Released October 15, 2021 | SUGAR LAND
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Written by John Egan for Industrial Info Resources (Sugar Land, Texas)--As electric power providers work to decarbonize their fuel mix, three chief executive officers (CEOs) who have substantially decarbonized their companies' fuel mixes urged regulators and policymakers not to overlook electric reliability in their rush to decarbonize the electricity supply.
The three executives--Thad Hill, president and chief executive at Calpine Corporation (Houston, Texas); Curt Morgan, chief executive at Vistra Corporation (NYSE:VST) (Irving, Texas); and Andrés Gluski, president and chief executive at AES Corporation (NYSE:AES) (Arlington, Virginia)--spoke October 12 on a virtual conference organized by Standard & Poor's (New York, New York).
They also pushed back against the view that natural gas has no place in a net-zero carbon emissions world. Although natural gas gives off about half the carbon dioxide (CO2) of coal when burned to generate electricity, the executives said they expected carbon capture and sequestration (CCS) technology would be installed at gas generators, allowing gas-fired generators to continue operating.
"Gas assets are key to the energy transition," said Calpine's Hill. "You need gas assets to ensure reliability." He said his company was part of an industry investigation of CCS being conducted in the Houston Ship Channel.
"We're a believer in climate change, but you can't get there by focusing only on the electricity business," added Vistra's Morgan. "Putting a price on carbon is the most effective way to decarbonize" an economy.
"Thermal generation is essential," Morgan continued. "As intermittent resources (like wind and solar) increase, there is an increased need for gas-fired generation to ensure (electric) reliability."
"People in the U.S. won't stand for unreliable electricity," Morgan said.
The CEOs did not explore in depth the role battery-energy storage could play in the energy transition, as an alternative to gas-fired generation backing up renewable generation. However, two of the CEOs--AES' Gluski and Vistra's Morgan--remarked that their companies were investing heavily in battery-energy storage, as well as renewables.
Gluski said there has been a "mismatch" between investors and customers when it comes to sustainability: "Customers want reliable, affordable and sustainable electricity." He and the other panelists suggested that in the rush to decarbonize, investors, policymakers and regulators have overlooked, or taken for granted, electric reliability.
Asked by the panel moderator if the power business is sacrificing reliability in its pursuit of decarbonization, Vistra's Morgan said: "Yes, and it is very concerning for me. Climate change is an existential threat, but we cannot take our eye off reliability. We have to be realistic. Some people in Washington, D.C., won't even discuss reliability, and that's troublesome. People won't tolerate rolling blackouts in order to decarbonize" the electric system.
"Reliability is absolutely critical and has been de-emphasized in recent years," Morgan asserted. "Policy choices like closing nuclear plants and denying gas pipelines have an impact on the energy transition."
Calpine's Hill agreed, adding that "decarbonization means electrification, but the policy has gotten ahead of the research. As economies decarbonize, they must deal with transportation. Only 9% of California's carbon emissions come from electric generation, buy 42% comes from transportation. It is essential that decarbonization deal with transportation."
He said 4,000 megawatts (MW) of solar generation, plus a lot of storage and electrolyzers, would be needed to equal the reliable output of a 500-MW gas plant.
"Decarbonization of gas generation through CCS will be a big part of the energy transition," Hill said. "CCS is a very important part of the energy transition."
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn.
The three executives--Thad Hill, president and chief executive at Calpine Corporation (Houston, Texas); Curt Morgan, chief executive at Vistra Corporation (NYSE:VST) (Irving, Texas); and Andrés Gluski, president and chief executive at AES Corporation (NYSE:AES) (Arlington, Virginia)--spoke October 12 on a virtual conference organized by Standard & Poor's (New York, New York).
They also pushed back against the view that natural gas has no place in a net-zero carbon emissions world. Although natural gas gives off about half the carbon dioxide (CO2) of coal when burned to generate electricity, the executives said they expected carbon capture and sequestration (CCS) technology would be installed at gas generators, allowing gas-fired generators to continue operating.
"Gas assets are key to the energy transition," said Calpine's Hill. "You need gas assets to ensure reliability." He said his company was part of an industry investigation of CCS being conducted in the Houston Ship Channel.
"We're a believer in climate change, but you can't get there by focusing only on the electricity business," added Vistra's Morgan. "Putting a price on carbon is the most effective way to decarbonize" an economy.
"Thermal generation is essential," Morgan continued. "As intermittent resources (like wind and solar) increase, there is an increased need for gas-fired generation to ensure (electric) reliability."
"People in the U.S. won't stand for unreliable electricity," Morgan said.
The CEOs did not explore in depth the role battery-energy storage could play in the energy transition, as an alternative to gas-fired generation backing up renewable generation. However, two of the CEOs--AES' Gluski and Vistra's Morgan--remarked that their companies were investing heavily in battery-energy storage, as well as renewables.
Gluski said there has been a "mismatch" between investors and customers when it comes to sustainability: "Customers want reliable, affordable and sustainable electricity." He and the other panelists suggested that in the rush to decarbonize, investors, policymakers and regulators have overlooked, or taken for granted, electric reliability.
Asked by the panel moderator if the power business is sacrificing reliability in its pursuit of decarbonization, Vistra's Morgan said: "Yes, and it is very concerning for me. Climate change is an existential threat, but we cannot take our eye off reliability. We have to be realistic. Some people in Washington, D.C., won't even discuss reliability, and that's troublesome. People won't tolerate rolling blackouts in order to decarbonize" the electric system.
"Reliability is absolutely critical and has been de-emphasized in recent years," Morgan asserted. "Policy choices like closing nuclear plants and denying gas pipelines have an impact on the energy transition."
Calpine's Hill agreed, adding that "decarbonization means electrification, but the policy has gotten ahead of the research. As economies decarbonize, they must deal with transportation. Only 9% of California's carbon emissions come from electric generation, buy 42% comes from transportation. It is essential that decarbonization deal with transportation."
He said 4,000 megawatts (MW) of solar generation, plus a lot of storage and electrolyzers, would be needed to equal the reliable output of a 500-MW gas plant.
"Decarbonization of gas generation through CCS will be a big part of the energy transition," Hill said. "CCS is a very important part of the energy transition."
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn.
