer outside California.

"This clearly reflects the values of our customers, who are moving very quickly," Pope said.

Security, natural disasters

But even as utilities collaborate to facilitate the clean energy transition, they must work to enhance physical security and cybersecurity not just about existing assets but also regarding supply chain issues, Edison International's Pizarro said.

PGE's Pope said power sector participants must collaborate to find best practices not only for security but also in how to combat extreme natural disasters such as wildfires and events, such as Superstorm Sandy.

"We have learned a lot from the Gulf to New England to the West," Pope said, which prompted her company to prepare and plan for similar disasters.

"All of a sudden, we have 2 million acres on fire," Pope said of the Pacific Northwest's 2022 wildfires. "We've had to deal with what essentially had become a crime scene."

Increasingly extreme events such as wildfires constitute "a national problem, not just one utility's problem," Pope said.