Everyone, it seems. From Bloomberg Businessweek to Rolling Stone, from ELECTRIC POWER (EP) to Platts Global Power Markets conferences, this spring everyone was talking about climate change. The topic is no longer taboo, even among executives of power companies.
More than a dozen years ago, former BP CEO John Browne may have been among the first in the energy industry to talk publicly about the threat of climate change and industry’s responsibility to participate in addressing that threat, but these days, there are few climate change deniers among industry leaders. Even when they disagree about the degree to which human activity causes climate change or express legitimate concern about the costs of reducing emissions of greenhouse gases (GHGs), those responsible for both quarterly earnings and long-term business sustainability (both economic and environmental) are learning first-hand why they need to both talk about and act in response to climate change.
Recent media and event coverage of the matter has had as much to do with responses to climate change effects as with national and international climate reports or anticipated U.S. Environmental Protection Agency (EPA) GHG rules. While regulatory entities develop GHG-reduction policies aimed at limiting climate change, countries, utilities, and enterprising companies are already making adaptive changes in response to current climate change consequences. Some may profit; others will pay.
Talking Winners and Losers
“The world’s failure to take meaningful action on climate change may one day be seen as the gravest mistake of our time,” began an unsigned editorial in the Apr. 14 Bloomberg Businessweek. Three weeks later, the same magazine ran an article about how Greenland hopes to profit from easier access to minerals, thanks to its swiftly melting ice sheet. Aleqa Hammond, the country’s first female prime minister, is spearheading efforts to mine everything from gold, platinum, diamonds, and rubies to zinc, iron, uranium, and rare earth minerals.
Though Greenland may become a “net winner”—many of its 56,000 residents will have to move from proposed mining locations sooner, and from coastal areas a bit later—many more nations and people face myriad challenging consequences, which is why utility executives are talking openly about responding to climate change (see “Lessons in Resiliency and Risk” in this issue).
Acting to Limit Climate Change
For the U.S. power industry, June is expected to be the month when the EPA releases its final rule on GHGs emitted by existing fossil-fueled power plants, and Administrator Gina McCarthy has been point person for that effort. As Rolling Stone magazine described her in its May 8 article, “Obama’s Last Shot,” she “has a kind of gruff charm that suggests she’s anything but a tree-hugging elitist.”
With her blue collar Boston background, McCarthy has more in common with coal miners and coal plant workers than with the well-heeled lobbyists on both sides of climate change politics, so I take her seriously when she says (and as many in this industry have confirmed) that the EPA has listened carefully to concerns that the GHG regulations for existing plants need to be flexible—both to ensure grid reliability and to minimize economic impacts. (This issue went to press before release of the final rule, but we’ll be examining its implications, and legal twists and turns, over the coming months in print and online.)
Threats to Generation
Climate change isn’t just a threat to coal-fueled power plants because of recent and anticipated regulations. It’s also a threat in many less-predictable ways, from constrained water availability to extreme weather events that may damage a plant itself or make fuel delivery impossible.
Utilities like Louisiana-based Entergy and New Jersey’s Public Service Electric & Gas (PSE&G) that have recently had to cope with unusually severe hurricanes are learning to adopt new prevention, mitigation, and recovery strategies. PSE&G Chairman, President, and CEO Ralph Izzo has been quoted as saying, “Climate change is the preeminent issue of our time, with the power to transform both our company and our industry.” PSE&G has a multipronged carbon-reduction strategy but also planned to spend $2.6 billion to harden its infrastructure (the Board of Public Utilities approved much less, closer to $1 billion, in early May). And in February, New York regulators required ConEd to factor climate risks into all its forward planning and implement state-of-the-art measures to protect its system from those risks. Over the next four years, ConEd plans to spend $1 billion on storm hardening and resiliency measures.
Meanwhile, the vendor community is introducing new tools to help address intensifying challenges. Just two examples are Schneider Electric and Space-Time Insight. Schneider Electric provides independent, location-specific weather forecasting services that range from load prediction to determining safe times to erect and perform maintenance on wind turbines. Among the technology products provided by Space-Time Insight is one that helps utilities predict where their grid might fail during severe weather and identify where repairs are needed after such events.
Climate change–intensified severe weather can wreak as much havoc on renewable power generation as on fossil or nuclear generation. Stepping up to develop and deploy cost-effective and technically viable solutions to reducing GHG emissions (especially those that don’t incur a water use penalty) while also hardening infrastructure and preparing for post-event restoration are the responsibilities of those involved in all forms of electricity generation, because climate change doesn’t care what your politics or beliefs are, nor what technology provides the electrons that power your computer and refrigerator. ■
— Gail Reitenbach, PhD is POWER’s editor (@GailReit, @POWERmagazine).