B4E, the Business for Environment Global Summit, is the world's leading international conference for dialogue and business-driven action for the environment. The summit addresses the most urgent environmental challenges facing the world today. Important topics on the agenda include resource efficiency, renewable energies, new business models and climate policy and strategies. CEOs and senior executives join leaders from government, international agencies, NGOs and media to discuss environmental issues, forge partnerships and explore innovative solutions for a greener future.
Guy has been involved in the energy sector since 1984 working initially in the oil and gas industry as an exploration geologist for Amoco before joining the newly formed PowerGen in 1990. At PowerGen Guy worked initially in the UK core business before transferring to be part of the International expansion of developing conventional power stations in Portugal, Germany and Eastern Europe.
Pete is the Programme Director for Transport at the European Climate Foundation, where he has worked since 2011. Prior to that, he spent 10 years analysing and reporting on politics, business and markets for the international newswire Reuters. Since 2008, he has been living in Brussels, focusing on the European politics of climate and energy. He has published several books and papers on ecology, travel and communications.
By David Lanham
This article was originally published on Alliance to save Energy and is republished with permission.
Does any low-hanging fruit remain for energy efficiency improvement? This was the question posed by Alliance to Save Energy president Kateri Callahan at the onset of our recent congressional briefing. The answer – reinforced by the perspectives of our event panel speakers – is a resounding yes. The fruit of the “grid edge” offers novel approaches to energy efficiency improvement. But this begs the question: what is the grid edge?
Depending on who you talk to, the grid edge could either be the future of a modern and efficient energy system or fizzle out like so many other ambitious concepts. The term “grid edge” refers to the hardware, software and business innovations that are increasingly enabling smart, connected infrastructure to be installed at the 'edge' of the power grid. The phrase “edge of the power grid” refers to the proximity to end-use customers (at their homes, businesses or at distribution systems very close to both) rather than at power plants or along transmission lines.
On July 14, we hosted our latest congressional briefing – Grid Edge: The Role of Energy Efficiency in a Modernizing Energy System – to explore the topic. Read on to learn about the perspectives of our panelists and stay tuned for more updates from the Alliance to Save Energy as grid-edge technologies continue to advance and evolve.
Supporting a modern energy system: what energy policies and regulations are needed?
With government leaders in the United States and around the world taking action to address energy and climate issues and the line becoming increasingly blurred between energy suppliers and users, panel moderator Kelly Speakes-Backman, the Alliance’s senior vice president of policy and research, asked panelists: What energy policies and regulations are needed to support a modern energy system?
According to Electric Drive Transportation president Genevieve Cullen, it is necessary for stakeholders to work together to advance technology and policies that allow electricity to power the economy. Cullen explained that the grid’s ecosystem needs to be flexible and that new players need to be recognized without being undermined – whether they be generators, storage participants or customers. Expanding upon this, Cullen explained that it is necessary for industry stakeholders to work together to advance technologies and policies that allow electricity to thrive as a power source. The blurring of lines in the power system is inevitable due to emerging technology, and the jurisdictional challenge of FERC and states reflects changes in the market and technology.
PG&E’s vice president of federal affairs and policy and chief sustainability officer Melissa Lavinson, whose company serves 16 million customers, made the important point that customers want to take control, be more engaged and be a part of the energy revolution. Further, Lavinson explained that in a world that’s becoming increasingly decarbonized and digitized, aligning incentives that encourage innovation and partnership to deploy grid edge innovations will be key. Lavinson explained that aligning regulatory structures – including incentive implementation and using scale to buy down cost – has been essential in making certain deployments successful. Pointing out that the system currently in place will eventually become untenable, Lavinson urged partners in the policy realm and regulatory structure to work closely with industry to accelerate the evolution of today’s integrated model.
Panelists agreed on the high value of education for stakeholders throughout the grid ecosystem. Cullen, describing the importance of education in overcoming energy obstacles, explained that customers benefit as power management information becomes increasingly available. Lavinson added that energy usage education is integral for PG&E, with big data and smart meters at the heart of their operations. Improvement of two-way communication helps everyone understand energy use, which can ultimately help encourage logical behavioral changes.
Keynote remarks: grid edge and utilities of the future
Providing keynote remarks for the event, David Nemtzow, acting director and senior strategist at the Building Technologies Office within the U.S. Department of Energy (DOE), brought up the often mentioned but nonetheless astounding fact that buildings account for 40 percent of energy use in the U.S. and 75 percent of electricity use. Nemtzow explained that there are many facets of efficiency that can be addressed to decrease buildings’ energy use. An example of this, he pointed out, is air conditioning. DOE is focusing an upcoming report on the topic, addressing the enormous amount of energy used by air conditioning, peak energy scenarios and refrigerant leaks – particularly relevant with the day’s briefing occurring during one of the hottest days of the season in Washington, D.C.
Nemtzow described the necessity of moving beyond the mindset of “we can” to “we will” in the field of grid edge. With the need for advanced sensors and controls, codes and standards can “lock in” the benefits of grid edge technology. Nemtzow pointed out that, in order to be successful in advancing opportunities available through the grid edge, we must be collectively smart and communicative. When we all consider how to manage and improve the grid and reduce carbon emissions, we can find success through innovation together.
How are advanced building technologies, distributed energy resources and connectivity impacting the grid edge?
Reflecting on how far we’ve come and the progress still to be made, the Alliance to Save Energy’s director of research, Kevin Lucas, opened the event’s second panel by posing a question to panelists: How are advanced building technologies, distributed energy resources and connectivity impacting the grid edge?
Discussing a complementary term for the grid edge, Joe Hagerman, senior policy advisor for the Building Technologies Office within the Department of Energy, described DOE’s focus ontransactive energy and markets. Hagerman explained that as solutions emerge for increasing the efficiency of behind-the-meter technologies, DOE is keenly focused on ensuring the buildings-to-grid ecosystem remains robust and can attain scale with minimum interference. He discussed five main focus categories: characterization of connected equipment (a corollary to equipment standard test protocols), interoperability (convening market players to ensure equipment works together), cyber security (both high level (i.e. buildings and grid) and low level (i.e. device)), establishing valuation methods (monetizing advanced controls and equipment performance through markets), and core R&D (developing algorithms to better utilize controls and systems, working up to the scale of whole campuses).
Hagerman noted that the market will be key to solving the first four areas (although the federal government can help convene core institutional areas to help the market ‘solve’ the problems), but spoke more to DOE’s efforts in core R&D. Areas in which DOE is working include utilizing entire buildings as a “virtual battery” to reduce energy storage requirements, controlling loads to extend or reduce transformers losses and increase their lifetimes, and developing algorithms to optimize economic dispatch of building demand, site-installed distributed energy resources, and generation without impacting user comfort or operation.
Speaking to innovations in the building sector, Nest’s East Coast Energy Partnership’s David Bend, described Nest’s commitment to enabling the thoughtful home, using their motto to take care of the people inside of it and the world around it. After decades of certain home components appearing the be “unloved” by the buildings industry, Nest has focused on innovations that lower consumer utility bills and contribute to a more manageable grid. Now, according to Bend, consumers can enjoy improved energy performance from Nest sensors in the range of 15 percent savings on the warming side, and 12 percent on the cooling side. From a macro level, Nest is working with companies to produce seasonal savings.
Keying in on the benefits of connectivity and big data, Weatherbug vice president Dave Oberholzer shared an incredible fact: Weatherbug possesses over 10,000 sensors to gain insight into efficient use of energy based on weather and climate scenarios. As these sensors update data every 2.4 seconds, Weatherbug possesses a treasure trove of information that is invaluable in understanding how the components of the energy ecosystem can react efficiently to external weather conditions. Oberholzer explained that as the world becomes more and more connected, it makes sense to pursue the aggregation of data from thermostats, hot water heaters and washers/dryers.
Concluding the final panel of the event, Enbala CEO Bud Vos reiterated the importance of optimizing the energy system’s ecosystem. According to Vos, if we could figure out how to bring together the ecosystem of energy products, we could save gigawatts of energy. Further, Vos explained that software is the key to this optimization, the cornerstone of Enbala’s work. Upgradeable technology and open standards will move us along toward this optimization of the power system, with Vos noticing these trends already heavily underway.
By Iain Watt
This article was originally published on Forum for the Future and is republished with permission.
The Committee on Climate Change isn’t the only organisation trying to draw attention to the risks associated with climate change.
Here at Forum for the Future, as we grapple with the gargantuan challenge of limiting global warming to 1.5°C, the need to build greater awareness of the risks (and indeed the opportunities) that climate change poses has become ever more central to our work. Why? Because, if we are to have a chance of remaining within 1.5°C then we need to mobilise the business community to not only tackle their own emissions, but also to become vocal and effective advocates for widespread societal action on climate change. Yet this will only happen once they really understood the potential risks associated with climate change.
And, make no mistake about it, the risks posed by climate change are huge!
If we cross the 1.5°C or 2°C thresholds, then the resulting geophysical change will put huge stress on the global economy. Alternatively, avoiding 2°C – never mind 1.5°C – will require the rapid and complete transformation of the global energy, transportation and agricultural systems.
Either way, climate change, and the societal response to climate change, are going to transform the competitive context in which all companies operate. Yet, awareness of climate risk remains worryingly low.
We’re therefore working with our Partners to build understanding of climate risk – and to help them design strategies that protect their business (as well as the biosphere).
We’ve found the following diagram to be a useful starting point. It not only illustrates the wide variety of risks that climate change poses (the wedges), but also highlights the fact that these risks do not just apply to corporate assets and operations – but also to supply chains, markets, and the public infrastructure and social cohesion upon which all companies rely (the circles).
We need big-picture thinking and action
In our experience, a reluctance to think beyond the direct ‘corporate boundary’ is one of biggest gaps in corporate awareness of climate risk. (Which is why it’s great to see the Committee on Climate Change stress the risks to public infrastructure).
To offer a rather blunt example: imagine a business involved in agricultural production at, or below, sea level. They might spend a lot of effort and money protecting their land against sea level rise. Yet, if rising sea levels disrupt the roads and ports upon which they depend, then these investments will have been in vain.
While some pioneering companies have indeed thought through the potential impacts of climate change in a systemic way, a number still focus narrowly on the potential physical impacts on corporate assets. Further, in so doing, too many companies then solely consider the ‘central estimate’ of future climate projections – rather than the more extreme scenarios that present the most risk.
As a result, many companies falsely reassure themselves that they are protected against climate risk, when, in fact, they’ve barely scratched the surface.
8 simple rules
So what to do about it? Well, first of all, use the diagram above to start thinking about how your company might be exposed to climate risk – and get in touch if you’d like Forum for the Future to help you!
Secondly, bear in mind the following ‘ground rules’:
1. Climate change will not only impact corporate assets and operations – it will also impact supply chains, markets, workforces, and the broader infrastructure upon which they depend.
2. It is important to consider the widest possible range of impacts, including low-probability outcomes with potentially large consequences.
3. As well as posing discrete risks of its own, climate change will interact with and exacerbate other risks (e.g. relationships with government and/or commercial partners, or the availability and efficiency of labour).
4. Current climate impacts/trends are not a reliable indicator of impacts-to-come – the future will be more disruptive, and will include ‘surprises’ as well as trends.
5. The corporate approach to climate risk must therefore be dynamic and adaptive.
6. Climate change poses significant enough risk to mandate regular consideration and discussion at senior management and board level.
7. A consideration of climate risk must be built into standard business management processes and embedded across all corporate divisions (i.e., it cannot be the sole responsibility of the sustainability team).
8. No one company acting alone can truly ‘protect itself’ against climate risk. Partnership and collaboration – pre-competitive, in and across industries, and with government and communities – will be key.
By FRANK JOTZO
This article was originally published on Corporate Knights and is republished with permission.
Can Malcolm Turnbull do climate and energy policy now?
The re-elected Coalition government has the opportunity to revamp its policies on climate change. Transition of the energy sector is key if the 2030 emissions target is to be met. But with a razor-thin majority in Parliament, will Prime Minister Malcolm Turnbull have the appetite and internal authority to tackle the challenge?
In contrast to the past three federal elections, climate change policy was not one of the big issues in this campaign. Faced with a fairly comprehensive climate policy blueprint from the Labor Party, the Coalition opted not to say much on the subject. A carbon tax and emissions trading scheme have been ruled out, but the door for climate and energy policy reform has not been slammed shut.
In fact, there has been a clear sense that the government accepts that there needs to be a more comprehensive policy framework than just the subsidy-based Emissions Reductions Fund, with its inherent problems. In 2015, Environment Minister Greg Hunt announced that there will be a climate change policy review during 2017.
But the internal politics of the Liberal Party could yet stand in the way. Turnbull has traditionally supported measures to cut emissions, and this fits with his emphasis on innovation. But many on the right of the party oppose action on climate change.
The fact that the Coalition only just scraped into government might be seen as an argument in favour of more moderate policies. But it could also strengthen the hand of Turnbull’s detractors, including opponents of climate change action.
Is that a price on your carbon?
One tricky issue for the Coalition in the election was the plan for the Emissions Reductions Fund “with safeguards”. In the expert community it is generally thought that the Coalition’s plan has been to transform the current mechanism into a so-called “baseline and credit” scheme or a variant thereof.
Baseline and credit would put a price signal on carbon emissions in electricity and possibly industry. It has drawbacks compared with normal emissions trading, among them that there would be no revenue for the government from selling carbon permits; that it would not fully reflect carbon costs to electricity users; that some or many businesses may not be covered; and that it may perpetuate carbon-related investment uncertainty. Its main attraction is political – it would limit effects on electricity prices, and it has been depicted as something that is not a “carbon price”.
The energy challenge is of an altogether different magnitude. Climate policy needs to be integrated with energy policy, and it must get the transformation of Australia’s power sector under way. As the Deep Decarbonisation project showed, a near-zero-emissions electricity supply by 2050 is at the heart of a low-emissions strategy.
This is possible and affordable, but waiting for it to happen all by itself would take too long.
Unless there is a significant and durable price on carbon, other approaches are needed to get the most emissions-intensive power plants off the system – for example, through a market mechanism for brown coal exit and/or regulated closure of old plants.
Support for new zero-emissions energy is a big open question. Will the Renewable Energy Target be extended, perhaps as a low-emissions energy target? Will there be fixed-price auctions for large-scale renewable energy, such as those in the ACT? Should funding for clean energy research and development be ramped up, and how?
Then there are questions about energy market reform and structural adjustment. How to provide adequate revenue for a future power system that largely relies on renewables, when the existing electricity market was designed for fossil-fuel-powered generators? How to manage the social and economic adjustment in the coal regions?
The government will need to tackle energy transition, and it has the opportunity to make this one of its contributions to help modernise the economy. There might even be some common ground for it in parliament.
Marginal policy change is not going to do the trick. Australia’s pledge under the Paris Agreement is a 26-28 per cent reduction in emissions by 2030, relative to 2005. This is at the lower end of the range, according to many indicators, and it is likely that the target will need to be strengthened for the next round of international pledges.
Labor’s proposed target is a 45 per cent reduction. This is on the way to much deeper required reductions down the track.
Achieving even a 28 per cent target through domestic reductions would be a big step for Australia. Net national emissions have been roughly flatlining for more than two decades, thanks to falling emissions from land-use change.
Brexit, Trump and the future
Amid the current global destabilisation, there are concerns that climate policy will take a back seat despite the momentum created by the Paris Agreement. In Europe, Brexit, terrorism and refugees are top of the agenda. But unless they herald a global shift towards inward-looking governments or wider economic malaise, Europe’s troubles should have little bearing on the transition to cleaner energy in Asia and Australia.
A Donald Trump presidency, on the other hand, could throw a spanner in the works by providing a rallying point for opponents of climate action. Hillary Clinton as president, however, would push for meaningful climate policy both globally and at home.
Those determined to push ahead will do so regardless of the to and fro in Europe and the United States. China, for example, seems unlikely to waver in its push to modernise its economy and thereby dampen carbon emissions.
Turnbull has a chance to help position Australia for a future in which the carbon-intensive way of doing things is on the way out. We will see whether he chooses to do so – and whether his party room will let him.
© Copyright 2013. B4E Summit by Global Initiatives. All rights reserved.