Duke Energy CEO: Coal not going away
James Rogers, who says "coal is not a four-letter word," calls for policies and technologies to bridge the fossil fuel-based energy industry of today with low-carbon alternatives.
CAMBRIDGE, Mass.--The chief executive of Duke Energy, James Rogers, is an unlikely advocate for policies to restrict greenhouse gas emissions. But the man who is building two new coal power plants is just that.
Rogers delivered a keynote speech at the MIT Energy Conference here on Saturday where he called for policies and technologies to bridge the fossil fuel-based energy industry of today with low-carbon alternatives.
Rogers heads a company that generates 90 percent of its electricity from burning coal or nuclear power to serve its 4 million customers. So it's not surprising that he says that "coal is not a four-letter word."
But even with his company's marriage to fossil fuels, the potential influence of Duke Energy and its like over the future of the energy industry is undeniable: Duke's capital budget to invest in technology and infrastructure is $5 billion this year.
Meanwhile, the total amount of venture capital that went into clean tech start-ups last year was in the range of $3 billion to $4 billion.
Rogers is one of several industry CEOs calling for regulations that put a price on polluting carbon dioxide and Duke Energy is a member of U.S. CAP (United States Climate Action Partnership), a consortium of large corporations trying to influence policy.
Technology research should be funded now without waiting for carbon regulations, which he expects to come into force in 2009 and 2010 followed by a transition period.
"A vision of a low-carbon world is a hallucination without technology," Rogers said. He said the U.S. federal government is funding research and development in energy at 50 percent of the level it was in the 1970s.
Energy efficiency technology, such as, should be adopted immediately. But policy makers need to create the same incentives for energy efficiency as they are for renewable energy, like wind and solar, he argued.
He called for "decarbonizing" the electricity power grid. Once plug-in hybrid vehicles come online, a cleaner power system will effectively address cleaning the transportation sector as well, he said.
"I think the technology can do it. We just need to spend the money," he said, complaining about a lack of focus on climate change among policy makers. "Where the hell is the sense of mission? The mission is solving climate change."
At the same time, Rogers cautioned against policies that will dramatically raise the price of electricity for consumers.
In particular, he said that certain states are at a disadvantage to one policy proposal that is the equivalent to a carbon tax because they generate power from coal, which is a dirtier form of power generation than natural gas or nuclear.
"If you have a consumer revolt, one, it will never get passed and secondly, even it does, it gets repealed. So it's very important for us to get that right...
(Policy) has got to be affordable, it's got to be a transition, it has got to make sense, and we need a political consensus to go forward. We can't afford to get started and stop. And we can't delay. We need to get started even faster," he said.
Rogers also called for a fundamental change to utility regulation that does not tie the company's revenues to the amount of power it sells.
Instead, the utilities that can run their power networks most efficiently through software should be the most successful financially, he said.
"I want to change my model so that I create value not by building power plants. I create value by optimizing those networks," Rogers said.