Deep Decarbonization in the U.S. Implications for CPP & Near-term Decisions
Jack Moore, Director of Transmission AnalysisEnergy & Environmental Economics (E3)
CTAEE/EIAustin, TexasApril 8, 2015
Energy and Environmental Economics, Inc. (E3)
Electricity sector specialists, founded 1989
Rigorous analysis on a wide range of energy issues
Advise utilities, regulators, gov’t agencies, power producers, technology companies, and investors
Offices in San Francisco and Vancouver, international practice includes China and India
Key advisor to California state government on climate policy, electricity planning, energy efficiency
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Deep Decarbonization Pathways Project
• National strategies to keep global warming below 2°C
15 countries, >70% of current global GHG emissions
• OECD + China, India, Brazil, South Africa, Mexico, Indonesia
July 2014 report to UN Secretary General Ban Ki-moon
Nov 2014 US Report by E3, LBNL, PNNL team
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US Report focus: What would it take for US to achieve 80% GHG reduction below 1990 level by 2050?
Report available at http://unsdsn.org
DDPP Aggregate CO2 Trajectories
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DDPP modeling crates potential for comparisons & benchmarking similar metrics for low-carbon action across countries (rather than exclusively annual CO2)
USA
Analysis explores implications of 80% reductions as long term target
CO2 from energy in 2010 was 5405 MMT (17 tons/person)DDPP US 2050 target is 750 MMT (1.7 tons/person)
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US GHG emissions by economic sector
Pathway A
Pathway B
2050 analysis is important for avoiding intermediate solutions that fall short of long term goals
750 MMT
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PATHWAYS model
E3’s climate policy modeling platform built in Analytica(US & CA versions)
Multi-sector model (80 demand; 20 supply) with sophisticated infrastructure stock representation to 2050
Hourly electricity dispatch model; sensitivity & uncertainty analysis
Conservative assumptions about economy, lifestyles (EIA Reference Case for population & economic growth)
PATHWAYS Model: Sectoral and Geographic Granularity
9 US Census regions separately modeled
Allows for a better understanding of impacts and differences in regional options for future energy systems
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Electricity sector solutions
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Electricity sector is of paramount importance and
requires hourly representation
Hourly electricity supply and demand is balanced for three regions, approximates U.S. interconnections (excludes Canada) • Western, Eastern, Texas
PATHWAYS Model: Physical Infrastructure Representation
80 demand sectors, 20 supply sectors
Annual time steps with equipment lifetimes
Aligns with the structure of policymaker goals
Illustrates inertia of the physical energy system
Makes decarbonization pathways “real”
02468
101214161820
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Reference Gasoline LDV PHEV Gasoline EV
050
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Reference Gasoline LDV PHEV Gasoline EV
y gNew Vehicles by Vintage yTotal Stock by Year
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KEY RESULTS: Decarbonizing U.S. economy depends on 4 energy transitions
1. Efficiency and Conservation
3. Decarbonize electricity
2. FuelSwitching
4. Decarbonize fuels (liquid & gas)
Reduce energy use per capita (MMBtu/person)
Increase share of electricity & H2 in total
final energy (%)
Reduce emissions intensity (tCO2e/MWh)
Reduce emissions intensity (tCO2/EJ)
• High efficiency residential & commercial buildings
• Industrial efficiency
• Transportation efficiency & smart growth
• Electric heat pumps for HVAC, water heat in buildings
• Electric and/or fuel cell vehicles in transportation
• Increase in renewable generation, increase in nuclear and/or CCS electricity generation varies by scenario
• Liquid biofuels in vehicles or biogas & synthetic decarbonized gas in pipeline for buildings & industry
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U.S. DDPP results consistent with U.S. 2025 climate pledge with China
Source: NY Times November 12th, 2014 + Deep Decarbonization Pathways in the United States, 2014
E3 DDPP Results Overlay
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Multiple Pathways to Deeply Reduce U.S. Energy Emissions
tonn
esC
O2e
0
10
20
2010 2030 2050
Per capita emissions
5,153 5,639
746 740 747 741 -
1,000
2,000
3,000
4,000
5,000
6,000
2014 2050Reference
2050 Mixed 2050 HighRenewables
2050 HighNuclear
2050 HighCCS
MM
T C
O2
Cost ~ 1% GDP
(-0.2% − +1.8%)
12Pathways to Deep Decarbonization in the United States
Scenario High Renewables High Nuclear High CCS Mixed
Electric generation
~ 70% wind, solar, geo by 2050
~40% nuclear by 2050
~55% CCS by 2050
Mix of nuclear,CCS, renewable
Fuelstrategy
Decarbonizepipeline gas to replace liquid fuel
Hydrogen from electricity to replace liquid fuel
Limited fuel switching, some biofuels
Decarbonizepipeline gas to replace liquid fuel
Maintransport fuel
Electricity, pipelinegas, fossil diesel
Hydrogen, biofuel, fossil diesel
Electricity, biodiesel
Mix of hydrogen, electricity, fossil, pipeline gas
Light dutyvehicle
EV, PHEV FCV EV, PHEV Mix of EV, PHEV, FCV
Pipeline gas
~60% biomass, 15% fossil NG, 15% synthetic NG
~60% fossil NG, 35% biomass
~80% fossil NG
~80% biomass, 7% hydrogen, 7% synthetic NG
Different Pathways to 80% Reduction
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Current U.S. energy system in 2014
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Decarbonized energy system in 2050
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Electricity plays much larger role in low-carbon economy
Electricity Increasingly Dominated by Non-Dispatchable Generation
FossilCCS
SolarSolar
0
5
10
15
20
25
30
35
2014 2018 2022 2026 2030 2034 2038 2042 2046 2050
Exajou
les(EJ)
Fossil
NuclearHydro
Wind
Solar
CCS
Pathways to Deep Decarbonization in the United States, Mixed case results
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Mixed Case: Electricity Demand by Fuel Type
Electricity Supply: Regional Generation Mix by Decade (Mixed Case)
Coal
Nuclear
Gas
Wind
Solar
Gas w/CCS
Technology Generation Share Texas – High Renewables Case
Coal
Gas
Nuclear
Solar
Wind
Generation Dispatch & Balancing(Texas – High Renewables Case)
Electric Supply Electric Demand
Supp
ly (M
W)
In High Renewables, High Nuclear and Mixed scenarios: flexible loads (esp production of hydrogen or methane) deployed to help balance intermittent renewable generation
In High CCS scenario: natural gas with CCS is dispatchable, solving grid integration challenges
Wind
NuclearSolar
Gas
Curtailment
Conventional Loads
H2P2G
Electricity used to produce hydrogen and synthetic methane balance variable generation (wind, solar) & provide lower carbon fuel
Natural gas pipeline is partly decarbonized using gasified biomass and electricity-produced fuels with low lifecycle emissions
Decarbonized pipeline gas is used to replace liquid fossil fuels in industry, heavy duty transport
Biomass not used for ethanol because it is scarce and has better uses, such as biogas and biodiesel, while alternatives exist for LDV fuels
Deep Decarbonization Across Sectors: Some Complementary Options
U.S. Cost Components
Stock Costs
Diesel Savings
Gasoline Savings
Electric Costs
Gas Costs
Cost mostly fixed costs, savings mostly fuel savings
Lower net cost if technology costs lower, fossil fuels higher
21Pathways to Deep Decarbonization in the United States, High renewables case
Median 2050 net energy system cost ~1% of GDP ($40T)Uncertainty range -0.2% to + 1.8%
U.S. Net Energy System Cost by Sector
‐$100
$0
$100
$200
$300
$400
$500
$600
$700
$800
2014 2018 2022 2026 2030 2034 2038 2042 2046 2050
Billion
s
Residential Commercial Transportation Industrial Total
Pathways to Deep Decarbonization in the United States, Mixed case results 22
Incremental Average Household Spending in 2050 ($/Month)
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Implications for near term planning
Multiple pathways exist that are feasible to reach 80% reductions emphasizing different technologies
Planning must take infrastructure inertia into account
Important if plan to meet 111d can also set state up for ability to make further reductions
• There are dead-ends that provide short-term GHG reductions but don’t lead to 80% by 2050
• Other options set up the US (or ERCOT) to more easily make further emissions reductions post 2030.
Coordination across sectors can help
• Certain low-carbon options in other sectors – including hydrogen and synthetic methane production - could also help address electric sector balancing issues but must begin to consider carbon reduction plans across sectors (beyond electricity); Accounting for emissions reductions outside of electric sector needs to be clear.
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Investments choices today will determine capacity to reduce emissions over the next 35 years.
A car purchased today, is likely to replaced at most 2 times before 2050. A residential building constructed today, is likely to still be standing in 2050.
0 5 10 15 20 25 30 35
Residential building
Electricity power plant
Industrial boiler
Heavy duty vehicle
Light duty vehicle
Space heater
Hot water heater
Electric lighting
Equipment/Infrastructure Lifetime (Years)
2015 2050
4 replacements
3 replacements
2 replacements
2 replacements
1 replacements
1 replacements
1 replacements
0 replacements
2030
Average lifetimes, actual results will vary 25
Thank You!Jack Moore, Director of Transmission Analysis Energy and Environmental Economics, Inc. (E3)101 Montgomery Street, Suite 1600San Francisco, CA 94104Office: 415-391-5100Email: [email protected]
ADDITIONAL SLIDES
Energy Supply and Demand Transitions – All Scenarios
Mixed Case: High Renewables Case:
High CCS Case: High Nuclear Case:
Energy Demand by Sector
0
10
20
30
2014 2018 2022 2026 2030 2034 2038 2042 2046 2050
EJ
Residential
Electricity Pipeline Gas Residual Fuel Oil LPG Kerosene Biomass
0
10
20
30
2014 2018 2022 2026 2030 2034 2038 2042 2046 2050
EJ
Commercial
Electricity Pipeline Gas Diesel Fuels LPG Kerosene
0
10
20
30
2014 2018 2022 2026 2030 2034 2038 2042 2046 2050
EJ
Transportation
Electricity Diesel Fuels Gasoline
Jet Fuel Hydrogen Gas Fuels (CNG/LNG)
0
10
20
30
2014 2018 2022 2026 2030 2034 2038 2042 2046 2050
EJ
Industrial
Asphalt & Road Oil Biomass Coal Coke
Diesel Electricity Gasoline Pipeline Gas
Pipeline Gas Supply and SectoralDemand (Mixed Case)
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0
2
4
6
8
10
12
14
16
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2014 2018 2022 2026 2030 2034 2038 2042 2046 2050
Fina
l Ene
rgy in 2050 (EJ)
Natural Gas Hydrogen
Power to Gas Biogas
Natural Gas w/ End‐Use Capture Residential
Commercial Transportation
Industrial
PIPELINE GASDEMANDSECTORS:
Industrial
Transportatio
CommercialResidential
PIPELINE GASSUPPLYSOURCES:
Bio-SNG
Natural GasH2P2G
$0
$10
$20
$30
$40
$50
2010 2020 2030 2040 2050
GDP…
Conservative assumptions about economy, lifestyles
Technology is commercial or near-commercial
Environmental sustainability (limits on biomass, hydro)
Infrastructure inertia
Electricity reliability
U.S. GDP (Trillion $2012)
166% increase
0
100
200
300
400
500
2010 2020 2030 2040 2050
U.S.…
U.S. population (Millions)
40% increase
U.S. National Energy Modeling System and 2013 Annual Energy Outlook reference case
PATHWAYS Design Principles
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Four Low-Carbon Scenarios: Generation Mix by Year (West)
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Comparison of 2030 Western Region Spring-time Generation Profile
Idealized dispatch across WECC with flexible fuel production loads allows renewable integration in both scenarios.
High Renewables Scenario requires reduction in base load generation during some hours to accommodate wind & solar
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0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
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MW
Hour
Curtailment
Storage Discharge
Storage Charge
Wind
Solar
Gas
Other Renewable
Hydro
Oil
Nuclear
CCS
Coal
High Renewables Scenario High CCS Scenario
May 2030 (week 20), hours 1-24
Wind SolarGas
Geo, Bio, small hydro
Large hydro NuclearCCS
Coal
Example of Daily Resource Balancing by Season: High Renewable Scenario
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Early Spring
WinterFallSummerSpringHigh wind, less solar
High loads, more reliance on gasLow loads, high
solar, wind & hydro,
reductions in coal output
E3, UC, LBNL, PNNL team
Williams et al. Nov. 2014
What would it take for US to achieve 80% GHG reduction below 1990 level by 2050?
• Is it technically feasible?
• What would it cost?
• What physical changes are required?
• What economic and policy changes are implied?
U.S. Deep Decarbonization Report
36Report available at http://unsdsn.org
PATHWAYS Model Methodology: Bottom-Up Energy Demand
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CFL
Incandescent
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Total Residential Final Energy for Lighting
LEDsCFLs
T12
Infrastructure stock rollover model (keeps track of “stuff” e.g. Number of light bulbs by type)
0.00E+001.00E+122.00E+123.00E+124.00E+125.00E+126.00E+127.00E+128.00E+129.00E+121.00E+13
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Reside
ntial D
eman
d (lu
men
s/year)
+
=
Lighting Stock Service Demand
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Residential Building ShellWest South Central Census Division (AR,LA,OK,TX)
0%10%20%30%40%50%60%70%80%90%
100%
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Pen
etra
tion
by
Typ
e
Reference
Energy Star
PathIECC 2000
0.00.10.20.30.40.50.60.70.80.91.0
Reference IECC2000
EnergyStar
PATH
Sh
ell E
ffic
ien
cy I
nd
ex
Heating
Cooling
00.050.1
0.150.2
0.250.3
0.350.4
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tin
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eman
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EJ)
00.20.40.60.8
11.21.41.61.8
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Air
Con
dit
ion
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eman
d (
EJ)
AEO Ref Case (for Calibration)
DDPP High Renewables Case
AEO Ref Case (for Calibration)
DDPP High Renewables Case
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