SPEAKERS
Michael Morris Chairman, President and CEO American Electric Power	Jim Barry Chief Executive Officer NTR
John Deutch Institute Professor Massachusetts Institute of Technology	Tim Healy Co-Founder, Chairman and CEO EnerNOC, Inc
Philippe Joubert Executive Vice President, Alstom Group, President, Alstom Power Systems Alstom Executive Interview	Daniel Yergin CERA Chairman, CERA (Chair)

The CERAWeek Plenary for Friday, Power Day 2, looked at the perils and promise of clean energy investment, introduced by CERA Chairman Daniel Yergin, who promised a 360 degree perspective with panelists from the generation, demand management, large-scale development and technologies, academia, and renewables sectors.

Michael Morris, Chairman, President, and CEO, American Electric Power, said that technological answers “can bring us clean energy as we go forward, no matter what fuel we select.” He cautioned against a crisis mentality that produces ill-conceived solutions, including the costly “dash to gas.” The effects of a lack of energy investment in Mexico and South Africa are warnings; the United States will face an electric capacity shortage in the next five to ten years. He cited the need to retrofit, not shut down, the existing coal fleet; maintain current nuclear and build more, use renewables everywhere “smartly,” with regional considerations; approve new transmission; and increase efficiencies, from improved metallurgy on lines to pricing for consumer conservation. “This democracy will have the political and regulatory will to answer this problem” or be stuck with a costly and reckless energy policy.

Philippe Joubert, Executive Vice President, Alstom, said, “The solution is already here, and we just have to do it” through political will, regulatory certainty, and rapid development and deployment of a mix of technologies and improved efficiencies. The doubling by 2030 of the installed generation base means coal, especially in China and India. With adequate carbon dioxide (CO₂) regulation and technology, carbon capture and storage (CCS) will be developed, just as nitrogen oxides and sulfur dioxide have current solutions. Deployed CCS and increased efficiency can decrease CO₂ by 5–6 gigatons by 2030; new nuclear may represent a 1 gigaton savings, once supply chain issues are met. Renewables will solve intermittency, storage, and regional limitations. All new plants must use the best technology. Industry is already forming cross-business partnerships. “If we want the world to benefit from the huge collective effort and enthusiasm” behind these solutions, “government must create the conditions for best technology to come forward,” he concluded.

Jim Barry, Chief Executive Officer, NTR, described a world of multiple solutions, opportunities, and imperatives to solve the imminent problems. “We must pay more than lip service” to non-OECD countries’ desire to achieve our standard of living, but “we don’t have enough resources for the rest of the world to get there.” With no silver bullet, policymakers must find solutions regionally and globally; Europe didn’t anticipate that boosting renewables would mean cutting down tropical forests. Costs, technical as well as at the policy level, cannot be minimized. A new, more dynamic view must shape solutions, moving beyond “systematic delusion and misinformation” of acting in the historical patterns. For example, efficiency can contribute substantially. Water might be the industry’s new problem. Yet the massive scale means that multiple winners will be moving carefully into an entrepreneurial and dynamic space across technologies, regions, and through second and third order impacts.

Tim Healey, Co-Founder, Chairman, and CEO, EnerNOC, Inc. said demand-side efficiency and management can meet up to 50 percent of future resource and infrastructure needs, controlling consumption in response to real-time price and supply signals. Electric infrastructure is overbuilt to meet peak demand, with 10 percent used to meet the 1 percent peaking power. To double today’s infrastructure, “much of [it] carbon emitting,” could cost $5 trillion over 25 years. Demand response as a capacity and resource solution is quick-starting, responsive to demand shifts, cleaner, and reliable. The existing infrastructure and communications network can cost-effectively communicate with thousands of consumer end-points, processing data in real time. Through demand management EnerNoc is “adding” 200 megawatts of new capacity “resources” every quarter. Without capital-intensive asset replacement, consumers reduce consumption by 14 to 30 percent, save emissions, and see opportunities beyond energy efficiency.

John Deutch, Institute Professor, Massachusetts Institute of Technology, was intentionally pessimistic. Government support for carbon-free nuclear may not improve its economics; little progress on radioactive waste management creates skepticism. Whether, how, and when governments adopt carbon constraints on generation will also affect transmission, distribution, and usage, with global geopolitical effects. A relatively modest carbon charge and cap-and-trade program will not help in choosing which technology to build. And while CCS is technically possible, no project anywhere currently demonstrates technical performance or cost; a monitoring, modeling, and verification system for carbon underground; or governing regulations. Even with “new” coal, a plant optimized for CSS is “completely different” from the current integrated gasification build. US generation needs natural gas in the near term, which will depend on imports. Renewables are essential, despite federal estimates of their smaller contribution by 2030 than today. Photovoltaics can reduce costs dramatically but cannot add much supply by 2030. Political leadership must demonstrate the missing commitment and direction.

Panelists shared views on questions posed by Dr. Yergin. There is no silver bullet, but “silver buckshot,” a variety of solutions that need government and customer support. The risk of customer nonperformance in demand-side management is balanced by a portfolio approach. Mr. Joubert mentioned Alstom’s new nuclear turbine plant in Tennessee and said skilled staff is available, given nuclear programs in Europe, China, and now Russia. Panelists also discussed CCS infrastructure costs and design, first mover benefits, the need for a more market-conscious use of government funding, and how to speak to politicians about the energy picture.