Climate Change Driving Electric Industry Evolution

The electric utility industry is pursuing business innovation and technological advances in order to address climate change, according to the Edison Electric Institute (EEI).

Addressing the Wall Street financial community, EEI President Tom Kuhn provided an overview of the industry as it faces reducing emissions from electric generation, the need for new infrastructure in the face of increasing electric demand, greater costs for construction materials and labor, and an imperative for industry-led conservation and energy-efficiency programs.

Growth in demand has led to an acute need for more generating capacity and transmission infrastructure, but the backdrop continues to be climate change and the need for reducing emissions, Kuhn said.

"Realistic carbon reduction targets and harmonizing those targets with the development and commercialization of the needed technologies (nuclear, carbon-capture and storage for coal-based generation, natural gas and renewables) to reach those targets will be essential," he said. "An upper limit on the price of carbon emission allowances, an economy-wide focus, utilization of carbon offsets and meaningful participation by developing nations also will be very important."

Increased demand has led to strong financial performance on the part of utilities during the past five years, with the EEI index of companies producing an average 20 percent annual return during that time.

Some of the solutions Kuhn looks to for a reduction in the carbon foot print are the widespread commercialization of plug-in hybrid vehicles, adding energy efficiency to utilities' portfolios of resources and renewable resources with new transmission infrastructures.

Traditional generation resources - coal, natural gas and nuclear - will remain important, both in maintaining short-term reliability and affordability as well as meeting future demand, Kuhn said.

---

---

---

Related Topics: