2021 Standard Scenarios Report: A U.S. Electric Sector Outlook
This presentation provides a summary of the 2021 Standard Scenarios report. It was presented in a public webinar on December 15, 2021.
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This presentation provides a summary of the 2021 Standard Scenarios report. It was presented in a public webinar on December 15, 2021.
“Sector coupling” is a concept that addresses potential designs for the future power industry. Traditionally, the energy sectors, i.e., electricity supply, transport, and industry, have functioned largely independently from one another. Thus, the concept of sector coupling means that the electricity sector would become the central pillar of the energy system, supplying the other sectors – transportation and industry – with energy in various ways, a scheme described by the term “Power-to-X”. This report delves into the ambitious goal set by the United States to achieve net-zero emissions by 2050, with a pivotal milestone of making half of all passenger vehicles sold in America zero-emission by 2030. Central to achieving this objective is the electrification of the transportation sector, resulting in complex interactions between this sector and the electric industry. As electric vehicles become more prevalent, a shift in the dependency on electricity for vehicle charging emerges, alongside a reduction in the electricity demand associated with maintaining the fossil fuel supply chain. Both the electricity and fossil fuel have been identified as critical infrastructure sectors, the transportation sector's historical reliance on fossil fuels, and the mature supply chain supporting them are explored. This study emphasizes the existing sectoral coupling between the electric energy and transportation sectors, extending beyond vehicle charging to essential operations at refineries, pipeline facilities, storage, and fuel extraction. Recognizing the critical dependency of fossil fuel supply chain operations on the electric sector, this research underscores the need for a comprehensive view of the evolving dynamics between the transportation and electric sectors. This study has been split into two segments, Part-I provides an overview of the existing fossil fuel supply chain architecture and the electrical sector. We provide an in-depth analysis of the grid-transportation sectoral coupling, its interactions, the vulnerabilities and essential take-aways that would help us to address them and apply towards an electrified transportation sector in the future. We engaged with stakeholders to understand their expectations in enabling an electrified transportation. We accumulate the understandings from the current fossil fuel-based system in developing a risk matrix, by identifying all the threats and vulnerabilities and how would they apply to both the current and future transportation systems in Part-II of this report.
This effort employs and adapts an existing, rigorous multiscale electricity modeling platform at the National Renewable Energy Laboratory (NREL) to evaluate carbon capture and sequestration (CCS) and negative emissions technologies (NET) from the ARPA-E FLECCS program. NREL's modeling platform includes the Regional Energy Deployment System (ReEDS) electric sector capacity expansion model, which projects future electricity generation mixes at sub-state-level resolution that are downscaled to the unit-level to enable hourly, zonal or nodal electricity production cost modeling in the PLEXOS model. The resulting hourly price data from PLEXOS is provided to technology developers under the ARPA-E FLECCS program to enable technology-specific economic analysis. The ReEDS-PLEXOS modeling suite is well-established for examining electric sector futures with high renewable energy penetrations, energy storage, electrification, and distributed generation. The key advancement proposed herein utilizes collaboration with CCS experts at the University of Wyoming and the FLECCS teams to create innovative methods for representing CCS and NET in the ReEDS and PLEXOS models. Expanded technology options, new operational parameterizations, and detailed data defining CO2 capture, transportation, and storage systems are being integrated into these models to allow an unprecedented combination of scope and resolution for exploring the future of CCS and NET. The resulting capabilities will take advantage of high-performance computing resources to permit wide-ranging scenario analysis to assess CCS and NET deployment under alternative CO2 prices, fossil fuel prices, electricity demand growth, and other electric sector characteristics. Final outcomes will include publicly available hourly grid operation and price data for any U.S. region of interest along with open-access capacity expansion tools for evaluating CCS/NET systems. These products will help an emerging CCS/NET industry in the United States by providing economics-driven guidance to technology developers while informing policy and investment decisions in the public and private sectors.
This study proposes a subsystem methodology for measuring labor productivity in the U.S. industrial and electric power sectors by leveraging public data available between 2014 and 2023. Building on Pasinetti’s framework and subsequent developments, the approach employs Vertically Integrated Sectors (VIS) to account for both direct and indirect productivity effects. The novelty of this work is twofold. First, it enables the estimation of productivity trends over time, providing a robust foundation for empirical analysis. Second, it applies the methodology to a case study of the electric generation sector, highlighting its practical relevance. Using data from the Bureau of Economic Analysis, the Bureau of Labor Statistics, and the Impact Analysis for Planning (IMPLAN) tool, the study reveals significant discrepancies between conventional productivity measures and those derived from the VIS approach. Furthermore, the proposed method aligns with the principles of Integrated Energy Systems by capturing the interrelations among generation, distribution, storage, and consumption. This alignment underscores its utility and applications for energy-related policy and planning. Overall, the findings contribute to more precise labor productivity assessments, supporting informed decision-making and future research. Additionally, the method highlights the importance of considering the whole supply chain, providing interrelated metrics for labor productivity which includes both, direct and indirect effects on the final labor productivity metric. By incorporating intersectoral dependencies, this method offers a more comprehensive and accurate measure of labor productivity compared to traditional metrics.
Meeting growing energy demands while eliminating emissions, maintaining affordability, and ensuring energy justice is one of the most significant grand challenges of our time. Governments and private industry around the world have established aggressive goals to achieve net-zero emissions by mid-century. In the U.S., this equates to a net-zero electricity sector by 2035 and across all energy use sectors—including electricity, industry, and transportation—by 2050. The key question then becomes: Can we get there from here? Meeting these aggressive goals demands immediate action, and they require us to think more holistically about our clean energy options. Currently, almost 85% of global energy demands are met by unabated fossil fuels. That means we have a lot of work to do, and we need to consider all of the non-emitting generation options available in each region—including fossil with carbon capture, renewables, and nuclear. And we need to reach our goal while establishing energy justice, which refers to the goal of achieving equity in social and economic participation in the energy system, while remediating past social, economic, and health burdens on communities that have been brought about by our energy system. This presentation will describe U.S. and global efforts focused on novel energy system solutions that strive to maximize use of all clean energy generation options to meet our energy demands, while ensuring sustainability, customer affordability, and a just energy system.
Amidst ongoing discussions about hydropower removals, retirements, and reduced availability due to drought and other environmental considerations, it is important to understand the long-term effects of reduced hydropower resources on the U.S. electric grid. This analysis uses the Regional Energy Deployment System (ReEDS™) grid planning model to compare several representative scenarios of retiring hydropower and pumped storage hydropower (PSH) capacity over time and explore the overall implications on the U.S. grid from present day through 2050. Reduced hydropower capacity and generation is replaced by a mix of both fossil and non-fossil resources, including natural gas, wind, solar, and battery technologies. Additional natural gas usage leads to an increase in cumulative national electric sector carbon dioxide and criteria pollutant operating emissions of less than 1% in many scenarios but up to 4-5.3% in some cases. Total electric sector costs also increase by <1% in many scenarios but up to 3.6% in the most extreme scenarios where nearly all the hydropower and PSH fleet retires, equating to $\$$340 billion in undiscounted costs. National results indicate that absent additional interventions, retiring hydropower and PSH capacity could increase electric sector emissions and direct capital and operating costs. However, more focused analysis is required to evaluate specific asset-level, local, and regional implications, and a broader scope is necessary to weigh these electric sector impacts alongside economic, ecological, water management, and other cross-sectoral effects that could be either negative or positive.
In 2015 the Paris Agreement established the goals of limiting global average warming to well below 2°C and pursuing efforts to limit warming to below 1.5°C. A large and growing number of scenarios have been developed by the climate research community that explore global energy and emissions pathways that would achieve those goals. We draw on the most recent database of such scenarios to update a previous analysis of Xcel Energy’s emissions reduction goals in light of evolving climate science. We assess the outlook for the role of the US electricity sector in current economy-wide and global emissions pathways and compare it to Xcel Energy’s near-term resource plans to 2030. We find that global scenarios that achieve the 1.5°C goal span a range of US/North America electricity sector emissions reductions by 2030 of about 65-85%. Xcel Energy’s emissions reductions to date have exceeded those of the US electricity sector as a whole, and its projected trajectory to 2030 under current approved resource plans falls within this range. Scenarios achieving the 2°C goal have a wider range of reductions (about 40-85%). In scenarios achieving either goal, electricity sector emissions fall faster than economy-wide emissions, a robust feature of mitigation scenarios, which typically rely on low carbon electricity to achieve climate targets.
Hydropower and pumped storage hydropower (PSH) have a complex and uncertain future in the U.S. electricity system. On one hand, existing assets have the potential for an expanded role in integrating variable renewable energy while new deployment, particularly of PSH, can help meet growing needs for grid flexibility and improved reliability. On the other hand, challenging environmental and cost considerations could limit the extent of new investments in hydropower and PSH capacity and flexibility. This technical presentation demonstrates the use of a high-fidelity capacity expansion model of the U.S. electric grid (the National Renewable Energy Laboratory's Regional Energy Deployment System) to understand the impacts of alternative futures for the hydropower and PSH fleet, including scenarios of both growth and decline. Growth scenarios include new PSH deployment or improved hydropower flexibility, while scenarios of decline reduce the capacity or energy production potential of hydropower and PSH. Economic, environmental, and performance outcomes of the grid are compared across these scenarios to reveal the potential contributions of hydropower and PSH in the U.S. electric sector over the next several decades, focusing on changes to the grid technology mix, electric sector costs, electricity prices, and air emissions. This broad scenario approach demonstrates how flexible hydropower and PSH can help reduce air emissions and cost by complementing variable renewables, but the opposite can occur with reduced hydropower availability, particularly in the next decade. It is important to consider a wide range of scenarios and metrics to gain a national and regional understanding of hydropower's future in the United States.
Abstract Electrifying the transportation sector is crucial for reducing greenhouse gas emissions and offers numerous benefits including increased energy efficiency, lower total ownership costs, enhanced national energy security, and improved air quality. Despite the availability of necessary technologies, fully integrating the transportation and electricity sectors presents challenges in understanding all benefits and risks. Previous studies have not highlighted the role of coupling between these sectors. To better understand this coupling, this work reviews the structure of the current fossil-fuel-based transportation sector (including its dependence on the electricity sector) and case studies of its vulnerabilities to key risks. By adopting a systemic perspective, we uncover the indispensable interplay between the transportation and electricity sectors, shedding light on previously neglected dynamics. Leveraging the principles of grid architecture (GA), we introduce a hierarchical approach to assess vulnerabilities within the prevailing fuel-based transportation system and elucidate pathways for enhancement through electrification.
To help meet its near-term NDC goals and long-term net-zero 2070 target, the Government of India has planned to establish a Carbon Credit Trading Scheme (CCTS), i.e. a domestic emission trading scheme (ETS). An ETS is an inherently cost-effective policy instrument for emission reduction, providing the greatest flexibility to reduce emissions from within and across sectors. An effective ETS requires design features that consider country-specific challenges and reflect its role within the larger policy package to achieve long-term emission reduction. Within the Indian context and in this study we therefore investigate—(i) what might be the role of the ETS in achieving India’s long-term mitigation targets? (ii) How might the various sectors interact under an emissions cap? (iii) How might the ETS interact with existing energy and climate policies? We do this analysis by running four main scenarios using the integrated assessment model GCAM (v6.0), adapted to India-specific assumptions and expectations. These scenarios are—(i) NZ (net-zero), (ii) NZ + ETS, (iii) NZ + CC (command and control), and (iv) NZ + RPO (renewables purchase obligations) + ETS. The NZ scenario assumes India’s near-term and long-term climate commitments of net zero by 2070. Scenarios with ETS (ii) and (iv) apply an emissions cap on four sectors—electricity, iron and steel, cement, and fertilizer. The scenario with CC applies a homogenous emission cap on each of the chosen sectors but does not allow cross-sectoral trading. The last scenario includes renewables purchase obligations (RPOs along with an ETS. We show that under a specific ETS emissions cap: (i) the electricity sector emerges as the largest source of cost-effective greenhouse gas (GHG) reduction options; (ii) ETS with trading across sectors is around 24% more cost-effective than ETS with trading only within sectors, (iii) RPOs can be complementary to an ETS although the impact of RPOs on GHG reductions in the electricity sector would need to be considered when setting the level of the ETS cap (or emissions intensity targets) or the RPO targets to avoid low carbon prices, and (iv) the direction and volume of financial transfers across sectors depends on allocation targets set by the government. Based on these results we provide design recommendations for India’s ETS.
This effort employs and adapts a rigorous multiscale electricity modeling platform at the National Renewable Energy Laboratory (NREL) to evaluate carbon capture and sequestration (CCS) and negative emissions technologies (NET) from the ARPA-E FLECCS program. NREL's modeling platform includes the Regional Energy Deployment System (ReEDS) electric sector capacity expansion model, which projects future electricity generation mixes at sub-state-level resolution that are downscaled to the unit-level to enable hourly, zonal or nodal electricity production cost modeling in the PLEXOS model. The ReEDS-PLEXOS modeling suite is well-established for examining electric sector futures with high renewable energy penetrations, energy storage, electrification, and distributed generation. The key advancement proposed herein utilizes collaboration with CCS experts at the University of Wyoming (U.WY) and the FLECCS technology development teams to create innovative methods for representing CCS and NET in the ReEDS and PLEXOS models. Expanded technology options and new operational parameterizations are integrated into these models to allow an unprecedented combination of scope and resolution for exploring the future of CCS and NET. The resulting capabilities permit wide-ranging scenario analysis to assess CCS and NET deployment under alternative scenarios of CO2 prices and competitiveness of flexible CCS and NET technologies. We demonstrate sample deployment and operational outcomes to show how these models are being used to assess the future potential for FLECCS technologies and their impacts on the U.S. electricity system. These products will help an emerging CCS/NET industry in the United States by providing economics-driven guidance to technology developers while informing policy and investment decisions in the public and private sectors.
Innovation is essential for future power systems to be safe and secure, clean and sustainable, affordable and equitable, and reliable and resilient, according to a recent National Academies report. But state regulatory reforms are needed to encourage adoption of new technologies to support evolution of the nation’s power systems.1 Berkeley Lab's report, The Role of Innovation in the Electric Utility Sector, provides consumer, labor, utility, third-party provider, and clean technology consultant perspectives on this theme. To achieve state targets for clean energy and greenhouse gas emissions, some state regulatory utility commissions are exploring new approaches to spur innovation: -For utilities, regulatory and marketing flexibility, increased funding for demonstration projects, and performance-based ratemaking including multi-year rate plans -For third parties, ways to provide utility customers with innovative products and services directly Among the questions the report addresses: 1. How are consumer advocate views evolving with respect to innovative regulatory and ratemaking approaches? 2. How can utility decarbonization and grid modernization initiatives provide opportunities for local communities and workers to receive tangible benefits and facilitate community support for siting electricity infrastructure? 3. How are electric utilities partnering with technology companies to provide innovative energy management services and sustainable energy solutions for utility customers? 4. What regulatory innovations are public utility commissions exploring to enable third-party providers to participate in the transition to a modern electric system? 5. What regulatory changes are needed to enable innovative solutions from utilities and third parties at the necessary speed and scale to meet state decarbonization goals? The report is the 13th in the Future Electric Utility Regulation series, which taps leading thinkers to tackle complex regulatory issues for electricity. 1 National Academies of Sciences, Engineering, and Medicine. 2021. The Future of Electric Power in the United States. The National Academies Press.
The electricity sector represents the centerpiece of decarbonization pathways for the state. Decrease in the cost of renewable electricity generation, combined with ample solar energy, wind and other renewable resources, presents a realistic way to achieve electricity generation that is nearly free of CO 2 emissions by mid-century. Expansion of renewable electricity supply could allow replacement of many CO 2 -emitting technologies with ones that use electricity—in transportation, buildings, and possibly industry. Key elements of the path for California’s electricity sector are: restrain electricity demand through higher efficiency, rapidly expand renewable electricity generation, develop electricity storage to complement renewable electricity, manage flexible electricity loads for a low-carbon electricity system, electrify where appropriate to reduce CO 2 emissions, and maintain reliable and resilient electricity supply. This report provides an overview of a multitude of innovative technologies in each of the above areas that have the potential to help the state meet its decarbonization goals, while lowering costs and promoting greater reliability. The information presented provides a portrait of the landscape of technology innovation that can help policymakers, state agencies, and interested parties develop strategies to meet the state’s goals and to target efforts to support and nurture technology innovation.
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The U.S. electric sector is rapidly evolving, with widespread renewable energy deployment, building and transport electrification, and nuanced decarbonization policies. Climate change influences the supply and demand for electricity by altering water resources for cooling and hydropower, thermal plant efficiencies, and heating and cooling demand. This research combines global climate model data, asset-level water and streamflow modeling, and electric sector capacity expansion modeling to study climate-water-electricity interactions across myriad future climate and electricity scenarios that consider electrification and decarbonization using renewable, hydrogen, carbon capture, and nuclear technologies. Multi-model integration leads to insights into power-water sector interactions and their impacts on grid economics and environmental outcomes.
Abstract Direct air capture (DAC) is critical for achieving stringent climate targets, yet the environmental implications of its large-scale deployment have not been evaluated in this context. Performing a prospective life cycle assessment for two promising technologies in a series of climate change mitigation scenarios, we find that electricity sector decarbonization and DAC technology improvements are both indispensable to avoid environmental problem-shifting. Decarbonizing the electricity sector improves the sequestration efficiency, but also increases the terrestrial ecotoxicity and metal depletion levels per tonne of CO 2 sequestered via DAC. These increases can be reduced by improvements in DAC material and energy use efficiencies. DAC exhibits regional environmental impact variations, highlighting the importance of smart siting related to energy system planning and integration. DAC deployment aids the achievement of long-term climate targets, its environmental and climate performance however depend on sectoral mitigation actions, and thus should not suggest a relaxation of sectoral decarbonization targets.
he electric sector across North America is facing a transition. Both economics and policy decisions have pointed towards a broad retirement of fossil assets across markets. Owners are facing the problem of how to evolve the base of the electric sector from fossil asset to greener alternative. Coal-fired power plants built the modern electricity grid. Their rotating machinery are the beating heart of the grid, providing essential resiliency and reliability services. Power plant retirements are disruptive to plant workforces and cause outsized impacts on surrounding communities. The transition from thermal power plants that use rotating machinery to generate electricity (e.g., coal- and gas-fired plants) to variable, inverter-based generation (e.g., solar and wind) is affecting the reliability of the electric grid. Grid operators and national regulators have issued warnings about known and anticipated risk. In 2021, Malta Inc. was awarded a Department of Energy (DOE) grant to study how to integrate a Malta 100MW Pumped Heat Energy Storage (PHES) system with a retiring coal-fired power plant to meet emissions requirements, retain plant workforces, preserve communities, and maintain grid reliability. This presentation provides a summary of this study, focusing on how systems engineering approach was used to arrive at a proposed design concept that met multiple objectives and requirements. There will be three main parts for this presentation. The first part of the presentation will focus on how different systems engineering was applied for this work. In particular, the following areas: stakeholder engagement, site selection process, developing requirements and use cases for the integrated system, defining the system and its boundary, coming up with different system architecture/option, performing a techno-economic analysis to compare the different options and down selection of the preferred option, will be discusses. For these areas, discussion on the decisions on how much breadth and depth to go into each area will be provided. These discussions provide good insights into how to apply systems engineering. The second part of the presentation will provide a deeper dive into the two recommended integration options that repurpose coal-fired power plants with Malta PHES system. The comparison of the two options and general guidance of how to choose an option will be provided. This is particularly useful for utilities who are facing coal-plant retirements. The two options will be compared based on its performance (such as power output, efficiency), complexity, and cost. The social impact on local communities of the two options will also be discussed. The final part of the presentation will discuss the impact that this work has had, including Malta Inc. being invited to the White House to discuss progress and outcomes of this work with the Interagency Working Group on Coal and Power Plant Communities and Economic Revitalization. In summary, this presentation aims to provide a showcase of how sy
Existing tools for long-term electric sector planning struggle to represent hydropower's nuanced site-specific technical and operating characteristics, which depend on technical specifications as well as water management practices and regulations. As a result, long-term planning models and tools insufficiently characterize hydropower value and incentives, and they cannot fully represent the role hydropower can play in a future electricity system that could include a high penetration of variable wind and solar generation, battery storage, and other low-carbon technologies. This presentation demonstrates the culmination of a multi-year effort to enhance hydropower representations in electricity planning models at the National Renewable Energy Laboratory (NREL), as part of the U.S. Department of Energy (USDOE) HydroWIRES Initiative. New modeling techniques are demonstrated using the NREL Regional Energy Deployment System (ReEDS), an open-access electric sector capacity expansion model used extensively in a wide range of technology deployment and integration analysis, including the 2016 USDOE Hydropower Vision. ReEDS uses a least-cost optimization approach to understand investment and operation of electricity generation, storage, and transmission technologies under future scenarios of electricity technology innovation, demand, policy, and other sectoral drivers. ReEDS was modified to better represent value and opportunities for both pumped storage hydropower (PSH) and hydropower systems without pumping. We incorporated a new national closed-loop PSH resource and cost assessment to explore new PSH deployment opportunities and added plant-level data to better represent the existing PSH fleet. New upgrade pathways enable opportunities for enhanced hydropower flexibility by adding pumps, upgrading dispatchability, increasing capacity, or increasing energy availability. The model was also modified to better represent the value of long-duration energy storage beyond diurnal time scales, allowing both hydropower and PSH to better balance energy supply and demand variations in high-renewable systems. These new features are demonstrated under reference and high-renewable futures and a range of sensitivity scenarios to understand which hydropower and PSH deployment and upgrade opportunities are the most attractive. These scenarios indicate potential for new closed-loop PSH deployment and for hydropower flexibility improvements to have important impacts on long-term electricity system emissions and economic outcomes. Increasing flexibility of the existing hydropower fleet can reduce the need to invest in new flexible grid technologies and help achieve decarbonization goals. Systems with sufficient energy storage could also be valuable for balancing seasonal differences in renewable energy availability, particularly from solar energy. The methods developed for ReEDS and subsequent scenario results reveal important considerations for future hydropower and grid system planning, and all data and code is freely available in a public code repository for use throughout the hydropower industry.