On October 25, Energy Innovation CEO, Hal Harvey, participated in The New York Times’ Global Forum Asia, hosted in Singapore by columnist and author Thomas Friedman. Prominent technology leaders and executives came to the Forum to discuss the changing infrastructure in our digital era, and the role for global businesses in this “next new world.” In Hal’s interview, “The Clean Energy Race,” he and Tom discussed global impacts of climate change, the potential for a clean energy future through technology innovation and policy, and the prospects for natural gas and utilities.
Earlier this month, the Intergovernmental Panel on Climate Change reported with high confidence that earth’s climate is changing, it is influenced by humans, and the impacts are accelerating. Extreme weather events are becoming more common occurrences. Hal noted the extremely high levels of air pollution that were recorded in northern China in October, emphasizing the idea of disaster prevention rather than remediation. Innovative technologies and progressive policy can both reduce human’s contribution to climate change and make society more resilient to the impacts that will persist.
Deployment of renewable energy technologies, namely solar and wind, has skyrocketed in recent years. This was largely due to declining prices, which occur when production scales up (as seen with China’s enormous production) or policy removes financial barriers (as seen with Germany’s feed-in tariffs). Energy efficiency technologies have also substantially reduced the amount of energy we consume in the first place. New efficiency technologies that optimize entire energy-using systems (like cars or buildings) are underway. Despite the growth of renewable energy and efficiency, it will still take years for most economies around the world to catch on and adopt these practices to a meaningful extent. As a result, natural gas may temporarily replace fossil fuels as a step towards reducing greenhouse gas emissions and adopting zero-carbon energy sources.
When burned, natural gas emits half the carbon dioxide as coal. However, natural gas is mostly composed of methane, a much more potent greenhouse gas than carbon dioxide. If even a small percent of natural gas is leaked throughout its entire production process, it can be just as bad, or worse, than coal for climate change. While methane leakage is serious, it can be effectively addressed by strong regulations and a new ‘race to the top’ energy paradigm, in which best practices give companies a competitive advantage. Hal argues that there is an important role for state public utilities commissioners to make sure that natural gas is used as a bridge fuel; or “a gift that makes it cheap to move to a clean energy future… not just three more decades of addiction.”
Utilities will also have a special role to play in the future energy landscape. Currently, renewable energy and efficiency threaten the traditional business structure of utility companies. A handful of utilities recognize this, and are shifting their role from being a seller of electrons to that of a system optimizer. As more variable energy sources come online, utilities can offer back-up services to ensure there is always enough dispatchable energy to meet society’s demand. Utilities can also escalate their role in reducing demand by offering services that shift or dampen customer demand for energy during peak hours of the day. Utility companies in Europe have already begun to shift their roles in this direction, and other parts of the world are beginning to catch on.