COP27 has been dubbed the “Implementation COP.” Every year since 1995, the governments of the world come together at the Conference of the Parties to the United Nations Framework Convention on Climate Change (COP) to discuss progress and challenges of climate action on multiple fronts, including regulation, mitigation, adaptation, emissions, and physical and transition risk. At each COP, the official meetings are accompanied by a resounding clamor from corporations, nonprofits, activists, and other stakeholders. This year, the call both inside and outside the [formal?] meeting halls is that the time for talking is done. The 27th COP is the time to leave the meeting rooms, roll up sleeves, and build what’s needed to make good on all the ambitious goals and complex plans of the prior 26. A key area for action is renewable energy.
Implementation on renewables plays out differently worldwide. Some of this is due to the obvious variations between countries: different utility grids, different economies, different landscapes, different governments, and different social contexts. Beyond that background variation, the feasibility of each type of renewable energy technology differs depending on location, making blanket generalizations and international agreements even more difficult.
When the Inflation Reduction Act (IRA) was signed into law in summer 2022, it was widely heralded as a moment for the United States to join the European Union and China at the forefront of global renewable energy development. Interest immediately turned to the range of funding mechanisms intended to turbocharge climate action by the American private sector. The IRA amplifies existing momentum and provides mechanisms to ensure support for innovation, encourage adoption of renewable energy sources, and speed production and distribution technology, all of which are likely to impact not only US-based companies and projects, but the sector globally.
The IRA put renewable energy implementation into the center of American climate discourse. For many, this is new, but the hurdles to implementation of renewable energy projects are long understood by ERM’s renewable energy experts. To understand how the world can implement renewables at scale, we talked to several colleagues supporting companies’ efforts to navigate challenges and respond to expectations from regulators, customers, and markets. According to them, successful implementation of renewable energy projects depends on the addressing the following four factors:
Stakeholders and Landscapes
Part and parcel of thinking about the lifecycle of renewable energy is thinking about where new projects can and should be sited on the landscape. Many local communities are now hesitant to allow new energy production facilities onto their landscapes, especially those such as solar or wind that can’t easily be hidden away and often require extensive space and/or specific types of sites. In places where renewables have been a part of the energy mix for some time, the most suitable locations have often already been developed. In these cases, planners are now turning to more challenging locations. ERM North America Renewable Energy Lead, Capital Projects, Nikki Payne noted a new trend towards siting renewables projects on brownfields, which can solve two problems at once by finding a good purpose for hard-to-use land. She did note, though, that converting these formerly industrial sites to renewable energy project locations may lessen community impact, but may also entail structural design changes and considerations of existing contamination and capped systems before development can begin.
Project Lifecycles
Up to now, much of the focus has been on the technological solutions that underlie renewable energy. The advances that propel today’s renewables sector—from turbine or panel design to energy storage—are impressive, but innovation is only one facet of the overall process of delivering renewable energy to users. With renewables now firmly rooted within the energy sector, the industry must better manage the lifecycle of its components and infrastructure. Project lifecycle issues for solar and wind may also pose unexpected challenges in some places soon, as technological innovation and manufacturing output outpaces the regulatory permitting capacity to expand. Solar panel manufacturing is highly concentrated in China, although recent supply chain disruptions and regulatory complications appear likely to encourage more geographical distribution. Numerous challenges in materials sourcing for wind and solar, as well as battery storage, remain. And as panels reach the end of their useable lifespan, decisions about how to reuse or dispose of those materials will also become more crucial.
Distribution and Storage
As renewable energy becomes a larger part of the overall energy mix for electrical utility grids, it becomes more challenging to distribute power when and where it is needed. Energy generated by solar or wind can be out of sync with customer demands—plentiful when the sun shines or the wind blows, but not necessarily in alignment with spikes in consumer demand. The challenges in storing energy when it is plentiful, and providing it when and where it is needed, are parts of the larger challenge of renewable energy implementation. ERM Partner Adam Han noted that a renewable focused grid will have to be increasingly smart, resilient, and streamlined to ultimately balance supply and demand in a changing environment. Our current grid must transition from a patchwork to a nationwide infrastructure, a complex opportunity that requires urgent planning, digitization and regulatory coordination to ensure success.
Multidisciplinary Cooperation
Successful implementation of renewable energy projects at scale is not a problem that can be solved solely by money, talent, or regulation. Implementation at scale requires a thoughtful and intentional approach to ensure cooperation among multiple stakeholder groups. Working relationships will need to be forged between decision-makers and experts who may never have worked together before, within companies, across communities, and between organizations. To avoid inefficiencies and delays in renewable energy project development, interdisciplinary teams that can engage with the full suite of stakeholders and ensure coordination of complex plans are needed. ERM Global Service Leader for Capital Project Delivery, Todd Hall, noted that current conditions have produced a never-before-seen opportunity to expand renewable energy at scale, but that tapping into that opportunity requires companies to exercise a commensurate level of strategic decision-making and resourcefulness in siting, planning, and implementation.
The momentum of the 26 COP meetings prior to 2022 have led participating stakeholders to agreement on the scope and timing for climate action. With the way paved for action, leaders from all sectors must now must turn to the question of how to actually implement lasting change. Moving too fast, making unwise choices, or ignoring stakeholders could cause unanticipated logistical or financial challenges. For those who have devoted their careers to implementation of renewable energy projects, now is a time to watch the world coming to understand challenges that they have dealt with for years. In that respect, COP’s spotlight on implementation promises to be a welcome source of new energy towards enacting lasting solutions.
