Senior decision-makers come together to connect around strategies and business trends affecting utilities.

Post

Utilities: Not Just Making Promises, Making Changes

image credit: Photo 162903159 / Campaign © Krailas Yothayath | Dreamstime.com
Nevelyn Black's picture
Writer, Independent

Nevelyn Black is an independent writer with a background in broadcast and a keen interest in renewable energy.  In the last few years, she transitioned from celebrity interviews and film shoots...

  • Member since 2017
  • 883 items added with 510,171 views
  • Jun 1, 2021
  • 496 views

As predicted, public policy priorities and emerging trends have accelerated the need for utility business model reform.  In this era of electricity generation, utilities must shoulder the responsibility of environmental concerns, increased access to innovative technologies for customers, and of course, to provide the long-standing expectation of resiliency.  The shift created by these developments has renewables on everyone’s mind.

The Numbers

In February, the U.S. Energy Information Administration (EIA) projected that renewables were on track to produce more than 40 percent of U.S. electricity by 2050.  In 2020, the percentage shares of utility-scale electricity generating capacity for renewables was 25 percent.  Wind energy's share of total utility-scale electricity generating capacity in the United States grew from 0.2 percent in 1990 to nearly 11 percent by 2020.  Solar energy's share of total utility-scale electricity generating capacity in the United States rose from 0.1 percent in 1990 to 2.3 percent in 2020.   Nuclear energy's share of total U.S. electricity generation has remained the same since 1990 at about 20 percent.

State requirements to use more renewable energy sources and federal emissions regulations for power plants have become the catalyst for change in the energy-mix.  It's been said utilities are reluctant to invest in renewables because of reliability concerns, high costs and the already established use of natural gas. A year ago, NY Times energy writer, Ivan Penn concluded that ‘utility executives acknowledge that renewable energy will continue to grow. But many dismiss the idea that wind turbines, solar panels and batteries can replace natural gas plants.' In 2020, the United States generated about four trillion kilowatt-hours of electricity.  To reach a net-zero economy by 2050, the 60 percent of the electricity generated by fossil fuels will have to be replaced. Utilities may not have a clear path to fully replace natural gas plants with renewable energy sources now but they are embracing renewables, not only to meet state mandates but also to expand their portfolios.  State officials have instituted renewable energy requirements as well as net-zero goals. Should utilities annually adopt and announce ambitious net-zero goals to show their support for clean energy?  NextEra's chairman and CEO Jim Robo responded,  “I think it's very disingenuous for a lot of folks in our sector to come out with net-zero commitments when they don't really have a view to get to what I call 'real zero.’”  Still some of the largest utility companies in the country are doing more than making promises.  They’re making changes.

Who’s Who in Renewables

Most recently, NextEra, Dominion Energy, Duke Energy, and Southern Company’s subsidiary, Georgia Power have responded by taking the reins of renewable energy.  

NextEra Energy Inc. noticed the need for change and renegotiated its deal with GE, swapping gas turbines for wind turbines.  "We made that pivot because we like the economics of the wind business, ... and we ended up doing 1,000 MW of wind in 2003 as a result and that started the real growth of renewables at the company," CEO Robo said.  NextEra is now the largest U.S. utility by market cap and one of the world's top solar and wind power producers.  The company will construct a 100MW solar plus 30MW of storage project in Arizona.  The Wilmot Energy Center there will supply electricity to Tucson Electric Power and produce enough energy for about 26,000 homes annually. Showing support for a new way of doing business, Tucson Electric Power president and chief executive Susan Gray said: “Storage makes solar power even more valuable by helping us provide clean, renewable energy when customers need it most.”  Not limited to wind and solar, NextEra is planning a major new transmission line to carry carbon-free hydropower from Canada into the U.S.  Looking to the future of clean energy, the utility announced a $65 million investment toward green hydrogen.  "The exciting thing about making green hydrogen from electricity is you can also decarbonize huge swaths of the industrial carbon footprint as well," said utility CEO Jim Robo.

Dominion Energy also one of the nation’s largest utilities, has issued requests for proposals to develop new solar, onshore wind, and energy storage projects. The utility erected the largest offshore wind project in the country off the coast of Virginia.  “Every day, we’re making more progress toward a clean energy economy in Virginia,” Ed Baine, president of Dominion Energy Virginia, said.  Dominion Energy Virginia seeks proposals for (1) up to 1,000 megawatts of solar and onshore wind and 3 megawatts of energy storage located in Virginia (2) up to 175 megawatts of small-scale solar projects, and (4) up to 8 megawatts of solar to support the company’s Community Solar Pilot.  With the program, customers can choose to purchase energy from solar facilities located in communities and then virtually use solar energy, without solar panels installed on their home or business.

Leading the nation in renewable energy and advocating for climate change goals, “Duke Energy is making an aggressive push to expand renewable energy, reduce carbon emissions and achieve a net-zero carbon goal for 2050.  An expansion of solar power will be a key element of that effort,” said Stephen De May, Duke Energy’s North Carolina president.  The utility operates more than 40 solar facilities and has begun construction on the 22.6-MW Speedway Solar power plant in Cabarrus County.   Duke Energy already maintains more than 3,700 MW of solar power on its grid in a state where more than half of the emery-mix is already carbon-free.  Pushing ahead to increase that figure, Duke Energy plans to double its renewable portfolio from 8 gigawatts (GW) of capacity to 16 GW by the end of 2025.

Southern Company’s Georgia Power already hosts one of the largest voluntary renewable portfolios in the country but they still intend to expand their renewable generation offerings by more than 72 percent within four years.  “We’re focused on finding new, innovative ideas and energy solutions that we believe will help build a sustainable energy future for our state and bring incredible value to our customers.” said newly appointed chairman, president, and CEO, Chris Womack.  The utility faces daily challenges and delays with the latest project to complete the first new nuclear units in decades.  The debate continues about whether nuclear energy should be counted as a clean energy source but Womack is optimistic about the end results, “We’re not only making history as we move closer to bringing online the first new nuclear units in the U.S. in decades, we’re also growing and evolving as a company.”

Smaller projects making big waves include Green Mountain Power’s (GMP) new virtual power plant program that will consist of a network of residential battery systems in Vermont.  GMP subverted the high costs of batteries by entering a partnership with ISO-NE, Tesla and Customized Energy Solutions (CES), a software solutions company.  “This project would not be possible without the great partnerships we have with our customers in the Powerwall program.  This pilot is unique and important because it builds off our existing innovation and collaboration to deliver meaningful change to essential grid functions by reducing carbon emissions, increasing performance and lowering costs,” said Mari McClure, president and CEO of GMP.  In 2017, GMP was the first utility to partner with Tesla, and launched the first Powerwall pilot program.  Now GMP is the first utility with tariffed home energy storage programs for customers.  Reducing emissions is one benefit to these systems but perhaps these units were able to reduce the number of power outages caused by recent thunderstorms in the area.

Regulations on the Rise

“One of the easiest things to defer, if your state or locality is having a bad budget year, is maintenance on your infrastructure -- ‘We’ll do it next year,’” said R. Richard Geddes, founding director of the Cornell University Program in Infrastructure Policy.  This statement was made in response to infrastructure problems across the country.  Some expect the private sector to be better but the Texas power plants and gas pipelines knocked out in the February storm are privately owned. Because of this, the federal government is being called on to set mandatory requirements and oversee issues like cybersecurity.  Energy Secretary Jennifer Granholm said to a congressional panel, “One wonders whether it is time we match what we are doing on the electric side with what we do on the pipeline side.”  Blanket statements and emphatic rules have no place in a peaceful negotiation.  But compromise is a must.  Adie Tomer, a fellow at the Brookings Institution said “These are generational, cultural changes that we need,” he said. “There’s too much of a ‘manifest destiny’ mindset in American infrastructure -- this idea that we will inherently grow outward. And that is not appropriate for the economic, demographic or environmental moment we live in.”   We are growing and the demand for electricity is expected to rise.  Will federal and state regulations rise at the same pace and are their net-zero goals too ambitious?  Can the industry, as a whole, replace natural gas with renewables by 2050?  If so, how?  How is your utility meeting the challenge of environmental concerns, customer expectations, innovation and resiliency?  

 

 

Discussions

No discussions yet. Start a discussion below.

Nevelyn Black's picture
Thank Nevelyn for the Post!
Energy Central contributors share their experience and insights for the benefit of other Members (like you). Please show them your appreciation by leaving a comment, 'liking' this post, or following this Member.
More posts from this member

Get Published - Build a Following

The Energy Central Power Industry Network is based on one core idea - power industry professionals helping each other and advancing the industry by sharing and learning from each other.

If you have an experience or insight to share or have learned something from a conference or seminar, your peers and colleagues on Energy Central want to hear about it. It's also easy to share a link to an article you've liked or an industry resource that you think would be helpful.

                 Learn more about posting on Energy Central »