Do governments and policymakers hold the key to fast-tracking a net-zero economy?

Posted: August 2, 2024

Electrification is the backbone of a carbon-free economy. Achieving net-zero on a global scale requires $125 trillion in climate investment by 2050, according to research commissioned by the United Nations Framework Convention on Climate Change (UNFCCC). But money alone is not enough to speed up the energy transition.

What can governments and policymakers do to drive this change?

In June 2024, we were proud to host the second AVEVA Utilities Executive Summit. This event brought together leaders from the power industry along with key government stakeholders and regulators. We heard their challenges and opportunities as they look to a future of rapid energy transition and grid transformation.

Andrew McAllister, Commissioner of the California Energy Commission put it best when he said: “Electricity is the backbone of our decarbonization journey. We can’t rely on past models to predict the future. We must embrace this big analytical challenge with predictive analytics and use demand-based resources to optimize the grid. Culture and collaboration are how we get this done.”

Culture and collaboration, a two-way street

Grid resilience requires innovation partnerships that span communities, public and private sectors, technology vendors and research organizations. By combining practical industry knowledge with cutting-edge research and technological expertise, these collaborations will be critical to speeding up innovation for grid transformation and energy transition. Ultimately, these clean energy projects deliver better livelihoods to communities, spark additional investments and help maximize grid infrastructure deployment at scale.

For instance, the Department of Energy founded the GridWise Alliance as a joint project with the Pacific Northwest Laboratory to advance grid modernization. The GridWise Alliance works with utilities of all sizes, policymakers, and other stakeholders—including technology vendors such as Microsoft, Schneider Electric and AVEVA—to educate them on the benefits of grid modernization. This includes the upcoming Grid Modernization Index, which examines how states are advancing in their grid modernization efforts. We are pleased to see that governments are fostering the kinds of radical collaboration needed to drive lasting and measurable change. Benchmarking grid modernization puts laser focus on the transformation and will help stakeholders across the value chain to prioritize investment opportunities.

In an era of heightened intervention by regulators and policymakers in industrial markets, another area where effective communication, cooperation and collaboration is essential is the influence of policy. Through close engagement on the complexities and upcoming challenges of the energy industry, utilities and other stakeholders can help shape policies that address the challenges and opportunities that come with the energy transition. In this way, utilities can garner support and facilitate and accelerate progress.

Data and good governance will protect energy security

The Bipartisan Infrastructure Deal allocates significant investment to grid modernization. This includes investments in renewables, grid hardening and infrastructure upgrades.  

Fundamental to each of these dimensions is data. It provides instant insights and analytics for grid operation and load planning, reduces the carbon footprint of the grid, enhances its reliability, and offers cost-effective, customer-focused services. Data analysis and machine-learning tools can help utilities optimize their operations and make more informed decisions regarding their energy transition.

This means robust security governance for both physical assets (transformers, edge devices and communications) and digital assets (software) is critical. Regulations and standards such as NERC help to protect all utility assets, by maintaining and protecting system integrity and ensuring reliable delivery service.

As businesses increasingly rely on secure, trusted data to optimize operations, mitigate climate risk, and make more informed decisions regarding energy investments, there will also be a critical role for U.S. and other governments in driving standards and protocols. Having standard data infrastructure, measurement KPIs, and terms and results between and across different jurisdictions and grid territories will mean that every part of the value chain can access information and industrial intelligence that will benefit efficiency, sustainability and drive innovation. As we move to a digitalized, electrified future, an integrated digital economy will be critical to realizing our vision for connected countries. Governments are key to achieving this vision of a carbon-free world.

Learn more. Download the Utilities Executive Summit Key Takeaways brochure now.