A new survey reveals that less than half of U.S. utility companies are taking steps to reduce emissions, despite roughly 90% citing that activity as a high or moderate priority.
The “yawning gap” between climate concerns and actions revealed in the report by Virginia-based consulting firm ICF International “indicates leaders know they need to do ‘something,’ but either don’t know what to do or can’t implement a strategy due to lack of capital or regulatory support,” writes E&E News.
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ICF’s survey of190 utility executives found that only 38% had active plans for decarbonization, while 61% said they were in the midst of developing a strategy or would be in the next five years.
The survey took place before the recent U.S. Supreme Court decision that hamstrung the Environmental Protection Agency’s authority to regulate greenhouse gas emissions, and also before renegade Senator Joe Manchin (D-WV) sounded the death knell for President Biden’s climate agenda. The federal-level standoff has brought more scrutiny to states’ and utilities’ efforts to decarbonize, and the survey “sheds light on some of the challenges utilities are facing in a transition away from fossil fuels,” E&E says.
The executives cited lack of capital and concerns that regulators would not allow rate increases to cover clean energy investments as two of the barriers to reaching clean energy targets. ICF said those concerns “could reflect a lack of confidence in how to move forward.”
“Utilities are moving as fast as public policy will support,” said ICF senior fellow Val Jensen. “They can’t get ahead of their regulator.”
Another hurdle may be regulators’ unfamiliarity with rate increase requests for reducing carbon emissions, compared to the more standard requests for investments to keep power systems secure, Jensen added. Ironically, potential investments for a clean energy transition are also being weakened as utilities are pressed to divert funds to fortify energy systems against increasingly severe weather events.
“There’s a natural concern about the affordability of this,” he said.
Though utilities have lowered emissions by 35% from 2005 levels—the starting point for Biden’s climate goals—the future pace of reductions is uncertain. According to one recent analysis of decarbonization in the U.S. Southeast, utilities’ investment and operating outlooks point toward slower carbon reductions in the future.
As Atlanta-based consulting firm ScottMadden Inc. reported last year, utilities are faced with balancing aggressive decarbonization plans against affordability.
“Scenarios with deep carbon reductions often require accelerating the addition of renewable energy and battery storage capacities. Some also considered technologies that are not yet cost-effective, like long-duration storage, small modular nuclear, or carbon capture technology,” the ScottMadden report said. “Each option carries its own set of risks.”
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