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At least 73 records · Page 4

Valuing the Future Electric Grid: A Bid-Based Approach

Energy storage resources (ESRs) and other zero marginal cost (ZMC) resources have unique characteristics that are not fully captured in today’s electricity planning and operations modeling tools. Because the modeling assumptions used in these tools are simplified approximations of how operations and investment decisions occur in the real-world, accurately representing cost and operational characteristics are key for determining how these resources impact price formation. Questions such as—Where should we build new transmission? Will a small modular reactor earn enough revenue to participate in the future electric grid? Is retrofitting a coal plant with carbon capture technology economically feasible?—all require accurate electricity prices, which aren’t available from today’s electricity planning and operations modeling tools. As an example, production cost models (PCMs) are heavily utilized tools that determine the cost and reliability of the electric system. However, as PCMs were developed to help thermal generators manage their fuel inventories, production cost modeling is largely based on fuel prices. Because ESRs do not incur fuel costs, they are often modeled as ZMC resources. In reality, ESRs incur opportunity costs as well as technology-specific (degradation) costs that are non-trivial to calculate but are important for price formation. In this research, we identify options to incorporate more realistic opportunity and degradation costs in ESR bidding algorithms. Expanding available bidding assumptions allows energy system modelers to develop more accurate economic valuations for ESRs, leading to more accurate price formation from leading energy system modeling tools.

24 POWER TRANSMISSION AND DISTRIBUTION↗

Performance Evaluation of Intelligent Solar Control Software Through Hardware-in-the-Loop (CRADA Final Report)

Recent research has highlighted the potential for solar to act as a zero-marginal-cost and zero-emission flexibility resource on the bulk power system when operated with advanced control systems. To increase the performance of these systems, leading technologies, including machine learning (ML) and hierarchical inverter set point allocation, have been developed by Latimer Controls, Inc. to estimate the headroom of large PV plants for grid operation and control; however, these technologies lack comprehensive validation under real-world application scenarios. Latimer Controls, Inc. received two voucher awards for research at a national laboratory from the Department of Energy American Made Solar Prize Round 6. The National Renewable Energy Laboratory (NREL) was selected to collaborate with Latimer staff to conduct a performance evaluation of Latimer PV control software. The NREL team will develop a hardware-in-the-loop (HIL) testbed to perform testing and validation of the Latimer PV control technology in a de-risked yet realistic testbed environment. Latimer and NREL worked together to analyze the test data, draw conclusions from the results, and disseminate the resulting scientific findings. In this CRADA work, we propose to test and validate the real-world application of the Latimer Control solution in an HIL environment. We evaluate the performance of different flexible solar technologies in responding to automatic generation control signals in a closed-loop fashion. In particular, a data-driven potential high limit (PHL) estimation is developed for large solar plants to accurately estimate their headroom so that they have fast and short-time regulation and control capability to participate in grid services and respond to grid signals in real time (e.g., AGC). This PHL estimation algorithm is embedded in a hardware power plant controller (PPC) and tested with an IEEE-39 bus system model developed in RTDS. To account for the varying cloud conditions and diverse inverter dispatches, we developed a 135-MW PV plant with detailed modeling of 27 individual PV modules and inverters using RTDS. The real-world communications used in such big plants, such as ModBus TCP/IP for inverter level and DNP3 for plant level, were developed to emulate the real-world applications in big PV plants. The ML-based PHL estimation method is tested under nine separate weather scenarios against the ‘reference-control’ solution, hereafter referred to as the baseline solution. The baseline method reserves a subset of inverters (reference group) to operate at their PHL at all times and dispatches only the remaining inverters (control group) at curtailed levels to fulfill the flexibility need. Despite being successfully piloted by NREL in California in 2017 and Chile in 2020, there exist two gaps in the state of the art to fully unlock the flexibility of PV plants: a. There is a trade-off between the PHL estimation accuracy and the flexibility range. b. There lacks granularity in the PHL estimation to capture the variation across inverters. The Latimer solution seeks to address these gaps by applying machine learning methods to improve PHL estimation accuracy while accounting for variability at every inverter. Performance metrics were taken from the 2023 Georgia Power CARES utility-scale RFP. The results demonstrate that the ML-based approach outperforms the traditional baseline method in PHL estimation accuracy for 7 of 9 scenarios. The average PHL error across the nine scenarios was 7.40% for the ML-based method, 2.06% less than the 9.46% PHL error average across scenarios that was exhibited by the baseline method. Additionally, the PHL error was below 5% for at least 95% of the testing interval for 3 of 9 tested intervals with the ML approach, whereas it did not achieve this metric for any of the baseline tests. Overall, simulation results indicate the superior performance of an ML-based approach compared to the conventional baseline reference-control approach, showcasing its potential to support grid stability and operational efficiency. This laboratory HIL testing using real PPC, representative power system simulation models in real-time with detailed PV plant and inverter models, and real-world communication protocols gives us confidence that this machine learning based PHL estimation algorithm works well in the hardware PPC and therefore de-risks future field commissioning. The end goal of this project is to advance grid technology to address the grid operation challenges brought by solar plant’s variability and uncertainties in power generation.

14 SOLAR ENERGY↗

A CHIL Validation of Machine Learning-Assisted Methods for Real-Time Controls of Solar PV for Grid Services

Recent research has highlighted the potential for solar to act as a zero-marginal-cost and zero-emission flexibility resource on the bulk power system when operated with advanced control systems. To increase the performance of these systems, leading technologies, including machine learning (ML) and hierarchical inverter set point allocation, have been proposed; however, these technologies lack comprehensive validation under real-world application scenarios. This paper addresses this gap by designing and developing a controller-hardware-in-the-loop framework to evaluate the performance of different flexible solar technologies in responding to automatic generation control signals in a closed-loop fashion. Simulation results indicate the superior performance of an ML-based approach compared to the conventional reference-control grouping-based approach, showcasing its potential to support grid stability and operational efficiency.

14 SOLAR ENERGY↗

Consumer Preferences and Willingness to Pay for Potting Mix with Biochar

Biochar is a co-product of advanced biofuels production from feedstocks including food, agricultural, wood wastes, or dedicated energy crops. Markets for soil amendments using biochar are emerging, but little is known about consumer preferences and willingness to pay (WTP) for these products or the depth of the products’ market potential for this product. This research provides WTP estimates for potting mix amended with 25% biochar, conditioned on consumer demographics and attitudes about product information labeling. Data were collected with an online survey of 577 Tennessee home gardeners. WTP was elicited through a referendum contingent valuation. Consumer WTP for an 8.81 L bag of 25% biochar potting mix is $8.52; a premium of $3.53 over conventional potting mix. Demographics and attitudes toward biofuels and the environment influence WTP. Biochar amounts demanded are projected for the study area’s potential market. Optimal prices, profits, and market shares are estimated across different marginal costs of producing biochar potting mix.

09 BIOMASS FUELS↗

Solar PV Curtailment in Changing Grid and Technological Contexts: Preprint

Solar photovoltaic (PV) systems generate electricity with no marginal costs or emissions. As a result, PV output is almost always prioritized over other fuel sources and delivered to the electric grid. At increasing levels of PV penetration situations arise where PV is curtailed, either because of local supply/demand imbalances or to maintain system flexibility. In 2018, we estimate that about 6.5 million MWh of PV output was curtailed in four key countries: Chile, China, Germany, and the United States. We find that PV curtailment peaks in the spring and fall, when PV output is relatively high but electricity demand is relatively low. Similar to the case of wind, some PV curtailment is attributable to limited transmission capacity connecting sparsely populated solar-heavy regions to load centers.Grid policies generally seek to minimize curtailment because it is viewed as an economic and environmental loss. However, we argue that changing grid and technological contexts warrant new thinking on PV curtailment. In the grid context, as grids integrate more PV and other renewable energy generation, seeking an optimal level of accepted curtailment becomes more efficient than preventing it. In the technological context, emerging technologies such as advanced inverters and low-cost battery storage are making PV systems more flexible. With flexible PV, grid operators can use withheld PV output to provide various non-generation grid services. This withheld PV output is a form of curtailment under prevailing definitions of the term. Hence, policies that aim to minimize curtailment may undercut the ability of grid operators to fully use the emerging capabilities of flexible PV systems. We argue that the changing grid and technological contexts require a re-examination of the curtailment paradigm. We argue that PV output that is withheld to provide grid services is fundamentally different from output that goes unused in response to system constraints. As a result, we propose a more exclusive definition of curtailment as unused PV output rather than the more expansive conventional definition as any reduction in system output from its technical potential. The terminological distinction is more than a question of semantics. Facilitating grid services by withholding PV output may increase the potential value of flexible PV systems to the grid. This shift in thinking may allow grid operators and policymakers to think in terms of PV curtailment management rather than minimization. Effective curtailment management may include policies that increase PV system dispatchability, alternative PV compensation schemes that decouple generator revenue from system output, and policies to increase grid flexibility.

Chile↗

Scaling Building Energy Audits through Machine Learning Methods on Novel Drone Image Data

Building energy audits are time-consuming and labor-intensive. This paper describes a new method using machine learning (ML) techniques on novel data sources (drone images) to improve the identification of building characteristics and retrofit opportunities, and thereby reduce the effort for audits. The new ML method includes: (1) Building footprint extraction using line extraction, polygonization, and polygon-merging, (2) Building envelope extraction using PIX4d modeling software to reconstruct a building 3D model, (3) Visualization tool for viewing images from the 3D model, (4) Window-to-wall ratio (WWR) using state-of-art deep neural network semantic segmentation, (5) Envelope thermal anomaly detection using an unsupervised machine learning clustering algorithm, and (6) Rooftop energy equipment detection based on an object detection algorithm. The testing of this method involved a comparison of additional ML-generated information overlaid on current ‘state-of-practice’ audit and remote assessment baselines using evaluation metrics: labor time and associated cost, marginal benefits of using ML-generated information in workflows for audits and remote assessments, integration potential with existing processes and tools, and replicability/scalability of the method. In two test buildings in California that had comprehensive drawings and meter data available, the ML method effectively generated a building footprint, envelope, rooftop equipment, WWR, and locations of envelope thermal anomalies. Projected target segments of the ML method are sites with minimal drawings and energy data, and underserved sectors such as multistoried housing, disadvantaged communities, and schools for which the ML method can enable identification of building asset characteristics and prioritization of envelope retrofits and decentralized energy equipment retrofits.

Singh, Reshma↗

Decentralized Voltage Control with Peer-to-peer Energy Trading in a Distribution Network

Utilizing distributed renewable and energy storage resources via peer-to-peer (P2P) energy trading has long been touted as a solution to improve energy system’s resilience and sustainability. Consumers and prosumers (those who have energy generation resources), however, do not have expertise to engage in repeated P2P trading, and the zero-marginal costs of renewables present challenges in determining fair market prices. To address these issues, we propose a multi-agent reinforcement learning (MARL) framework to help automate consumers’ bidding and management of their solar PV and energy storage resources, under a specific P2P clearing mechanism that utilizes the so-called supply-demand ratio. In addition, we show how the MARL framework can integrate physical network constraints to realize decentralized voltage control, hence ensuring physical feasibility of the P2P energy trading and paving ways for real-world implementations.

Feng, Chen↗

Real-Time Regional PV Spinning Reserve Estimator with AGC Look-Ahead Windows: Preprint

Curtailed PV generation is a zero-marginal cost spinning reserve that can be used for a number of active power control services. However, unlike the traditional spinning reserve providers, i.e., fossil-fueled generators, who have well-defined operating characteristics, e.g., available headroom or potential high limit (PHL), PV plants have by nature variable and uncertain operating characteristics. To ensure the effective coordination between PV plants and the system operator during an active power control event, accurate forecasts of the PV PHL are essential. A novel reference-control grouping based scaling method has been proposed by NREL to estimate the PV PHL in real-time. This work further enhances the methodology by: 1) improving the model accuracy through machine learning; 2) considering look-ahead windows introduced by the computation and communication latencies; 3) applying the method to regional spinning reserve estimation. A significant performance improvement, over 1.6% of estimation error reduction, has been observed based on real-world data collected by CAISO and PV plant operators.

potential high limit↗

Adaptation of Temperature Dependent Thermal Neutron Libraries for Fast On-The-Fly Monte Carlo Sampling at Arbitrary Temperatures

Thermal neutron scattering data is necessary for reactor simulations of thermal reactors, but the data storage required can be unwieldy. This is exacerbated when simulations require a large temperature range, as is the case for accident scenarios and reactor start-up. Previous work conducted at RPI has explored and demonstrated a proof of concept of On-The-Fly (OTF) data storage with light water and crystalline graphite based on ENDF/B-VII.1. This provides an updated data storage paradigm for incoherent inelastic cross-sections that allow the data to be used to generate necessary sampling Cumulative Density Functions (CDFs) for any desired temperature. The work presented in this paper extends the previous work by implementing the proof of concept based on ENDF/B-VIII.0, instead of ENDF/B-VII.1, and to include additional materials, such as beryllium and oxygen in beryllium oxide and the new reactor grades of porous graphite. Completion of this work allows a single thermal data file to represent any thermal scattering event for a given material OTF for the temperature of interest, which greatly reduces the data storage needed with only a marginal cost in the calculation of the CDFs OTF. This paper will review the basic methodologies in generating the OTF data, as well as present the updates and improvements made in the generation process. Application of the methodologies covered in this paper show a significant reduction in the storage requirements for inelastic incoherent scattering events. In which, the evaluated ENDF/B-VIII.0 thermal scattering library can be reduced from 563.1 MB to 10.9 MB for light water and 339.3 MB to 13.6 MB for Be in BeO.

21 SPECIFIC NUCLEAR REACTORS AND ASSOCIATED PLANTS↗

To What Extent Will Decarbonization Deepen the Conversation Between Industry and the Grid?

Decarbonization - the transition away from un-mitigated fossil fuel combustion throughout the economy - requires big changes from both power and process systems. On the power system side, those changes are expected to include large increases in variable generation, e.g., from wind and solar, which has near-zero marginal costs and at large shares can produce infrequent but consequential energy droughts. On the process systems side, industries are investigating their options for direct and indirect electrification, the latter exemplified by replacing fossil fuel inputs with zero-carbon, energy-carrying chemicals like hydrogen and ammonia produced via electrochemical processes. The economic features of these changes within the larger context of power and process systems suggest that their realization could be accompanied by a paradigm shift in how industrial facilities interact with the grid. For example, the dominant type of demand participation in power markets could change from today's focus on load reductions at peak times to a new focus on shifting electricity use, enabled in part by large-scale product storage, to take advantage of renewable energy that would otherwise be curtailed and to avoid consumption during high-price energy droughts. This talk will describe these and other possible design and operational approaches from grid and industrial economic perspectives, culminating in an enumeration of open problems that lie at the interface of today and tomorrow's power and process systems.

co-design↗

A CHIL Validation of Machine Learning-Assisted Methods for Real-Time Controls of Solar PV for Grid Services: Preprint

Recent research has highlighted the potential for solar to act as a zero-marginal-cost and zero-emission flexibility resource on the bulk power system when operated with advanced control systems. To increase the performance of these systems, leading technologies, including machine learning (ML) and hierarchical inverter set point allocation, have been proposed; however, these technologies lack comprehensive validation under real-world application scenarios. This paper addresses this gap by designing and developing a controller-hardware-in-the-loop framework to evaluate the performance of different flexible solar technologies in responding to automatic generation control signals in a closed-loop fashion. Simulation results indicate the superior performance of an ML-based approach compared to the conventional reference-control grouping-based approach, showcasing its potential to support grid stability and operational efficiency.

closed-loop validation↗

Organizational Influence on Supply Chain for Digital Energy Infrastructure: Business Models, and Policy Landscape

Significant investment is driving the essential modernization and digitization of U.S. energy infrastructure, but the United States faces a key challenge in this grid transformation: our renewable and clean energy supply chains have limited capacity to source necessary digital assets through U.S. or allied sources. Batteries and their associated power electronic interfaces are key components to delivering clean and more resilient energy delivery, providing much-needed fast ramping, emergency discharge, generation, and operations support to the electric grid. These services have grown to be invaluable over the past 10 years and will soon be an irreplaceable component of energy delivery. While there have been significant strides to move supply chains for raw and critical materials to U.S. and allied nations, the control and power electronic industry has lagged, in part because of lower cost margins. For example, the United States now has growing capacity to manufacture solar photovoltaic (PV) panels, but 90% of the inverters—which are essential to the conversion of DC to AC for grid connection and controls—are made in or source parts from the People’s Republic of China (PRC). While a global supply chain is beneficial for many economic and supply diversification reasons, presence of foreign entities of concern (FEOC) in a dominant role in this supply chain brings additional concerns for national security of infrastructure. The BESS relationship and new clean energy have features that warrant discussions and additional focus on impact for technology security, given their critical role. This review considers the impact and solutions for complex business and policy landscapes in clean energy supply chain, and the benefit trade-offs, focusing on the Battery Energy Storage System case study, and its complex organizational relationships across both the US, Allied countries and Foreign Entities of Concern. While many examples in this paper are presented on PRC focused manufacture, this could apply to any potentially adversarial relationship

25 - ENERGY STORAGE↗

Evaluating GHG Mitigation Potential from ESPC Projects [Slides]

This report explores the impact of implemented ESPC projects on the projected greenhouse gas (GHG) emissions reductions in the U.S. buildings sector, and the associated projected annual cost savings and marginal abatement costs. It is important to investigate the role that energy retrofits can play in achieving GHG emission reduction targets given the use of ESPC by public agencies to reduce emissions from energy use in addition to the historical use of ESPC to to achieve cost/energy savings and ancillary benefits (e.g., addressing deferred maintenance, aging infrastructure, etc.). The analysis draws from LBNL’s eProject Builder (ePB) database, which contains approximately 3,000 energy retrofit projects implemented by energy service companies (ESCOs), mostly energy savings performance contract (ESPC) projects. This is the first report to model GHG emission reductions from ongoing ESPC projects in the U.S public sector based on ePB project data. It is intended for policymakers, federal, state and local government officials and other potential ESPC customers, the ESCO industry, researchers, and other energy policy professionals.

29 ENERGY PLANNING, POLICY, AND ECONOMY↗

Electricity Costs and Carbon Implications for CO 2 -to-Fuels in Selected Locations in 2030

With the growing interest in converting carbon dioxide (CO 2 ) to fuels and products to reduce overall greenhouse gas emissions and extend carbon from biogenic and other sources, the development of carbon capture and utilization (CO2U) technologies and industry is crucial. The Markets, Resources, and Environmental and Energy Justice of CO 2 -to-Fuels Technologies (short title: MarkeRs & EEJ) project supports this goal by assessing the resource and market potential and infrastructure requirements for mid-term (-2030) and long-term (-2050) deployment of CO2U technologies. The overall project analyzes CO2U economic and resource requirements as well as sustainability and environmental and energy justice (EEJ) metrics. This report focuses on short-term (-2030) aspects of the project. It identifies three CO2U locations in the Midwestern United States and quantifies the costs for potential electricity resources and marginal emissions for each site in the near term (e.g., 2030). We focus on four electricity purchase options, including retail rate, physical power purchase agreement (PPA), financial PPA, and real-time pricing (RTP), for each of the three sites and consider potential policies such as production tax credits (PTCs). We also assess time-dependent hourly marginal electricity costs and the marginal emission rates using modeled scenarios from Cambium (Gagnon et al. 2021).The results of the analysis are expected to inform other projects within the U.S. Department of Energy's CO 2 -to-Fuels Consortium, especially the Economics and Sustainability of CO 2 Utilization Technologies with Techno-Economic Analysis and Life Cycle Analysis (TEA/LCA) project, led by Michael Wang of Argonne National Laboratory and Ling Tao of the National Renewable Energy Laboratory. The project results are also expected to inform the investment and technology communities and policymakers at the U.S. Department of Energy, state, and regional levels and guide investment by government and industry in research and development portfolios.

09 BIOMASS FUELS↗

Cropland expansion in the United States produces marginal yields at high costs to wildlife

Recent expansion of croplands in the United States has caused widespread conversion of grasslands and other ecosystems with largely unknown consequences for agricultural production and the environment. Here we assess annual land use change 2008–16 and its impacts on crop yields and wildlife habitat. We find that croplands have expanded at a rate of over one million acres per year, and that 69.5% of new cropland areas produced yields below the national average, with a mean yield deficit of 6.5%. Observed conversion infringed upon high-quality habitat that, relative to unconverted land, had provided over three times higher milkweed stem densities in the Monarch butterfly Midwest summer breeding range and 37% more nesting opportunities per acre for waterfowl in the Prairie Pothole Region of the Northern Great Plains. Our findings demonstrate a pervasive pattern of encroachment into areas that are increasingly marginal for production, but highly significant for wildlife, and suggest that such tradeoffs may be further amplified by future cropland expansion.

54 ENVIRONMENTAL SCIENCES↗

Cost estimates of production scale semitransparent organic photovoltaic modules for building integrated photovoltaics

Building integrated photovoltaics (BIPVs) are attached to commercial and residential structures to enable solar energy harvesting. While conventional Si photovoltaics (PVs) are dominant in the current market, second and third generation thin film solar cells based on amorphous Si, CdTe, CIGS, perovskites or organic photovoltaics (OPVs) are often considered as an alternative for BIPV applications since they may offer reduced costs compared to Si PVs. Indeed, recent advances in performance suggest that lightweight, flexible and visibly transparent OPVs can potentially be integrated into windows or other applications to which Si PVs are less well suited. Here, we estimate the cost of high efficiency, semitransparent OPVs (ST-OPVs) based on solution processing in a roll-to-roll (R2R) manufacturing line. Assuming modules with 10% power conversion efficiency (PCE), a 70% geometric fill factor (GFF), and 95% inverter efficiency, we anticipate a %1.6 per Wp module manufacturing cost that includes the cost of the microinverter to condition the OPV dc output to be compatible with the ac line voltage of the building. The materials and inverter cost comprise ~90% of the total module cost. Hence, with simplified material synthesis and a lower inverter cost, including marginally improved PCE and GFF, we expect the cost can be as low as $0.47 per Wp. Here, while the module costs ~60% of the average (uninstalled) double-pane window, we expect the payback period can be as short as 2 to 6 years, suggesting that OPVs can be an economic and attractive candidate for BIPV applications.

14 SOLAR ENERGY↗

Fluor Solvent Evaluation and Testing New Scope: Techno-economic Assessment of EEMPA Solvent for CO 2 Separations from Natural Gas Combined Cycle Power Plant

In this project, a techno-economic analysis (TEA) and sensitivity studies were conducted to assess the PNNL’s leading water-lean CO 2 capture solvent, EEMPA, for capture CO 2 from a natural gas combined cycle (NGCC) power plant at different levels of capture rate. Process models for the NGCC power plant, integrated with EEMPA carbon capture processes, were developed in Aspen Plus V14 using the most up-to-date property package for EEMPA-H 2 O-CO 2 system. The TEA evaluated EEMPA carbon capture process at normal capture rates (90%, 95% and 97%) against Case B32B (Cansolv) described in NETL Rev4a baseline report, and at higher capture rates aimed at achieving zero or negative emissions from the power plant (400 ppmv, 200 ppmv, and 100 ppmv CO 2 in exhaust gas), compared to typical Direct Air Capture (DAC) technologies. A manuscript was drafted for peer-reviewed publication. The results suggested that the carbon capture cost reaches a minimum of $\$$53.7/tonne CO 2 at 90% capture rate. Compared to Cansolv, one of the industrial benchmarks, EEMPA demonstrates 2-4% cost savings at capture rates up to 95%, but minimal savings at higher capture rate. The water lean-solvent system proves economically attractive for achieving moderate negative emissions (about 200 ppmv CO 2 in exhaust gas, and equivalent to 50% CO 2 removal from air) for NGCC flue gas, with marginal capture costs comparable to direct air capture (DAC) technologies. A sensitivity analysis results reveal that its economic advantage, unaffected by EEMPA price due to low solvent loss and degradation rate. However, the marginal carbon capture cost exceeds $\$$1,000/tonne CO 2 when transitioning from moderate to extreme negative emissions (100 ppmv CO 2 in exhaust gas), suggesting that water-lean solvents may not be economically competitive with other DAC technologies for removing more than 75% CO 2 from air. In addition, initial connection was established with Technology Center Mongstad (TCM) for a potential pilot testing proposal. However, detailed modeling and proposal preparation was not conducted due to the delay of non-disclosure agreement.

20 FOSSIL-FUELED POWER PLANTS↗

Calibrating Constant Elasticity of Substitution Technologies to Bottom-up Cost Estimates

We propose a method for calibrating an industry-level technology to engineering (bottom-up) estimates with a particular focus on abatement opportunities. As a demonstration, substitution elasticities across inputs are adjusted in the nested cost function for the electricity sector to best fit a target marginal abatement cost (MAC) curve derived from engineering assessments of available technologies. Elasticities are optimized over an entire relevant range of the MAC, whereas current techniques use local point estimates under little or no abatement. In the context of fitting to a given MAC we evaluate alternative nesting structures and find that, while complexity in nesting improves the fit, even relatively simple nesting structures can reasonably approximate the target MAC. In our example, focused on the electricity sector, we find standard elasticities adopted in top-down models moderately overstate abatement costs relative to the engineering targets. In our preferred specification the most important adjustment is to escalate the substitution elasticity between energy and value-added inputs. This is consistent with an argument that the current set of point estimates fail to properly account for new capital-based technologies. These conclusions, however, are sensitive to our assumption about output-intensity abatement and consumer price responsiveness, both of which are not delineated in engineering estimates.

abatement cost↗