U.S. Electric Power Sector at a Crossroads Says New Ceres Report
“Changes underway in the 21st century electric power sector create a level and complexity of risks that is perhaps unprecedented in the industry’s history.”
That’s the word from Ceres, is a national network of investors, environmental organizations and other public interest groups working with companies and investors to address sustainability challenges such as global climate change.
In a report released this month titled, "The 21st Century Electricity Sector: Positioning for a Low-Carbon Future," Ceres talks about the trends that are re-shaping U.S. electricity today and highlights the impact of the most significant trend: attitudes and action on climate change.
The report zeros in on the five key elements that will determine the success of a utility in today’s business environment.
Change is in the Air -
- climate change, to be specific.
Climate change is the central issue in our global environment and economy today. Clean and efficient energy policies are gaining momentum in states across the country. Reducing greenhouse gas emissions is likely to become a national priority through federal action in the near-term, which will result in increased costs of production from traditional fossil fuel resources. The increasing attractiveness of renewable energy technologies with steadily decreasing production costs, and advances in other technologies like the Smart Grid, are also changing the way utilities do business.
Given these trends, the Ceres report emphasizes the fact that electric utilities, which in the U.S. are responsible for 40 percent of carbon emissions, must pay attention to their carbon footprint if they are to remain competitive.
Power Industry Makeover Needed
According to the report, “responding to these trends is nothing short of a fundamental rethinking of how we produce, transmit and use electricity.”
Providing a blueprint for making this radical transition, Ceres highlights five key elements that utilities are increasingly focusing on to address climate change and other trends that are shifting the landscape of today’s electric power sector. They are 1) managing carbon across the enterprise; 2) pursuing all cost-effective energy efficiency; 3) integrating cost-effective renewable resources into the generation mix; 4) incorporating smart grid technologies for consumer and environmental benefit, and; 5) conducting robust and transparent resource planning.
Notably, the report highlights cost-effective energy efficiency as the best way to reduce greenhouse gases and lower customer bills, and point to a radical change of course necessary to reverse what it states as historic underinvestment in energy efficiency.
Shaping a New Energy Future
The challenges laid out for the future of the electric power sector in this report may seem daunting, but Ceres emphasizes this as a time for reinvention and renewal.
Now is the time for the industry to shape a new energy future– a future that, as the report emphasizes, “minimizes cost, risk and environmental impact, and maximizes opportunity, options and societal benefit.”