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Turning the Page on 2021
Acting Executive Director Sheila Hollis

Dear USEA family,

Happy New Year! I hope you all had a wonderful and relaxing break. While it is always tough to say goodbye to the Holidays, hopefully you are reinvigorated to tackle the important and exciting work that awaits us all in 2022.

January will set the tone for our fast-paced upcoming year, and USEA’s 18th Annual State of the Energy Industry Forum will kick things off on Thursday, January 20. We have 19 star guest speakers joining us who represent energy sources from across the spectrum. One of the reasons SOTEI is a premier event is that it provides a truly unique platform where the audience can absorb cutting-edge and often competing points of view and alternative solutions, all back-to-back-to-back! These executives, while they often disagree on the best path forward and how to achieve it, are dedicated to achieving two critical goals: serving our energy needs and working together to reduce CO2 emissions.

Virtual Press Briefings will return this year and will continue to cover the timeliest energy issues of the day. The first installment of 2022 will be hosted on January 28 and will focus on transmission.The infrastructure bill has $5 billion allotted for transmission investment, by far the largest federal investment in transmission in decades. The deployment of these funds will be scrutinized rigorously. Registration for this briefing will be opening soon.

An op-ed I wrote for Bloomberg Law’s “Practitioner Insights” section was published on Tuesday. It focuses on the obstacles to achieving a quick energy transformation, citing current developments in Maine and Michigan as evidence for the reality that lies ahead. The trends that I highlight in the op-ed will surely play out over and over throughout the coming year, as renewable energy efforts ramp up and disputes over new energy infrastructure initiatives play out in the public eye.

On that note, if last year is any indication, energy and environmental issues will continue to generate unprecedented national and international coverage in 2022. Think of all that happened in 2021: the Texas Deep Freeze, the megadrought and wildfires out West, the Colonial Pipeline attack, global fuel shortages, critical rare earth mineral supply issues – just to name a few! There has never been a more crucial and pivotal time to be involved with energy, and the current state of international and domestic energy affairs has made USEA’s mission more vital than ever.

I hope everyone has a productive week that lays the foundation for a busy and impactful year. I wish with all of my heart that this year brings stability, health, and more strides in the return to normalcy.

Planning for Cyberattacks That Threaten Our Infrastructures and Democracy

Dr. Chris Beck, Chief Scientist & Vice President for Policy
Electric Infrastructure Security (EIS) Council

Enhancing the resilience of critical infrastructures to withstand “Black Sky” events – large-footprint, long-duration power outages with accompanied cascading infrastructure failures – is the core mission of EIS Council. The most challenging Black Sky threat is a sophisticated cyberattack on the electric grid and/or other critical infrastructures; others include coordinated physical attacks, electromagnetic pulses, extreme earthquakes, severe space weather, and extraordinary weather events. On December 15, 2021, EIS Council hosted a virtual event titled “Cyber Megacity Wars: How close are we to the tipping point?” Key insights from that discussion are helpful to frame the challenge for all of us in 2022 and beyond.
Cyber attackers are waging political and economic warfare through ransomware, intelligence gathering, and technological theft. These attacks continuously threaten the IT and OT systems of our energy grids, water treatment plants, and government, defense, medical, transportation, financial, and electoral infrastructure. In 2020, cyberattacks on financial institutions climbed an incredible 238%, followed by a further increase of 118% in 2021.

The cyber “attack surface” is huge and growing. We must prioritize protections for those infrastructures critical to national security, economic stability, and public health and safety. To protect our integrated networks, we need to report and share attack and mitigation information and do so much quicker than we’re doing now. This requires strong public-private partnerships, with mutual trust and symmetric information and burden sharing. In the U.S., we've been trying for 25 years (ever since the Clinton Administration put forward the Presidential Decision Directive on Critical Infrastructure Protection PDD 63) but have not been very successful. The government is loath to share classified information, and the private sector has trepidation about sharing vulnerability information. We need to get over this hump.

Examining the Colonial Pipeline ransomware attack, we saw that business systems on the IT side and physical systems on the OT side had been integrated, which led to downstream impacts to the marketing processes that guide operational decisions, infrastructure planning, real-time ops, and distribution of product. Wholesale integration led to vulnerability; when one system was compromised, the entire enterprise froze.

Probably the best way to mitigate that is to develop a contingency market strategy that considers disrupted operating conditions amid a cyber compromise – whether ransomware or otherwise. For example, using backup accounting systems so companies are comfortable they'll be compensated, allowing the most critical products and services to continue to flow.

Finally, in addition to cyberattacks on critical infrastructure, we are also facing another top national security threat to the United States and our allies around the world: internet-based disinformation attacks designed to widen the societal divides within our country and corrode faith in – and the functioning of – Democracy itself.

We must be willing to recognize cyberattack, cybercrime, and disinformation as terrorism, because they intend to alter our very way of life. In cyberspace, there is no difference in impact between a government, a non-state actor, or a criminal. It will take all of us, working cooperatively, to address these challenges. EIS Council looks forward to collaboration with USEA and other partners in government, the private sector, NGOs, academia, and individuals to secure our collective future.

The Challenging Path to Decarbonizing the Power Sector in Southeast Europe

USEA/USAID analysis projects the impact of decarbonization and clean energy on the region's electricity market and grid

Produced by USEA's Energy Technology and Governance Program (ETAG)
Many countries across Southeast Europe (SEE) are now developing their national energy climate plans and developing their strategies to meet international climate milestones by 2030. Chief among these strategies is the retirement of existing lignite and coal generation plants and the addition of substantial renewable power generation. With that in mind, these countries need to anticipate:
  • the impact of a substantial—if not extreme—change in the generation mix;
  • the resulting reduction in CO2 emissions;
  • the potential change in wholesale power prices;
  • the ability of the grid to maintain network stability and reliability, while absorbing the projected changes in generation; and
  • the degree to which they will need to rely on electricity imports from other countries or regions.
To address these needs, the USEA Energy Technology and Governance program, in cooperation with the US Agency for International Development, recently completed an in-depth analysis of the network and market impacts of substantially decarbonizing the SEE electricity sector, and on each of its 11 countries, by 2030.

The key findings of this USEA analysis show that:

1. The current Ten-Year Network Development Plans prepared by transmission system operators in SEE already envision decommissioning 50% of the regional coal and lignite fleet by 2030. Our analysis shows that the regional transmission network can accommodate a reduction of up to nearly 80% of the current coal and lignite fleet’s capacity, but natural gas must be the bridge fuel to a decarbonized future. The region will require as much as 9 GW of new natural gas fueled generation to replace the coal and lignite capacity that will be retired by 2030, since other technologies are not yet ready to fill the gap. To accomplish this, the region must diversify its supply of natural gas so that no single supplier can jeopardize security of supply.

2. The countries in the region plan to more than triple the installed capacity of solar and wind power generation by 2030, but this will not fill the gap from anticipated coal and lignite plant retirements, due to their intermittency and low capacity factors. The region will be challenged to bring that much new renewable capacity onstream by 2030.

3. USEA estimates that the region will require approximately $50 billion by 2030 to bring the new required generation online. To mobilize the financing to support this massive change in the electric generation mix, SEE will need a competitive, geographically broad wholesale electricity market integrated with the European wholesale market, appropriate regulatory frameworks and streamlined permitting and licensing procedures.

4. Wholesale electricity prices in Southeast Europe will remain sensitive to the price of CO2 emitted by the remaining coal and lignite plants needed for grid stability and the natural gas fueled generation that will be added by 2030. Government policy makers and national regulatory authorities must institute policies and measures to ensure a just transition, particularly for vulnerable populations. 

5. CO2 emissions will be reduced by more than 50% if most of the regional coal and lignite fleet is retired by 2030 as scheduled. The high capacity factor of the remaining coal and lignite plants and the addition of new natural gas fueled capacity limits further reduction. 

6. Electricity imports to SEE could rise considerably as the region decarbonizes. Though the region’s transmission network is sufficiently robust to accommodate imports from several sources, it is unclear whether neighboring countries will have enough power to export if they are going through the same transition. If there is a shortfall in regional power supplies, then reliability could fall, and wholesale power prices could skyrocket.

These simultaneous changes are a tall order and will require proactive measures well before 2030. Transmission grid and market operators in the region should utilize the results of this USEA study to anticipate the impacts of deep decarbonization now, and work effectively with regulators, policymakers, private investors, and other stakeholders on potential solutions to ensure that the region’s path—and the paths of each individual country—to a clean and reliable electricity future is a smooth one.
Energy Utility Partnership Program (EUPP)

"Improving Utility Performance and Energy Security By Enhancing Institutional Knowledge"

East Africa Regional Power System Modeling Training (pictured above)
USEA hosted the second of three Power System Modeling trainings aimed at increasing Eastern Africa Power Pool (EAPP) and Nile Equatorial Lakes Subsidiary Action Program (NELSAP) planning staff’s capacity for advanced modeling and long-term planning. The purpose of this program, funded by USAID within the Power Africa Initiative, is to create conditions conducive to greater regional electrical interconnection and to facilitate power trading. These trainings will ultimately create an enabling environment for the addition of the required electrical generation to meet Power Africa’s goals.

Colombia Offshore Wind Master Plan
Colombia’s Ministry of Mines and Energy is working on an offshore wind master plan. EUPP facilitated discussions between the Ministry and the New York State Energy Research and Development Authority (NYSERDA) on NYSERDA’s Offshore Wind Energy Master Plan. Topics included lessons learned from the master plan development and deployment, inter-institutional synergy established for the offshore wind projects, local industry development, and an overview of the “Empire Wind” and “Sunrise Wind” projects. The discussions will help the Ministry as it finalizes its own master plan.

Training On Regulatory Processes For Cost-Reflective Tariff Design
The South Asia Regional Energy Hub (SAREH) held a training for over thirty participants from the electricity commission, ministry, and power utilities in Bhutan. The training enhanced participants’ understanding of regulatory principles, methods, and processes of tariff design and touched upon various tariff-setting mechanisms for the tariff regulation of generation and transmission infrastructure. Better techniques and tools learned during the program are expected to support utilities and regulators and other institutions to be abreast of latest regulatory practices and design tariffs based on the principles of economics, future sustenance, and growth of the power sector.

Improving Tajikistan's Capacity to Model Power Systems and Integrate Renewable Generation
In December 2021, the USEA-Central Asia Partnership, in partnership with USAID, provided the Electricity Transmission Network (ETN) company of Tajikistan with planning models of the Tajikistan electric grid for 5 and 10-year horizons. This delivery concluded a large project on Power System Modeling and Long-Term Planning that aimed to enhance NETC’s capacity for network modeling, security analyses and long-term planning. The project also developed a dynamic model of the Tajikistan electric grid and provided ETN engineers with comprehensive training on power system modeling and simulation using DIgSILENT PowerFactory software. The project will lead to improved efficiency, stability, and reliability of Tajikistan’s national grid, resulting in reduced power outages and fewer network interruptions. The ultimate outcome will be the creation of an enabling environment for expanded integration of renewable generation and for the establishment of a unified power system in Central Asia.
Promoting Consensus on CCUS and Carbon Management Technologies

"To Educate The Public, Policy Makers, Industry, and Other Stakeholders and Build A Consensus on the Benefits of Carbon Capture Utilization Sequestration and Carbon Management Technologies"

The Consensus program finished 2021 on a high note with two webinar series which consisted of two webinars each. The first series, held on 12/2 and 12/8, was an introduction to the 13 teams selected to take part in DOE’s Carbon Ore, Rare Earth, and Critical Minerals (CORE-CM) Initiative for U.S. basins. The initiative, which will be implemented in traditionally fossil fuel-producing communities across the country, will help those communities support production of rare earth elements and critical minerals vital to the manufacturing of batteries, magnets, and other components important to the clean energy economy.

The second series, held on 12/21 and 12/22, focused on "Paving the Way to a Hydrogen Economy" and the provisions emerging from the recent bipartisan Infrastructure Act and the pending Build Back Better bill. The four panels over two days touched upon: (1) the national strategy for hydrogen; (2) an in-depth analysis at electrolysis options; (3) the evolution of the Hydrogen Economy; and (4) tax incentives for hydrogen production and storage.
Promoting International and Domestic Consensus on Oil and Natural Gas

"Convening Global Stakeholders to Ensure an Affordable, Sustainable, and Secure Energy Future"

U.S. – India Low Emission Gas Task Force: Members of the U.S. – India Low Emission Gas Task Force (LEGTF) held a meeting on December 3 to highlight the progress of the three LEGTF subcommittees in supporting the Government of India’s goal of meeting its energy needs and reducing energy-related emissions through the use of natural gas to displace high polluting fuels. The Grid Strengthening Subcommittee presented the findings of a report on the potential applications for methane leak detection and repair (LDAR) in India. The report highlighted a strong commercial case for LDAR, particularly in gas distribution systems. LEGTF members are exploring the potential for a pilot LDAR project. The Gas for Lower Emissions Subcommittee shared updates on pilot projects for fuel switching from higher emitting fuels in transportation, both in the automotive and locomotive subsectors.
U.S. - East Africa Geothermal Partnership (EAGP)

"Promoting Geothermal Development In East Africa's Great Rift Valley"

EAGP is partnering with POWER Engineers to support the Oserian Two Lakes Industrial Park (OTLIP), an industrial park in Kenya powered by a geothermal/solar hybrid microgrid. EAGP and the POWER Engineers team will be conducting a study on the potential for interconnecting the microgrid to Kenya’s national grid to provide backup power as the industrial park expands and looks to develop additional geothermal resources. OTLIP is the first geothermal/solar hybrid industrial park in East Africa and represents a clean, sustainable, and cost effective project model that creates local jobs and promotes economic development.
1/20          18th Annual State of the Energy Industry Forum

1/28          Virtual Press Briefing on Transmission & the Infrastructure Bill
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