A group of journalists recently visited Stantec's Washington, DC office, a global company specializing in all aspects of energy generation, transmission distribution, and energy storage. With extensive expertise in various energy areas, including wind, solar, and hydropower, Stantec has been actively helping nations like Pakistan and Ethiopia utilize their resources for several decades. They have also undertaken similar projects in the United States and Canada.
During their visit, the journalists spoke with Stantec's experts, Loren Labovitch, Vice President, Regional Leader, International Development Group, and Mario Finis, Executive Vice President of Energy & Resources in North America. The experts discussed the region's renewable sources and the risks associated with blackouts. Among the media was a correspondent from Daryo, Uzbekistan. The briefing offered valuable insights into Stantec's ongoing efforts to support global energy sustainability.
Loren Labovitch, could you shed some light on the primary obstacles faced during the global shift towards a sustainable, eco-friendly economy?
I think the biggest challenge in transitioning to a green economy worldwide is making the necessary technology available to reduce our reliance on fossil fuels and other activities that harm the environment. It's essential for those who can produce the technology to work together with those who need it and can afford to maintain it. Initiatives such as the United Nations Sustainable Development Goals are crucial in facilitating a global dialogue that brings countries and regions together to address these issues. The main objective is to protect their people but also find ways to work together for the benefit of everyone. It's a global challenge that requires cooperation and collaboration from all of us.
Mario Finis, you have experience in exploring the potential of the Central Asian region in transitioning to renewable energy sources. Could you kindly share your insights on how we can further develop this sector?
From my perspective, it's essential to have a variety of energy generation methods. For instance, if you rely solely on hydropower, you'll sometimes need more water to generate your required capacity. Therefore, it's necessary to have other sources to balance and diversify. Even in the USA, solar is excellent during the day but doesn't work at night. The same goes for wind, which may not always be available. Therefore, we need to focus on energy storage to balance out the peaks and valleys in our daily energy usage. We should take advantage of the resources available to us, such as hydropower, and look to our neighbors for complementary generation methods if necessary.
We have retired many coal plants, and we have retired and decommissioned many gas plants. And we have found that they needed that one we've suffered from extremes in temperature, either cold or hot, either extreme, that the solar, the wind, the others have not been available when needed. So we need that baseload to generate power whenever you want. A gas plant or a coal plant, you generate power whenever you want. You're not dependent on nature, wind, or solar. So we've learned that you need baseload or dispatchable power to provide the reliability we're all looking for.
We can't be 100% reliable on renewables. But there are other clean technologies too. We will move away from coal. Currently, natural gas is a reasonably clean source of energy. So we're also looking at new clean technologies; we're looking at hydrogen. We're looking at carbon capture on existing facilities capturing the carbon that would otherwise go into the atmosphere and storing it. We're looking at small modular reactors as clean ways to generate reliable baseload power, not just coal or gas.
Could you provide advice on what each Central Asian country should focus on? Which renewable resource is more critical or prominent for each country in the region?
Mario Finis: Our organization is actively engaged in facilitating the development of hydropower resources in several countries, particularly in Pakistan and Nepal. The region's conducive environment and potential for hydropower projects make them a viable option for sustainable energy generation. However, we recognize the need to diversify energy sources to avoid over-reliance on a single technology. In case of natural disasters, droughts, or other such events, capacity limitations can arise, leading to significant challenges. Therefore, we strongly encourage using various energy sources, including solar, wind, oil, and gas, alongside hydropower, to maintain a stable and resilient energy grid. Additionally, we focus on interconnecting different regions through collaborations like the Power Pools in Africa, where countries work together to leverage the resources of all members and complement each other's strengths. I would say a balanced mix of renewable and non-renewable energy resources is crucial for achieving energy security and stability, especially in regions prone to natural disasters and other unforeseen events.
Loren Labovitch: I would like to emphasize a few important things in the region. One crucial aspect is that you must focus on the Water, Energy, and Food nexus. It's essential to consider these things in an integrated way rather than isolation. It is important to use participatory planning processes that engage the community proactively, ensuring that they buy in and take ownership of the project, whether it's an energy, water, or agricultural project. Establishing the right enabling environment or regulatory environment to attract private sector investment is also important. Besides public sector funds, there are must-do things to attract international investors and promote the investment of local private capital and companies. Lastly, we also believe that investing in local capacity is crucial. Building the local capacity of institutions, companies, and academic facilities will ultimately lead to long-term growth and sustainability. These are some of the things that our group works on.
What can you advise us regarding energy security in Central Asia? What should we pay attention to?
Mario Finis: In North America and several other nations, we are currently experiencing the decarbonization of the electrical system. Growing demand for electricity accompanies this transition as we move towards electric vehicles and the electrification of buildings, shifting away from fossil fuels. As you may already know, energy security is a complex issue in this context. The supply chain is a critical component, including sourcing materials needed for energy storage, such as lithium and other essential minerals and metals. Sometimes, these resources can be acquired locally and domestically, while other times, they must be imported. Therefore, energy security is not only a technical matter but also a political one. Ensuring confidence in the supply chain is crucial to guaranteeing the availability of all necessary materials, from mining critical metals like copper and lithium to distributing energy through local networks.
Loren Labovitch: It is vital to consider demand-side management or conservation for energy efficiency. It is not only necessary to ensure a sufficient supply of power but also imperative to use and conserve energy more efficiently. Often, communities and individuals overlook the amount of energy and water they consume. Encouraging habits and employing technology that promotes energy and water conservation are crucial in achieving energy security.
How can we prevent the occurrences of blackouts in the Central Asian region?
Mario Finis: One of the methods we've explored to mitigate the risks of events that could result in power outages is distributed generation or microgrids. We've achieved significant progress in this area by utilizing small hydropower to generate electricity independently of the grid. Additionally, battery storage can function independently of the grid, providing the ability to generate power when needed, even if interconnected during optimal conditions.
In the United States, natural disasters have caused numerous blackouts. Hurricanes on the East Coast damaged transmission and distribution lines, affecting power generation, while fires in the western part of the country take out transmission and distribution lines causing blackouts and energy shortages. During such times, importing from other areas becomes necessary because some characteristics are complementary. Once predictable demands have now changed due to sociological needs like charging electric vehicles at night. This has altered the demand curve significantly, making it more variable. Consequently, predictability has reduced significantly, and the need for independent resources that can adapt to wind and solar power has become crucial. Regional interconnection can help even out loads, but microgrids, small hydropower, and distributed generation can also accommodate fluctuations without relying on the larger grid.
Any energy production requires machinery, and eventually, that machinery will reach the end of its life. What do you do with all the remaining parts that need to be utilized? Do you have any plans or technologies in place to address this issue? It's a concern that these parts don't necessarily contribute to the green economy and is something that people are looking at today.
Mario Finis: In the United States, the infrastructure is quite old, especially regarding the grid, hydropower, and our gas and coal-fired plants. Some of these facilities are over 50 years old. However, significant modernization and upgrades are happening, particularly in the hydropower industry. Civil works around hydropower plants have a lifespan of 70-80-100 years if well maintained, but the mechanical components require rehabilitation. Therefore, there is a lot of activity in the US and Canada to upgrade and rehabilitate hydropower plants' machinery and electrical components. The government provides incentives for these upgrades, as they can yield an additional 30% more energy from older facilities without any additional environmental impact, as the infrastructure is already in place. This economic funding is available to rehabilitate more aging infrastructure, particularly in hydropower plants. Different components of these facilities have varying life expectancies, with turbine generators lasting 25-30 years before requiring an upgrade.
In comparison, some electrical and control components become obsolete in as little as five years. Some plants are over 100 years old and operating in their original condition. Maintaining these facilities can be difficult, as spare parts are often difficult to find, and obsolete parts are no longer made. Upgrading the facilities depends on the specific component in question.
Loren Labovitch: Regarding equipment, it's essential to consider your procurement policies or procedures. We work closely with the US Agency for International Development to help host countries establish more effective and transparent procurement procedures. This attracts more and better equipment manufacturers and ensures the equipment is correctly serviced. Reasonable procurement procedures are essential for attracting reputable manufacturers and ensuring long-term success. Improving institutional capacity and procurement procedures can lead to better bids, better manufacturers or contractors, and more efficient and economical equipment requiring fewer replacements. So, it's critical to consider procurement when maintaining equipment, as it can significantly impact performance and overall project success.
Loren Labovitch: Proactive and continuous stakeholder engagement is critical to any project; it could be a small community-level project, putting in a microgrid or some distributed energy, it could be an extensive, high voltage transmission line running across the country, in either case, engaging with the local community, both the communities that are going to be affected by the project and or benefit from the project. And doing that upfront, including them in the planning and, ultimately, the implementation of the project, is critical. For instance, one of the things that can be the most challenging and time-consuming, and often controversial element of a project is land acquisition and resettlement. And that is something that you don't want to underestimate the importance and the attention you give. We will, more times than not, work with international standards for things like resettlement and land acquisition. The World Bank or the International Finance Corporation, environmental and social performance standards are widely used. Asian Development Bank has very similar criteria for protecting people and the environment. Some things are being donated to the US to come up with ways to certify infrastructure projects as sustainable. I don't know if you're familiar with how we certify energy-efficient buildings in the US.
But in the same way, some groups are looking at what makes an infrastructure project, a road, a transmission line, or a power generation plant sustainable. And all of these frameworks that you look at include an extreme emphasis on the social aspect. So that the community is brought in, they help inform what will make a good design of the project, and they can benefit from the project in an inclusive and equitable way. There's an opportunity for livelihood, income generation, and livelihood improvement, either through construction or long-term operation. And ultimately, you're working with local stakeholders, both in the public and the private sector, and even non-governmental and community organizations. So again, proactive, consistent stakeholder engagement is critical.
Mario Finis: The International Hydropower Association has a sustainability protocol that addresses all of the issues that Loren just raised, similar to the World Bank's Equator Principles, to make sure that all the interests in the development of a project or balanced so just another resource and another mechanism to provide confidence that a project is being developed responsibly.
How important is it to timely inform the population about the new tariffs and how it has been done here? Are there any particular procedures or lessons learned ahead of time?
Loren Labovitch: One of the things we focus on in the USA is building capacity and investing in local resources, such as helping utilities improve their customer engagement. It's important to be proactive in how a utility interacts with its customers and discuss plans for improving service and reducing blackouts or brownouts. Building customer relationships and collecting payments can be an art and science, especially at the household level. Investing in building greater capacity in utilities or asset owners is essential, and customer engagement is one of the critical areas to pay attention to.
Mario Finis: The United States is a diverse market with varying electricity costs across different regions. Electricity is relatively inexpensive in the Pacific Northwest, where hydropower is prevalent. However, electricity costs are considerably higher in the northeast, where thermal sources like coal, oil, and gas are more common. These price differences can be attributed to the source of electricity generation and investments made in the past. Overall, electricity costs are not uniform throughout the country and are subject to variability.
What would be the simplest way to explain the importance of transmission to renewable energy sources?
Mario Finis: Investing in our electricity infrastructure and power generation is necessary to achieve a cleaner and more sustainable future. While this transition will require significant financial resources, it is critical to our long-term goals. I generally tell people that we all believe that the transition to a cleaner, more sustainable future is good for everyone and desirable. But that is a journey. It is not something that happens overnight. And many of the commitments made for 2030 or 2045, or 2050 to get to that point where we achieve what we want to accomplish regarding renewable energy. So we can't just stop investing in what we have and only invest in new facilities. We have to maintain and upgrade our existing infrastructure as we transition. As we bring more wind, solar, and hydro online, we still have to maintain our gas and coal plants to keep the lights on.
Mario Finis: Some of the fastest-growing jobs in the country are in the renewable energy space in solar panel installation manufacturing, in wind turbine installation construction.
Could you please provide information on the current tariff rates in the United States?
Mario Finis: Some of our private developers and utilities charge a premium for what they call green energy or renewable energy, I believe up to 15% additional cost to have provided them green energy. Some people willing to pay for it spend that extra premium for clean energy or green energy in terms of the rates in the US. I don't have the exact numbers, but I will say I sense that in the Pacific Northwest, primarily low-cost hydropower, we're probably in the five cents per kilowatt hour range. When we start talking about the northeast, which is the highest cost, we're 12 or 13 cents per kilowatt hour.
Do you think the high tariffs will stimulate the population to save electricity?
Loren Labovitch: Tariff structures can be effective in encouraging energy conservation. By implementing structures that charge more for higher energy usage, people may change their habits and become more mindful of their consumption. In addition, many households are unaware of how much electricity they use, as there is often no meter in the home. This lack of awareness can lead to excessive consumption and a reluctance to make changes. Therefore, promoting awareness through informational campaigns and emphasizing the importance and cost of energy conservation can be beneficial.
Mario Finis: Some utility companies have implemented programs to encourage conservation. For instance, in Texas, individuals can save money by reducing their electricity usage during the hottest days of the year to prevent any strain on the electrical system that could result in brownouts. Similarly, California offers a financial incentive to consumers who refrain from using air conditioning or electricity during peak periods of the day to avoid overloading the grid. These programs provide a financial benefit to consumers while promoting energy conservation.
Who is responsible for determining the location of an electric plant - the company and its investors or the government?
Mario Finis: The Federal Energy Regulatory Commission regulates all private power production in the United States. They have a very detailed process for submitting an application and going through environmental reviews before getting a license to construct a project.
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