There’s a growing push to electrify ever larger parts of the American economy and decarbonize our energy systems, which presents abundant opportunities to unlock reliable, cleaner energy solutions for future generations. The nation’s competitive power suppliers have been committed to this objective for some time and their investments reflect that commitment. As the call to decarbonize grows louder each day, the competitive power sector is ready to act and already doing so – while also working to ensure above all that electricity remains reliable and affordable throughout the energy transition. This massive undertaking will not be without its challenges, but its benefits far outweigh the obstacles we will encounter on the path to a more reliable, affordable, and sustainable energy future.
EPSA President and CEO Todd Snitchler was recently featured in a film produced by The Rational Middle titled, “Electrifying America,” in which he outlines key considerations from the power sector as the energy transition advances. The Rational Middle is a project intended to spark thoughtful, fact-based conversations that unite us in developing economic, cultural, and social solutions for all, despite our differences. Alongside multidisciplinary power and energy experts from academia, industry, and more, Todd offers insight into how the power sector is working in step with calls to decarbonize and electrify power systems nationwide.
A Shifting Resource Mix
In any conversation about the future of electrification of our grids, it is key to examine how the push for impact reduction has spurred changes in both consumer and industry behaviors. “[Decarbonization of the power sector] is forcing consumer behavior to change, it’s forcing generator behavior to change, and it’s driving investment dollars in different types of resources,” he notes. Snitchler traces the journey of our modern grid as we know it by outlining the shift from coal to lower-emitting resources. “What was once a grid that was dominated by coal-fired generation – the balance being nuclear with some modest amounts of natural gas – has now flipped and on average, natural gas is the largest generating resource across the country. Coal has dropped, nuclear has held pretty steady, and you’ve seen a rapid increase in the amount of renewables that has been deployed.”
New Demand for Power Generation
A more electrified grid will place new demands on power generators and electric systems. According to the National Renewable Energy Laboratory, electrification will increase 2050 U.S. electricity consumption by 20-30% by 2050 – with impacts to peak demand and timing and the needs of the power grid. As demand grows, firm, flexible and low-emitting resources like natural gas will be needed to support the growth of intermittent renewable power. A 2020 study EPSA commissioned from Energy + Environmental Economics (E3) found that 50-90 GW of firm, flexible natural gas generation will be needed to maintain system reliability in PJM Interconnection through 2045 – even under deep decarbonization scenarios. These reports make clear that the energy transition will require a “both/and” and not an “either/or” approach to ensure sufficient, reliable energy to meet the demands of the future. By delivering that power with the risk born by developers, shareholders, and investors – and and not captive customers – we can help ensure that the risks are shifted to those best able to bear them and away from customers who have no alternative but to pay those costs as part of their monthly utility bill.
A Just and Equitable Transition
America’s competitive power sector emphasizes equity as a critical consideration in the energy transition. In other words, a successful energy transition is a just one. “Consumers are willing to pay something – the number changes based on where they are relative to income level,” says Snitchler. “You have folks who are working to make ends meet and they’re very concerned about whether they can afford to pay their electric bill. There are some questions about equity, and how we can be sure that the public will support and afford to pay for it as we look at medium- to longer-term planning.”
“We have the technology and the ability to get most of the way there,” Snitchler says toward the end of the video. He poses an important question as we look ahead to our climate goals over the next few decades. “The question will be, ‘Where does the aspirational goal of emissions reduction meet the willingness of the public to pay and the ability for the system to be converted to that future state with a different set of resources operating in a little different fashion that it does today?’”
Watch the full video here.