Transcript Limited Portfolio Full Portfolio

Creating a
Low-Carbon Future
EPRI’s 2009 PrismMERGE Study
US Climate Partnership Association
June 24, 2010
Revis James
Director
Energy Technology Assessment Center
Converging Policy Drivers
– CO2 policy
– Other potential issues
• Ash
• Environmental impact of renewables
• Water availability for power plant cooling
– Existing environmental policies (e.g. SOx, NOx)
– Renewable Portfolio Standards (RPS)/ Renewable
Energy Standards (RES)
© 2010 Electric Power Research Institute, Inc. All rights reserved.
Ever-Present Technical Drivers
• Hedge technology risks
• Recognize long lead times for technology
deployment.
• Meet demand
• Maintain reliability
• Minimize cost
© 2010 Electric Power Research Institute, Inc. All rights reserved.
Capability to Reduce CO2 Emissions
Prism Technology Analysis
 Bottoms-up performance and cost
analysis of key technology options
to reduce electric sector CO2
emissions
– Based on domain expert evaluation of
feasible technology performance,
deployment improvements
– Performance and technology
advancements
 Presumes sustained, successful RD&D
 Updated annually
© 2010 Electric Power Research Institute, Inc. All rights reserved.
2009 Prism Technologies
Performance/ Deployment Assumptions
Technology
EIA Base Case
EPRI Prism Target
Efficiency
Load Growth ~
+0.95%/yr
8% Additional Consumption Reduction by 2030
T&D Efficiency
None
20% Reduction in T&D Losses by 2030
Renewables
60 GWe by 2030
135 GWe by 2030 (15% of generation)
Nuclear
12.5 GWe New
Build by 2030
Fossil
Efficiency
40% New Coal,
54% New NGCCs
by 2030
+3% Efficiency for 75 GWe Existing Fleet
49% New Coal; 70% New NGCCs by 2030
CCS
None
90% Capture for New Coal + NGCC After 2020
Retrofits for 60 GWe Existing Fleet
Electric
Transportation
None
PHEVs by 2010
40% New Vehicle Share by 2025
3x Current Non-Road Use by 2030
Electrotechnologies
None
Replace ~4.5% Direct Fossil Use by 2030
© 2010 Electric Power Research Institute, Inc. All rights reserved.
No Retirements; 10 GWe New Build by 2020;
New Build by 2030
64 GWe
U.S. Electricity Sector
Impact of 2009 Prism Assumptions
U.S. Electric Sector CO2 Emissions
(million metric tons)
3500
3000
EIA 2009 baseline
Efficiency
2500
Renewabl
es
2000
Nuclear
Fossil
Efficiency
CCS
1500
41% below 2005
PEV
ElectroTechnologi
es
58% below 2005
1000
500
0
1990
1995
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2000
2005
2010
2015
2020
2025
2030
Assess Technology Development Strategies
via Energy-Economic Analysis
• Look at electricity sector in context of overall U.S. and
global economy
• Focus on economic output as the metric
• Integrate effect of expected CO2 policy, technology costs
and development for different future technology scenarios
• Models competition between options to investment in the
electric sector with other opportunities in the rest of the
economy.
• Provides a foundation to which additional assumptions/
models re: energy consumption behavior, public policy
can be added.
© 2010 Electric Power Research Institute, Inc. All rights reserved.
MERGE Energy-Economic Analysis Model
 Optimization Model of Economic Activity
and Energy Use through 2050
– Maximize Economic Wealth
 Inputs
– Energy Supply Technologies and Costs for
Electric Generation and Non-Electric Energy
 Constraints
– Greenhouse Gas Control Scenarios
– Energy Resources
 Outputs
– Economy-wide Impact of Technology and
Carbon Constraints
© 2010 Electric Power Research Institute, Inc. All rights reserved.
Assumed CO2 Emissions Limits
8
Assumed Economy-wide CO2 Reduction Target*
7
Historical
Emissions
Billion tons CO2
6
2005 = 5982 mmT CO2
2012 = 3% below 2005 (5803 mmT CO2)
2020 = 17% below 2005 (4965 mmT CO2)
5
Remainder
of U.S.
Economy
4
3
2030 = 42% below 2005
(3470 mmT CO2)
2050 = 83% below
2005 (1017 mmT CO2)
2
U.S. Electric
Sector
1
0
1990
2000
*no international offsets
© 2010 Electric Power Research Institute, Inc. All rights reserved.
83% Reduction in CO2
emissions from 2005
2010
2020
2030
2040
2050
Compare Impact of Contrasting
Technology Scenarios
Limited Portfolio
Full Portfolio
Unavailable
Available
New Nuclear
Existing Production Levels
Production Can Expand
Renewables
Costs Decline
Costs Decline Faster
New Coal and Gas
Improvements
Improvements
Unavailable
Available
Improvements
Accelerated Improvements
Supply-Side
Carbon Capture and Storage
(CCS)
Demand-Side
Plug-in Electric Vehicles
(PEVs)
End-Use Efficiency
© 2010 Electric Power Research Institute, Inc. All rights reserved.
Economic Deployment under
Different Scenarios
7
7
Limited Portfolio
Full Portfolio
6
6
5
Biomass
4
Wind
Solar
4
Hydro
Wind
Nuclear
Biomass
3
3
Hydro
Nuclear
Gas
2
2
Gas
Coal
1
Coal
0
2000
2010
New Coal
+ CCS
CCS
Retrofit
2020
2030
© 2010 Electric Power Research Institute, Inc. All rights reserved.
2040
2050 2000
2010
2020
2030
2040
1
0
2050
Trillion kWh per year
5
Trillion kWh per year
Demand
Reduction
Demand
Reduction
Key Technology Portfolio Insights
• Aggressive energy efficiency needed with either portfolio
– 52% Increase in Demand Reduction with Limited
Portfolio
• Over 20% renewables generation share by 2030 with
either portfolio
– >50% renewables by 2050 with limited portfolio
• If availability of new nuclear and CCS post 2020
uncertain, natural gas power production expands rapidly
– Limited Portfolio – Gas Consumption Increases 275%
from 2010 to 2050
© 2010 Electric Power Research Institute, Inc. All rights reserved.
Technology Transition followed by Transformation
• Full Portfolio Scenario
• 2010 – 2030
– Natural gas
– Reduced demand via efficiency
– Emergence of large-scale renewables
– Retrofit/life-extension of existing plants
• Beyond 2030
– Even more energy management and efficiency.
– Large-scale generation from renewables.
– Nuclear and advanced coal + CO2 capture/storage
© 2010 Electric Power Research Institute, Inc. All rights reserved.
Impact on Busbar Electricity Production Costs
$220
$200
$180
$/Mwh (2007$)
$160
Limited
Portfolio
$140
Limited
Portfolio
Full
Portfolio
160%
$120
Full
Portfolio
BAU U.S. Average Wholesale Electricity Cost *
$100
$80
$60
50%
AverageWholesale
Wholesale Electricity
Cost
20072007
U.S.U.S.
Average
Electricity
Cost
$40
*
$20
Based on estimate of expected business as usual annual investment in generation expansion.
Source: “Transforming America’s Power Industry: The Investment Challenge 2010-2030”, The
Edison Foundation, 2008 (www.edisonfoundation.net) and U.S. DOE Energy Information
Administration 2008 Annual Energy Outlook.
$0
2020
© 2010 Electric Power Research Institute, Inc. All rights reserved.
2030
2040
2050
U.S. CO2 Emissions Allowance Costs
RWJ Calculations
top curve = LP
bottom curve = FP
CO2 Price (2007 $)
300.00
ton CO
$/metric
(2007$)
$/metric
ton 2CO
2
250.00
Limited
Portfolio
200.00
150.00
Full
Portfolio
100.00
50.00
0.00
2020
© 2010 Electric Power Research Institute, Inc. All rights reserved.
2030
2040
2050
-1.0
-1.5
-2.0
-2.5
Full Portfolio
-0.5
Advanced technologies
without CCS or new Nuclear
0.0
Limited Portfolio
Change in Discounted GDP from 2020
Through 2050 ($Trillions)
Impact of CO2 Constraint on U.S. Economy
-3.0
-3.5
Value of R&D Investment
© 2010 Electric Power Research Institute, Inc. All rights reserved.
Cost of
Policy
Reduction
in Policy
Cost with
Advanced
Technology
Cost Trajectories for Decarbonization
Busbar Electricity Cost (2007 cents/kWh)
Cost of Electricity
22
MERGE Projections 2020-2050
2050
2050
20
Limited
Limited
Portfolio
Portfolio
18
16
2040
2040
14
12
2020
2020
10
8
2007
2020
2020
6
Full
Portfolio
2030
2030
2030
2030
2040
2050
Full
Portfolio
4
2
0
0.70
0.60
0.50
0.40
0.30
0.20
Emissions Intensity (metric tons CO2 /MWh)
De-Carbonization
© 2010 Electric Power Research Institute, Inc. All rights reserved.
0.10
0.00
Meeting the Research Challenge
$220
$200
$180
$/Mwh (2007$)
$160
$140
Technology Actions Based
on Meeting the
Limited
Prism Technology
Targets
Portfolio
Limited
Portfolio
RD&D and
Deployment Challenge
Full
Portfolio
$120
$100
$80
$60
Full
Technology Innovation to De-carbonize
While Achieving a Cost of Electricity
PortfolioNear
Today’s Level
Innovation Challenge
AverageWholesale
Wholesale Electricity
Cost
20072007
U.S.U.S.
Average
Electricity
Cost
$40
$20
$0
2020
© 2010 Electric Power Research Institute, Inc. All rights reserved.
2030
2040
2050
Energy-Economic Analysis Results
Key Technology R&D Insights
• Smart Grid technologies will be very important, because
improved end-use efficiency is likely to play a major role
under future policies.
• Energy storage, advanced grid management, and
expanded transmission will be essential so that a large
amount of electricity can be generation from variable
output renewables.
• Reducing cost of nuclear plant construction and
operations, and economic penalty for CO2 capture and
storage will be important, because the collective
generation from coal and nuclear is likely to remain
substantial.
© 2010 Electric Power Research Institute, Inc. All rights reserved.
Transition, then Transformation
• Much of the technology needed to meet many of our
concurrent demands and requirements is either not
available or too expensive.
• Some technologies will be critical to “bridging” the gap
between today and a very different electricity technology
mix in the future.
• Disruption can come in different ways:
– Substantially larger or smaller roles for certain
technologies relative to the past
– Unexpected technology barriers
© 2010 Electric Power Research Institute, Inc. All rights reserved.
Critical Conclusions
• With achievement of aggressive but technically feasible levels of
technology performance and deployment, U.S. electric sector has
potential to reduce CO2 emissions by 41% by 2030.
• An optimal technical and economic strategy is comprised of
aggressive end-use efficiency and a diverse generation technology
portfolio.
– Ensures technological resiliency.
– Lowers overall economic cost of emissions reductions by ~37%.
• All technologies are not yet ready - focused, sustained research,
development and demonstration over the next 20 years is
necessary.
• Decarbonized electricity will be critical in reducing costs of
reducing CO2 emissions from transportation and other economic
sectors.
© 2010 Electric Power Research Institute, Inc. All rights reserved.
For More Information
EPRI Report #1020389
www.epri.com
© 2010 Electric Power Research Institute, Inc. All rights reserved.
© 2010
Image
from Electric
NASA Power
VisibleResearch
Earth Institute, Inc. All rights reserved.
Wildcards
• High conversion efficiency,
low cost, solar photovoltaic
cells.
• Low-cost, high capacity,
short-discharge time energy
storage.
• Lower-cost modular nuclear
reactors.
© 2010 Electric Power Research Institute, Inc. All rights reserved.
Comparison of Current to Future U.S.
Electricity Generation Based on 2009 Prism
Renewables
Coal
Nuclear
Coal
Nuclear
Coal +
CCS
Gas
Gas
“TODAY”
© 2010 Electric Power Research Institute, Inc. All rights reserved.
“FUTURE”
Full Portfolio Scenario in 2050 – Transformation
MERGE FP 2050 GEN Mix
Biomass
EE/Demand Reduction
Biomass
Wind
Coal Coal
/ Gas++CCS
CCS
Hydro
Nuclear
Gas
© 2010 Electric Power Research Institute, Inc. All rights reserved.
U.S. Natural Gas Consumption based on 2009
MERGE Analysis
14
Non-Electric Sector
Electric Sector
Price
30
12
25
10
20
8
15
6
10
4
5
2
0
0
2000 2010 2020 2030 2040 2050
Limited Portfolio
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2000 2010 2020 2030 2040 2050
Full Portfolio
Natural Gas Wellhead Price ($/MCF)
Natural Gas Consumption (TCF)
35
Electrification under an 80% below policy
2.0
Full Portfolio
Electricity share of final energy demand
(indexed to 2000)
1.8
1.6
1.4
Limited Portfolio
1.2
1.0
0.8
0.6
0.4
0.2
0.0
2000
2010
© 2010 Electric Power Research Institute, Inc. All rights reserved.
2020
2030
2040
2050
Transition to Transformation
Technology
Transition – 2010-2020
Transformation – 2020+
Energy Efficiency/
Demand Response
• Significant increase needed
to achieve emissions
constraint
• EE/demand response
flattens load growth rate
Wind
• Significant increase in
generation share.
• Significant expansion of new
transmission lines
• Generation share >20%
• Significant regional transfer
of bulk wind power
Natural Gas
• Total gas generation increases
• Gas generation share
declines.
• Gas with CCS expands
Biomass
• Initial market entry in
generation mix
• Generation share remains
relatively constant
Nuclear
• Generation share increases
~10 GW
• Generation share increases
further
Coal
• Generation share declines
• CCS retrofit could apply
to a few units
• New coal with CCS becomes
the standard
• CCS Retrofit for ~20% of units
© 2010 Electric Power Research Institute, Inc. All rights reserved.