CERAWEEK Electricity production facing the challenge of transition and climate change

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Power lines are shown as California consumers brace for further possible outages following weekend outages to reduce system strain during a brutal heat wave amid the coronavirus disease outbreak ( COVID-19) in Carlsbad, California, U.S. August 17, 2020. REUTERS/Mike Blake

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March 10 (Reuters) – Utilities executives said on Thursday their sector would face higher costs in coming years to cope with the twin challenges of transitioning to clean energy and protecting grids from the storm. worsening climatic events.

A low-carbon world will mean more electrification and development of renewable fuels when more than 60% of the world’s electricity will be generated from fossil fuels. It will take years to accomplish, and in the meantime, the industry also faces growing threats from climate change, which translates into worsening storms and harsher weather around the world, leaders said at the meeting. of the CERAWeek energy conference in Houston.

“The analysis is sobering,” said Pedro Pizarro, chief executive of Edison International (EIX.N), the parent company of Southern California Edison, one of the largest US utilities. “It’s not just an increased risk of wildfire, but also heat, flooding; it will not only require utility investments to strengthen our systems.”

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The International Energy Agency said in 2021 that to achieve a net-zero emissions world by 2050, the share of electricity in total final consumption would have to increase to 49% from 20% currently, and that will mean a new adoption of electricity. vehicles and heat pumps to supply buildings.

“Pure and simple, it’s the supply chain,” said Nick Akins, CEO of American Electric Power Company Inc. “If everyone is doing renewable energy at the same time, that further exacerbates this problem.”

More broadly, power executives have said they will also turn more to nuclear, as in France, the world’s second largest producer of nuclear electricity after the United States.

Increased nuclear output would offset some of Europe’s need to rely on natural gas from Russia, which invaded Ukraine two weeks ago and last year slowed pipeline flows to the ‘Europe.

“Many European countries are dependent on the gas that comes from Russia – right now it is flowing but if it were to stop flowing it would cause problems,” said Jean-Bernard Levy, the energy provider’s chief executive. controlled by the state Electricite de France (EDF.PA).

Last year, Germany shut down 4 gigawatts of nuclear capacity, while France, the world’s most intensive country, announced last month that it would build six more nuclear reactors. Read more

The new plants, however, won’t be online for more than a decade, EDF’s Levy said.

The shift to renewables also comes at a time when utilities need to bolster their grids against worsening weather events. Supply chain issues are also emerging there, AEP’s Akins said, as they attempt to stockpile material for the upcoming Atlantic hurricane season, which runs from June to November.

“We are not able to get the inventory that we usually have in place because delivery times for equipment have increased 10 times – if it took four months, it takes 40 for processors,” Akins said. .

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Reporting by David Gaffen Editing by Marguerita Choy

Our standards: The Thomson Reuters Trust Principles.


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