Transcript Managing Our Environmental Footprint

Electricity Technologies in a
Carbon-Constrained World
Rural Electric Statewide Managers’ Association
January 18, 2008
Bryan Hannegan
Vice President, Environment
About EPRI
Together…Shaping the Future of Electricity
• Founded in 1973 as an independent, nonprofit
center for public interest energy and
environmental research.
• Objective, tax-exempt, collaborative electricity
research organization
• Science and technology focus--development,
integration, demonstration and applications
• Broad technology portfolio ranging from nearterm solutions to long-term strategic research
© 2007 Electric Power Research Institute, Inc. All rights reserved.
2
Large and Successful R&D Collaboration
• More than 450 participants in over 40 countries
– Over 90% of North American electricity generated
• 66 technical programs
– Generation
– Power Delivery and Markets
– Nuclear
– Environment
– Technology Innovation
• 1600+ R&D projects annually
• 10 to 1 average funding leverage
• Research is directed to the public benefit
• Limited regulatory, judicial and legislative participation
© 2007 Electric Power Research Institute, Inc. All rights reserved.
3
EPRI’s Role
Basic
Research
&
Development
National
Laboratories
Collaborative
Technology
Development
Integration
Application
EPRI
Technology
Commercialization
Suppliers
Vendors
Universities
Depends Upon The Specific Technology or Discipline
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Context
• Growing scientific and public
opinion that CO2 emissions are
contributing to climate change…
• Priority of 110th Congress …
• U.S. responsible for 1/4 of
global CO2 emissions…
• Electricity sector responsible for
1/3 of U.S. CO2 emissions…
• General agreement that
technology solutions are needed…
© 2007 Electric Power Research Institute, Inc. All rights reserved.
5
How can the electricity
industry respond?
With accelerated deployment of
advanced electricity technologies,
how quickly could the U.S. electric
sector cut its CO2 emissions?
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U.S. Electricity Sector CO2 Emissions
3500
U.S. Electric Sector
CO2 Emissions (million metric tons)
3000
2500
2000
1500
• Base case from EIA “Annual Energy Outlook 2007”
1000
500
0
1990
–
includes some efficiency, new renewables, new nuclear
–
assumes no CO2 capture or storage due to high costs
 Using EPRI deployment assumptions, calculate change in
CO2 relative to EIA base case
1995
© 2007 Electric Power Research Institute, Inc. All rights reserved.
2000
2005
2010
7
2015
2020
2025
2030
Technology Deployment Targets
Technology
EIA 2007 Base Case
EPRI Analysis Target*
Load Growth ~ +1.5%/yr
Load Growth ~ +1.1%/yr
30 GWe by 2030
70 GWe by 2030
12.5 GWe by 2030
64 GWe by 2030
No Existing Plant Upgrades
40% New Plant Efficiency
by 2020–2030
150 GWe Plant Upgrades
46% New Plant Efficiency
by 2020; 49% in 2030
Carbon Capture and Storage
(CCS)
None
Widely Available and Deployed
After 2020
Plug-in Hybrid Electric Vehicles
(PHEV)
None
10% of New Vehicle Sales by
2017; +2%/yr Thereafter
Distributed Energy Resources
(DER) (including distributed solar)
< 0.1% of Base Load in 2030
5% of Base Load in 2030
Efficiency
Renewables
Nuclear Generation
Advanced Coal Generation
EPRI analysis targets do not reflect economic considerations, or potential regulatory and siting constraints.
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Electric Sector CO2 Reduction Potential
3500
* Achieving all targets is very aggressive, but potentially feasible.
3000
U.S. Electric Sector
CO2 Emissions (million metric tons)
EIA Base Case 2007
2500
2000
Technology
1500
EIA 2007 Reference
Target
Load Growth ~ +1.5%/yr
Load Growth ~ +1.1%/yr
30 GWe by 2030
70 GWe by 2030
12.5 GWe by 2030
64 GWe by 2030
No Existing Plant Upgrades
40% New Plant Efficiency
by 2020–2030
150 GWe Plant Upgrades
46% New Plant Efficiency
by 2020; 49% in 2030
CCS
None
Widely Deployed After 2020
PHEV
None
10% of New Vehicle Sales by 2017;
+2%/yr Thereafter
< 0.1% of Base Load in 2030
5% of Base Load in 2030
Efficiency
Renewables
Nuclear Generation
1000
Advanced Coal Generation
500
DER
0
1990
1995
© 2007 Electric Power Research Institute, Inc. All rights reserved.
2000
2005
2010
15
2015
2020
2025
2030
Key Technology Challenges
• Smart grids and communications infrastructures to enable
end-use efficiency and demand response, distributed generation,
and PHEVs.
• Transmission grids and associated energy storage
infrastructures with the capacity and reliability to operate with
20–30% intermittent renewables in specific regions.
• New advanced light-water nuclear reactors combined with
continued safe and economic operation of the existing nuclear
fleet and a viable strategy for managing spent fuel.
• Coal-based generation units with CCS operating with 90+%
CO2 capture and with the associated infrastructure to transport
and permanently store CO2.
© 2007 Electric Power Research Institute, Inc. All rights reserved.
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“Smart” Grid for Efficiency and Renewables
Efficient
Building
Systems
Utility
Communications
Internet
Consumer Portal
and Building EMS
Distribution
Operations
Dynamic
Systems
Control
Advanced
Metering
Renewables
PV
Control
Interface
Plug-In Hybrids
Data
Management
© 2007 Electric Power Research Institute, Inc. All rights reserved.
Distributed
Generation
and Storage
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Smart
End-Use
Devices
Near-Term Nuclear Plant Deployment
*Westinghouse
AP1000 (1115 MWe)
MHI APWR (1700 MWe)
AREVA US EPR (1600 MWe)
Current Status of
Announced Intentions
*ABWR (1371 MWe)
Technology
Units
AP1000
10
TBD
10
EPR
5
ESBWR
3
ABWR
2
APWR
2
GE ESBWR (1535 MWe)
* Design Certified
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Coal with CCS Development Timeline
2007
2005
Pilots
●
20102010
2015
2020
2015
2025 2020
Chilled Ammonia Pilot
Other Pilots
Demonstration
●
●
AEP Mountaineer
Southern/SSEB Ph 3
Basin Electric
●
Other Demonstrations
Integration
●
FutureGen
●
●
UltraGen I
UltraGen II
Need Multiple Pilots and Demonstrations in Parallel
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What is the potential value of these
advanced electricity technologies to
the U.S. economy and to consumers?
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Future CO2 Emissions Scenarios
9000
U.S. Economy
CO2 Emissions (million metric tons)
8000
Suppose the U.S. and other industrialized nations adopt one of
the following CO2 emissions constraints:
Policy Scenario A:
7000
- 2%/yr decline beginning in 2010
6000
A
B
C
Policy Scenario B:
5000
- Flat between 2010 - 2020
4000
- 3%/yr decline beginning in 2020
- Results in “prism”-like CO2
constraint on electric sector
3000
2000
Policy Scenario C:
1000
- Flat between 2010 - 2020
0
2000
2010
2020
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2030
2040
2050
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- 2%/yr decline beginning in 2020
Electricity Technology Scenarios
Limited
Portfolio
Full
Portfolio
Unavailable
Available
New Nuclear
Existing Production
Levels
Production Can
Expand
Renewables
Costs Decline
Costs Decline Further
New Coal and Gas
Improvements
Improvements
Unavailable
Available
Improvements
Accelerated
Improvements
Supply-Side
Carbon Capture and Storage (CCS)
Demand-Side
Plug-in Hybrid Electric Vehicles (PHEV)
End-Use Efficiency
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Policy Scenario B
U.S. Electric Generation: Limited Portfolio
8
Coal
Gas
Oil
Hydro
Solar
Demand with No Policy
w/CCS
w/CCS
Nuclear
Wind
Biomass
Demand Reduction
Emissions are reduced in two ways:
7
• Carbon penalty drives price up,
demand down
Trillion kWh per year
6
5
4
3
• Supply shifts to less carbonintensive technologies
2
1
0
2000
2010
2020
2030
© 2007 Electric Power Research Institute, Inc. All rights reserved.
2040
2050
23
Policy Scenario B
U.S. Electric Generation: Full Portfolio
8
Coal
Gas
Oil
Hydro
Solar
Demand with No Policy
w/CCS
w/CCS
Nuclear
Wind
Biomass
Demand Reduction
7
• Demand reduction is limited,
preserving market and
managing cost to economy
Trillion kWh per year
6
5
4
• Availability of CCS and
expanded nuclear allow largescale low-carbon generation
3
2
1
0
2000
2010
2020
2030
© 2007 Electric Power Research Institute, Inc. All rights reserved.
2040
2050
24
Policy Scenario B
Carbon Price Projections
350
250
200
150
Limited
100
Full
Carbon Price
2000
2010
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2020
2030
25
2040
50
0
2050
$/ton CO2 ($2000)
300
Policy Scenario B
Wholesale Electricity Price
180
4.0
+250%
3.5
140
3.0
$/MWh*
120
2.5
Limited
100
2.0
80
1.5
Full
60
+50%
40
*Real (inflation-adjusted) 2000$
0.5
20
0
2000
2010
© 2007 Electric Power Research Institute, Inc. All rights reserved.
1.0
2020
2030
26
2040
0.0
2050
Index Relative to Year 2000
160
Policy Scenario B
U.S. Electric Generation in 2030
Coal
w/CCS
Gas
w/CCS
Hydro
Other Renewables
8%
13%
22%
27%
17%
28%
30%
43%
12%
Limited Portfolio
Full Portfolio
Total: 4,500 TWh
Total: 5,125 TWh
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27
Policy Scenario B
Natural Gas Markets
14
Natural Gas Consumption (TCF)
Non-Electric Sector
Electric Sector
12
Price
25
10
20
8
15
6
10
4
5
2
0
0
2000
2010
2020
2030
2040
2050
2000
Limited Portfolio
© 2007 Electric Power Research Institute, Inc. All rights reserved.
2010
2020
2030
2040
Full Portfolio
28
2050
Natural Gas Wellhead Price ($/MCF)
30
Policy Scenario B
-1.5
Value of R&D Investment
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29
Full Portfolio
$1 Trillion
+ CCS Only
+ Nuclear Only
+ Efficiency Only
+ PHEV Only
-1.0
Limited Portfolio
-0.5
+ Renewables Only
0.0
($Trillions)
Change in GDP Discounted through 2050
Impact on U.S. Economy
Cost of
Policy
Avoided
Policy Costs
Due to
Advanced
Technology
Full
Full
-0.5
Policy Scenario C:
2020 – 2%
Limited
Policy Scenario B:
2020 – 3%
Limited
Full
Policy Scenario A:
2010 – 2%
Limited
0.0
($Trillions)
Change in GDP Discounted through 2050
Economic Cost Sensitivity
Cost of
Policy
Avoided
Policy Costs
Due to
Advanced
Technology
-1.0
-1.5
Loss of “when” flexibility increases policy cost,
but increases technology value
-2.0
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30
Summary of Economic Analysis
Absent advanced electricity technologies, CO2 constraints result in:
• Price-induced “demand reduction”
• Fuel switching to natural gas
• Higher electricity prices
• High cost to U.S. economy
With advanced electricity technologies, CO2 constraints result in:
• Growth in electrification
• Expanded use of coal (w/CCS) and nuclear
• Lower, more stable electricity prices
• Reduced cost to U.S. economy
© 2007 Electric Power Research Institute, Inc. All rights reserved.
31
How might the specific details of
climate policy design make a
difference?
With a nod of thanks to Anne and CRA …
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32
EPRI/CRA Analysis of CA Climate Policy
California has set ambitious climate policy goals
• Governor: GHG emission reductions of 80% below 1990 levels by 2050
• AB 32: 6 GHGs; 1990 levels by 2020; uncertain post-2020
Early economic studies show net benefit to state
• Climate Action Team Report – March 2006
+$4 billion and +83,000 jobs
• UC Berkeley Report – January 2006
+$60 billion and +20,000 jobs
• Center for Clean Air Policy – January 2006
no net cost to consumers
Later criticism of early studies:
• Omit key cost components of some GHG reduction options
• Overestimate savings of some GHG reduction options
• Ignore difficulty of enacting policies required for some GHG options
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33
Our Approach
Integrated Electricity Modeling System
Scenario
Definition
MS-MRT
EPPA
Global Trade Models
MRN
NEEM
State-level
macroeconomic
model
National
electricity
model
• Electricity prices
• Coal prices
• Electricity gas use
• Electricity demand
• Carbon price
• Industrial coal use
Models included in iterative process
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34
NEEM Output
•
•
•
•
Electricity prices
Allowance prices
Coal prices
Unit-level environmental
retrofits
• New capacity
Implementation Scenarios
• Total of 20 scenarios reviewed that represent the full range of
implementation possibilities, e.g.
– Pure Trade – Comprehensive cap-and-trade program with standard assumptions
about technology, except no new nuclear and renewables-only imports
– LCA –low-cost-assumptions: high end energy efficiency, lowest capital costs for
renewables, rapid introduction rate of non-emitting transportation backstop,
doubling DSM benefits of “DSM Benefit” case
– SV-LCA – Same as Pure Trade but with price safety-valve set at CO2 price in
scenario with low-cost-assumptions (LCA)
– Trgt40 – In 2050, achieve 40% emissions reduction below 1990 levels, with no
new nuclear and renewables-only imports
– Trgt80 – In 2050, achieve 80% emissions reduction below 1990 levels, with no
new nuclear and renewables-only imports
– Nuclear80 – Same as Trgt80, but allow unrestricted imports of nuclear
– RPS 20 – Meet State Renewable Portfolio Standard (RPS) of 20% renewable
energy by 2020, but don’t impose an overall emissions cap
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35
Projected California CO2 Emissions
880
Baseline
RPS_20
770
SV_LCA
(Million metric tons of CO2)
Pure_Trade
660
550
Trgt40
Nuclear 80 &
Trgt80
440
330
220
110
0
2010
1990 Levels of
Emission
2015
2020
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2025
2030
36
2035
2040
2045
2050
California CO2 Permit Prices
400
3.7
300
2.8
200
1.8
100
0.9
0
0.0
2015
2020
Pure_Trade
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2025
Trgt40
2030
2035
Trgt80
2040
Nuclear80
37
2045
SV_LCA
2050
($ per gallon of gasoline equivalent)
($ per metric ton of CO2)
500
Wholesale Electricity Prices Increase
100
90
(2003$/MWh)
80
70
60
Baseline
50
Pure_Trade
40
30
20
10
0
2010
2015
2020
2025
2030
2035
2040
2045
2050
Year
Higher electricity prices are a direct result of carbon constraint:
+62% by 2020 under Pure_Trade scenario
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38
Higher Prices Reduce Electricity Demand …
600
500
(MWh)
400
Baseline
300
Pure_Trade
200
100
0
2010 2015 2020 2025 2030 2035 2040 2045 2050
Year
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39
… and Regional Generation Mix Changes
30
Other: 2.0
Wind and geothermal
increase in-State…
20
Other
WT
Delta Capacity (GW)
WT: 20.1
STOG: 1.5
10
PeakG: 1.3
CC: 6.7
Geo: 3.4
Coal: 0.9
0
PV
STOG
PS
PeakG
Nuc
Hydro
Coal: -14.1
CC: -10.5
Geo
CT
-10
Coal
CC
STOG: -10.6
-20
Gas-fired power plants
move out of state
Out-of-state coal
capacity doesn’t get built
-30
Instate
© 2007 Electric Power Research Institute, Inc. All rights reserved.
Rest-WECC
40
CA Electric Sector Response
Under the Pure_Trade scenario, electricrelated CO2 cuts fall into 3 “buckets”:
• Reductions in short-term purchases of
imported power
• Changes in longer-term contracts for
imported power: coal contracts go to
zero
• Changes in instate generation mix,
including out of state plants wholly
owned by CA LSEs
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But Electricity Grows as Share of Total Energy
35
California
kWh/ Total Final Energy
30
25
20
Pure_Trade
Trgt40
Trgt80
15
10
5
0
2010
2020
© 2007 Electric Power Research Institute, Inc. All rights reserved.
2030
2040
42
2050
New Investments … But Consumers Spend Less
Pure_Trade Scenario
Pecent Change from Baseline
1.00
0.50
0.00
Consum
-0.50
GSP
-1.00
Invest
-1.50
-2.00
-2.50
2010
2015
2020
2025
2030
Year
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43
2035
2040
Cost to California Depends on Implementation
1.4
Welfare Loss through 2050 (%)
1.2
1
Comprehensive Cap-and-Trade:
Pure_Trade:
OffSets:
Low Cost Assumptions:
$229 billion
$196 billion
$104 billion
Proxies for Command and Control :
Sector Specific Caps :
(optimistic) DSMBenefit:
(pessimistic) DSMCost:
$297 billion
$206 billion
$367 billion
Trgt80
500
Nuclear80
400
DSMCost
0.8
Trgt40
SS_Cap
300
0.6
Pure_Trade
DSMBenefit
200
OffSets
0.4
Max_Imp
SV_LCA
0.2
LCA
100
RPS33
achieve 1990
emissions level
RPS20
0
0
2000
4000
6000
8000
10000
12000
Cumulative Emission Reduction (MMTCO2)
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44
14000
16000
0
18000
Welfare Loss through 2050 ($ Billions)
600
Summary of Findings
All policies analyzed showed real economic costs to state
• Costs ranged from -0.24% to -1.17% through 2050
Broad, market-based cap-and-trade policies are most cost-effective
• Command-and-control or sector-specific caps are more costly
• An allowance price “safety valve” would limit costs, but fewer CO2 reductions
Electric sector plays a pivotal role in achieving CO2 targets
• Changes in power imports, in-state generation mix result
• Electrification of other sectors enables them to meet their CO2 goals
• Cost estimates do not include “system stability” costs
Offsets can play an important role in reducing the costs
• CAT estimates of in-state forestry offsets  $33 billion savings
Role of out-of-state electricity generation needs careful examination
• Stronger rules to prevent “leakage” would drive up costs to California
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45
EPRI Study Conclusions
• The technical potential exists for the U.S. electricity sector
to significantly reduce its CO2 emissions over the next
several decades.
• No one technology will be a silver bullet – a portfolio of
technologies will be needed.
• Much of the needed technology isn’t available yet –
substantial R&D, demonstration is required.
• A low-cost, low-carbon portfolio of electricity technologies
can significantly reduce the costs of climate policy.
• Flexible, market-based climate policies offer significant
economic advantage over sector-specific approaches
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