Transitioning to a low-carbon power and energy system is the single most complex, high-stakes shift my team and I have navigated in 12 years as a power and energy supplier. For decades, our business model revolved around delivering reliable, baseload power to factories, hospitals, and homes with assets tailored to consistent, on-demand output. Today, every decision—from which new project to greenlight to how we adjust our existing fleet—bears the weight of this transition, and the challenges are far less about switching a switch and far more about untangling interconnected technical, financial, regulatory, and operational hurdles that have no quick fixes. Power and Energy
The first, and most immediate, challenge we face is grid reliability, or the fear of blackouts that has lingered in the back of every energy professional’s mind since the 2021 Texas crisis, when untested wind and solar fleets combined with a frozen natural gas fleet left millions without power for days. Wind and solar are variable by nature—they only generate power when the wind blows or the sun shines—and our current grids were built for dispatchable power: power that can be turned up or down on command to match demand. For example, on a mild spring weekend in our service territory, residential AC use drops, but a series of sunny days means our rooftop and utility-scale solar farms are producing 30% more power than the local grid needs. We can’t flip a solar panel off, so we have to curtail that excess power—throwing away clean energy that could have otherwise displaced fossil fuels. Conversely, on a cloudy winter week when 20% of our wind turbines are down for maintenance, we need backup power that can ramp up quickly—but our old fossil fuel plants were designed to run 24/7, not to start up in minutes to fill gaps between variable renewables and steady demand.
Energy storage is the obvious solution here, but it comes with its own set of gaps. Lithium-ion batteries, the most mature storage technology, can discharge power for 4–6 hours at a time—great for evening peaks after a sunny day, but useless for multi-day stretches when a winter storm knocks out wind and solar for days. Long-duration storage technologies like flow batteries or compressed air energy storage are still in pilot stages, unproven at scale and too expensive to deploy across our entire fleet. Last year, we tested a 10-megawatt flow battery project in partnership with a local university, but it required $2.2 million in grants to get off the ground, and even then, it could only store 24 hours of power, not the 3–5 days we need to match extreme weather events. Add to that the supply chain bottlenecks for critical minerals like lithium and cobalt, which are already facing price volatility as demand for batteries surges, and it’s clear that storage isn’t a silver bullet—it’s a piece of a puzzle that we don’t have all the parts for yet.
Financial barriers are another layer that can’t be overlooked. As a power and energy supplier, our margins are slim—we operate in a regulated market where rates are set to cover costs, plus a modest return for shareholders. Building new low-carbon assets—whether wind farms, solar arrays, or the storage to back them up—costs 2–3 times more than building a natural gas peaker plant, the traditional backup for variable renewables. For example, a 50-megawatt wind farm costs roughly $120 million to build, while a comparable natural gas peaker plant costs $40 million. That gap means we need to secure long-term power purchase agreements (PPAs) with customers to lock in revenue and justify the upfront investment, but many of our industrial clients are still hesitant to sign 15-year PPAs for renewables when their own businesses face uncertain demand. Small businesses and residential customers, meanwhile, often can’t afford the premium on their energy bills that many new low-carbon projects require, even though the long-term savings are significant.
Carbon pricing and incentives help, but they’re inconsistent and fragmented across our region. Federal tax credits for wind and solar have extended our timeline for new projects, but state-level regulations vary widely—some states require us to hit 100% carbon-free by 2040, while neighboring states have no such targets. This creates uncertainty for long-term planning: if we build a wind farm today that would operate for 30 years, we can’t be sure what the regulatory landscape will look like in 10 years, whether those tax credits will be renewed, or if we’ll be able to connect that wind farm to the transmission lines that carry power to population centers. Transmission is a huge, often underdiscussed bottleneck too. Most of our best wind and solar resources are located in rural areas, hundreds of miles from the cities that need the power. For example, our largest wind farm is located in the western part of our service territory, but the transmission lines that carry that power to the eastern cities are at maximum capacity. We’ve been waiting 7 years for a new transmission line to be approved, delayed by land use disputes, environmental reviews, and funding gaps. In the meantime, we can’t connect new wind farms, so we’re leaving clean power on the table and relying more on fossil fuels than we should.
Operational and workforce challenges add another layer of complexity. Our existing fleet is made up of 20 natural gas plants and 5 coal plants that we’re gradually retiring. Retrofitting or decommissioning these assets isn’t as simple as flipping a switch: decommissioning a coal plant requires safely handling millions of tons of ash and retrofitting to meet new environmental standards, which is a years-long, high-cost process. Last year, we announced plans to retire a 1980s coal plant in our territory, but that decision sparked pushback from local residents who rely on the jobs at the plant, as well as concerns from local policymakers about keeping energy rates stable as we transition. On the flip side, building new renewable assets requires a different set of skills: we need technicians who can maintain solar panels and wind turbines, software engineers to manage grid balancing, and experts in energy storage and long-duration technologies. Many of our existing workers have decades of experience maintaining fossil fuel plants, and we’ve invested in training programs to upskill them—but there’s a national shortage of workers with these new green energy skills, and competition for talent is fierce. Last year, we had 12 open positions for wind turbine technicians and only 3 qualified applicants.
Regulatory and policy uncertainty isn’t just a short-term challenge—it’s a long-term one. Our company relies on 20-year capital plans to make strategic investments, but recent shifts in federal policy, trade disputes over solar panel imports, and state-level rollbacks of renewable mandates have made it impossible to plan with certainty. For example, two years ago, we locked in a deal to import solar panels from a Southeast Asian supplier, but a new tariff on those panels added 18% to the cost, making the project unprofitable. We had to renegotiate with a domestic supplier, which took 6 months and delayed construction by a full year, pushing our timeline for hitting our 2030 carbon reduction targets back by 2 percentage points.
Despite all these challenges, we’re not standing still. Last year, we retired two of our oldest coal plants and added 300 megawatts of utility-scale solar, enough to power 50,000 homes. We partnered with a local school district to bring rooftop solar to 15 of their buildings, cutting their energy bills by 12% and reducing our reliance on fossil fuels. We’re also investing in demand response programs, where we pay industrial customers to reduce their energy use during peak periods, allowing us to avoid running fossil fuel peaker plants. But we need to collaborate more—with policymakers, regulators, customers, and other energy providers—to solve these systemic challenges.
As a power and energy supplier, our goal is simple: deliver reliable, affordable power while cutting carbon emissions. The transition isn’t just a technical or financial challenge—it’s a collective one that requires everyone in the energy ecosystem to work together. If you’re a business owner, industrial operator, or organization looking to partner on low-carbon energy solutions, we’d welcome the chance to discuss how we can work together to build a cleaner, more resilient power system for the future.
Soil and Rock Stabilization System References
- U.S. Energy Information Administration. (2023). Electric Power Annual.
- International Energy Agency. (2022). Global Energy Transition Outlook.
- North American Electric Reliability Corporation. (2022). Long-Term Reliability Assessment.
- Lazard. (2023). Lazard’s Levelized Cost of Energy Analysis.
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