Place strategy

The place of utilities in a net zero future depends on just transition and regional grid policies

Practical pathways for aligning electric utility planning with future climate goals – from market transformation in regions still heavily dependent on fossil fuels to a just transition for workers and communities – were discussed. of a webinar at the end of January organized by Energy Central and the Collaborative 2030 utility.

Building on the outcomes of last year’s COP 26 climate summit, with its halting progress towards net zero emissions, panelists considered how the mix of opportunities and challenges on the road to climate stabilization will shape the future of public services.

Speaker Aliénor Rougeot, program manager at Environmental Defense Canada, based in Toronto, highlighted that a just transition for fossil fuel workers and for countries that are disproportionately affected by the climate crisis, was an essential part of reducing carbon. “The just transition in response to the climate emergency allows us to rapidly decarbonise our economy, while ensuring that the workers and communities who would be affected by this rapid decarbonisation have good lives and good jobs in a new economy,” said she declared.

There are two components of a just transition, explained Rougeot. One is to help people who have existing jobs or lives that depend on polluting industries to transition to other sectors, “and that’s where we’re talking about economic diversification, creating new jobs , transition to retirement or retraining people. The second element is to ensure that “those who have been historically affected by these polluting industries or who are historically excluded from good opportunities to work even in these industries” are included in the transition.

Raleigh, NC-based clean energy consultant Diane Cherry said her clients are “all thinking about how to get from where we are to clean energy in the future.” She said the high per capita energy consumption, population growth and lack of a functioning energy market in the southeastern United States sets the region apart from areas like the Northeast and the California in a way that makes it particularly ripe for a just transition policy.

However, the Southeast also faces unique challenges in transitioning to a clean energy economy, such as inconsistent carbon policies across jurisdictional borders and the potential impacts of stranded assets for a population already struggling with rising rates. high poverty.

With natural gas still on the grid, “there’s just a whole host of questions about whether natural gas is going to become a stranded asset like coal has, and what does that mean for the back consumers who are taxpayers,” she told attendees.

Those economic hardships will land in an area where the persistent poverty rate is 13% in North Carolina and even higher in Mississippi, she added. And utilities fear that if coal and gas plants are taken off the grid at relatively short notice and become stranded assets, it will be that much harder to maintain a strong economic base while meeting climate goals aligned with a trajectory of 1.5°C. . While the Southeast has made progress in addressing issues such as transmission and queuing reform, Cherry said, mobilizing sufficient investment to successfully transition the grid to renewables is raising concerns. concerns.

These risks make it difficult to garner public support for a new economy based on renewable energy, Rougeot said. “How do people with so much to lose come to accept that we need a transition?” she asked. “How to get them to want this transition? The response to this challenge starts with creating new job opportunities that are more attractive than current jobs.

She cited the erosion of public trust as a significant hurdle to overcome, adding that policymakers will need to be “more passionate” about a just transition in order to gain public support.

“We are facing a climate crisis, and no matter what we do to mitigate it, there will be extreme events,” she said. “There are going to be extreme situations, and having a population that is divided or that doesn’t trust some of the biggest agencies or the biggest institutions is a super dangerous place as a country and as a world.”

A just transition is also needed globally to help countries that are simultaneously experiencing the worst impacts of the climate emergency and are seen as laggards in global climate action, even though they represent only a tiny fraction. historical and current shows.

“There is a relatively small proportion of countries that have produced the lion’s share of emissions over time. And a whole other group… of countries that are experiencing by far the worst impacts of climate change, not in the future but right now, today, it’s happening as we speak,” said The energy mix editor Mitchell Beer.

Although countries like the United States, Canada and the United Kingdom are responsible for the largest shares of historical emissions – while also being among the largest consumers of fossil fuels per capita – they tend to divert the attention to other countries and minimize their progress towards decarbonization. Panelists singled out India as a country whose per capita emissions are one-tenth the size of wealthier countries.

Panel moderator Parameswaran Kumar, chairman of Kumar Resources Inc., said clean energy investments in countries like India are often undervalued by Western countries. Indian Prime Minister Narendra Modi was met with disbelief from Western countries when he said India would need $1 trillion over the next 10 years to adapt to the climate. However, as Kumar pointed out, this amount is only a fraction of the US$5.9 trillion the world paid out in fossil fuel subsidies in 2020, or US$11.2 million per minute, according to the International Monetary Fund.

Contrary to international perceptions, India is making impressive progress in moving away from fossil fuels, said Rahul Walawalkar, executive director of the India Energy Storage Alliance (IESA) and chairman of the Global Energy Storage Alliance.

“India plans to quadruple its current level in terms of renewable energy deployment by the end of the decade,” he told participants. This degree of scaling is “unprecedented, especially when you’re already scaling over 100 gigawatts.”

India has also increased its installed solar capacity and pledged to invest in green hydrogen and energy storage, Walawalkar said.

Recent developments in the country include increasing solar power generation and a commitment to invest in green hydrogen storage. Walawalkar said the IESA spearheaded a microgrid initiative to reduce system costs by 30 to 50 percent in three years.

“There aren’t too many investments in the energy sector where you can get double-digit returns in most developed countries,” he said. “In India, you can easily get that because the economy is growing and the energy needs are going to increase.”

Whether nationally or globally, improving communication strategies will be important in building public support for the energy transition, Beer said. Utilities and customers will need to view the transition as “opportunity and gain, not loss and pain”, he said, with communications tailored to better meet the specific needs of different groups. .

Noting that going carbon will only become more difficult and costly if it is postponed, he encouraged utilities to focus conversations and messaging on the benefits of renewables and improving energy efficiency.

“There are so many of these benefits arguments that are absolutely real and, frankly, much more real to your investors, stakeholders and customers than the necessarily abstract conversations we often have around climate and energy transition” , did he declare.