Smart Wires Inc.

The TransAtlantic energy race – Will the US use this opportunity to catch up?

June 11, 2021

No one can argue that Europe is leading the global charge in the Energy Transition. Its ambitious targets and EU-wide policies, including the original Renewable Energy Directive established more than a decade ago, the Green Deal, TEN-E Regulation, and the Paris Climate Agreement, are all driving real and long-lasting change. At this rate, Europe is well on track to eliminate carbon emissions by 2050.

Why has Europe made bold and meaningful progress while other regions – some much larger consumers of energy – are slow off the mark? Do we need a ‘green race’ to bring other countries to the party?

The United States for one, needs to catch up. The potential for this superpower and super-fossil fuel-loving nation to embrace renewables, a more efficient grid and the Energy Transition, is huge.

We’ve seen FERC (Federal Energy Regulatory Commission) signal their intention to address key issues that have historically been siloed – inter-regional planning, intra-regional planning, interconnection processes – and deliver solutions to obstacles such as planning, permitting and cost allocation.

Critically, FERC is also looking to act on the legislative mandate of the Federal Power Act section 291b(3) which requires FERC to incentivize the deployment of grid enhancing technologies. FERC understands that today’s framework dis-incentivizes investment in grid efficiency measures. By sharing project benefits between a utility’s customers and shareholders, this misalignment can be righted, resulting in billions of savings for consumers.

In parallel, President Biden’s recent infrastructure package offers a significant, and very welcome change in direction for the world’s second largest energy producer and consumer. The American electric grid could receive a much needed, renewed focus.

Negotiations with the Senate are still ongoing, and investments in the electric grid appear to potentially be on the chopping block. This would be a critical mistake. 

The President’s initial proposal included $100 billion to create a more resilient electric grid, lower energy bills, improve air quality and public outcomes, create good jobs, and put the US on the path to achieving 100% carbon-free electricity by 2035.

The need for holistic solutions is undeniable. The combination of FERC and Congressional action would put the US squarely on track to catch up to Europe and claim a world-leading position in the transition to fossil-free energy economy.

If the US captures this opportunity, we can look forward to seeing projects like those recently announced by National Grid in the UK. National Grid is unlocking 1.5 GW of capacity on its existing network, resulting in nearly $400 million in consumer savings, and enabling roughly 1 million homes to be powered by renewables.

National Grid’s work shows that the right policies and funding can drive massive dividends for consumers. These projects were pursued because of an effective regulatory framework that encouraged holistic thinking. What we’re seeing in Europe, particularly in the UK, needs to happen across the pond as well. The US needs these multi-pronged approaches to accelerate an affordable energy transition.

It’s time for the US to enter the green race and get the energy transition done.

Contributing expert

Peter Wells

Chief Executive Officer

Peter Wells is the Chief Executive Officer of Smart Wires, a global power technology company advancing the delivery of affordable, clean electricity worldwide. Peter joined Smart Wires from GE Renewable Energy, where he served as CEO of Onshore Wind for the Europe and Sub Saharan Africa (SSA) Region for two years. Peter had previously held the role of Senior Vice President and COO for Services and Projects with Vestas Americas.

Prior to Vestas, Peter had spent five years with UpWind, where he was CEO, growing the business 10X to create the leading Independent Service Provider in the US, before successfully selling the business to Vestas in 2015. Before joining UpWind, Peter spent ten years with GE in various roles, including Six Sigma, Marketing, Parts GM, and VP New Plant Project Operations in different GE Energy business units. Peter, who is originally from the UK, previously spent time at a variety of European companies, mostly in the EPC (Engineering, Procurement & Construction) space as a Chartered Surveyor, dealing with the commercial management of large and complex infrastructure projects.