Paris accords: The green light for utility transformation
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BY Allen Greenberg Editor-in-chief of EnergyBiz |
Some were sorely disappointed, others drank champagne. But what does the sweeping Paris Agreement really mean?
More to the point, what does the deal to cut emissions across the globe mean for the electric power utility business?
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Actually, not much in the immediate or even mid-term, because the Clean Power Plan and its mandate to cut greenhouse gas emissions, along with other Obama administration regulations, have already made investment in fossil-fuel plants a dubious proposition.
So, does what happened in Paris mean a big lift for renewables?
Well, undoubtedly. It was very much the clear signal investors were hoping for as they weighed whether they should put their dollars in clean energy.
But that in no way leaves utilities on the sidelines. In fact, what it should do is give utility CEOs the courage to push their regulators to approve plans to integrate solar, wind, battery and whatever's next into the grid.
While not a binding deal, the compact struck in Paris is the opening, the sign that utilities can use again and again to justify experimenting and embracing the latest innovations into their rate cases before PUCs across the land.
And so if you're a utility CEO, that means this is now the time to get creative, to push that old envelope, to embrace your inner geek and, yes, maybe even have some fun trying to take that gift that emerged from Pearl Street to the next level.
Can you just imagine being a techie for a utility at the moment? This is a huge moment. This is when the mission moves from delivering something too few appreciate to being part of a shift that promises to help save the planet, as grandiose as that sounds.
One thing this is not is a moment to toss away, to let the Elon Musks of the world misappropriate. You have the know-how, the track record, the right intentions and, yes, even the trust and faith of the public.
All of that is the result of a lot of hard work. So now do the right thing. Make the investment in technology and in people. Push, push hard. Paris is a gift, carte blanche practically, to move forward with confidence that the world is, in fact, ready and willing to stand behind you.
The market value of renewable companies is a fraction of the $5 trillion that coal, oil and gas companies are worth. Paris will no doubt change that equation. But that doesn't mean utility stocks should suffer, not if they exhibit the right mix of business sense and innovation now and in the decades to come.
The Paris accord is the first deal committing the world to take action against climate change. Our utilities, with their millions of customers, now need to take that to heart and commit to taking the lead in making that a reality.
This is, of course, already happening in places like New York, California and Hawaii. Paris will only help it spread, faster and farther.