When the pandemic hit New York state, Gov. Andrew Cuomo began holding daily media briefings to provide updates and reassurances—and most days, he would challenge New Yorkers to learn the lessons of this unprecedented crisis. As a member of the New York State Climate Action Council, the committee created to achieve the state’s clean energy and emissions targets, I believe it is important we do not let these lessons pass without fully examining our methods of crisis response and applying them to our climate situation.
Quite simply, the pandemic response has been focused on three things: demand, supply, and delivery solutions. To address demand, we focused on slowing the spread of COVID-19. To increase supply, we expanded hospital capacity, and acquired ventilators and protective equipment. To identify delivery solutions, we built alternative supply chains amid global disruption. To translate these lessons, we must think about end-use energy needs, renewable energy development, and transmission and distribution infrastructure holistically.
Government Incentives Drive Outcomes
At the start of the pandemic, demand for medical care dramatically outpaced supply. In response, governments focused on lowering infection rates, worked with hospitals to expand capacity, and offered incentives to help manufacturers produce essential supplies. To mitigate climate change, we must adopt a similar market efficiency model that addresses demand, supply, and delivery in a way that optimizes our energy systems to achieve desired targets.
In New York state, our climate goals are supported by programs and incentives that tend to focus on singular elements of the market, such as increasing supply of renewable energy or reducing demand through energy-efficiency programs. This singular approach to incentives—without fully considering other market issues—presents the possibility of developing system imbalance.
With most incentives targeting renewable development, we should consider how the shifting needs of industrial, commercial, and residential ratepayers will impact demand for electricity. We can’t overlook the importance of managing future electrical demand as we move toward decarbonization. If we reduced demand for electricity, New York state would need less supply to achieve its ambitious 70% renewable energy mix.
The COVID-19 response emphasized reducing strain on systems and increasing the speed of supply delivery where the virus was spreading the fastest. Effective climate mitigation solutions should also factor in these objectives.
In cities where energy usage is the highest, it’s important we focus on load factor. Minimizing the demand peaks and valleys will yield a higher load factor. Flattening this ratio through the use of technology, such as battery storage, will reduce the strain and the amount of energy generation needed to meet demand.
Additionally, we should consider point-of-use, location-based solutions that mitigate the strain on transmission infrastructure. While large-scale solar, wind, and battery farms are labeled as distributed systems, they continue—much like our centralized systems—to rely on an inefficient, aged transmission system. Decentralizing generation and co-locating supply and demand will minimize the need to invest in transmission infrastructure and potentially free up resources for further renewable development.
Amid unprecedented supply chain disruption, the U.S. has largely relied on other nations to manufacture critical equipment to achieve the goals of our COVID-19 response and recovery. As a matter of national security and economic opportunity, we need to bolster U.S. manufacturing. Similarly, our climate targets will be achieved through the purchase of components manufactured outside of the U.S. Of the top 10 solar panel manufacturers and top 10 wind turbine suppliers, only one is U.S.-based.
As large energy consumers, manufacturers tend to bear significant costs for energy programs and initiatives because funding is gathered through rate subsidies and surcharges. New York state should consider policy to provide manufacturers with a more direct return on this investment. The state could require some percentage, such as 50%–75%, of a renewable energy solution be manufactured or assembled in New York state, or at least in the U.S., to qualify for incentives.
As we’ve seen with COVID-19, when manufacturers have access to appropriate incentives, they can quickly adapt to address a crisis. The real value proposition is that climate-engaged manufacturers would have the opportunity to participate in the green economy—turning utility bills into investments, creating jobs, and empowering manufacturers to compete globally.
The Risk of Politicization
As the virus spread, COVID-19 became the focus of conversations from the backyard to the boardroom. With so much attention on this crisis, people were inspired to act and change behaviors. If a fraction of this focus were consistently dedicated to the climate situation, it could spark unprecedented innovation and foster the level of public-private partnership necessary to initiate global change.
We have also witnessed the risks of politicizing crisis response. Many debates about COVID-19 response tactics ignored data and science. Climate change has already been similarly politicized, so perhaps there will be another lesson to gain from whatever comes next in the COVID-19 crisis response. If politics can be extracted and energies refocused on shared responsibility, industry innovation, and public-private partnership, we must revisit this discussion with new learnings to apply to our climate mitigation efforts. ■
—Dennis W. Elsenbeck ([email protected]) is the head of Energy and Sustainability, Energy Consulting Services, with the law firm Phillips Lytle LLP.