Search

Policymakers, planners, and other stakeholders are increasingly interested in net-zero emissions energy systems as countries and companies adopt net-zero goals. The power sector will play an important function in deeply decarbonized energy systems to lower emissions in other sectors through electrification and electricity-derived fuels. This article summarizes insights from the literature on the role and characteristics of the electric power sector as part of net-zero emissions energy systems. The power sector generally has very low or negative emissions at the point where economy-wide net-zero emissions is reached, highlighting the importance of electricity decarbonization and the value of carbon removal in limiting costs of net-zero targets. End-use electrification can alter load shapes and impact electric sector planning and operations, but the scale of these changes in net-zero systems is uncertain. Variable renewables, firm low-carbon resources, energy storage technologies, transmission/trade, and more active demand-side management are expected to have larger roles than today, though the extent of deployment depends on uncertainties about future technologies, markets, and policies.

The emergence of variable renewable energy and battery storage technologies have fundamentally transformed the electric power sector and generated demand for analysis to understand their roles in future energy systems. Although unique characteristics of these resources are well-recognized and require more sophisticated methodologies to capture effectively, guidance is limited on best practices and research gaps. This paper selectively reviews recent literature and draws upon our collective modeling experience to offer recommendations to analysts and consumers of model outputs on approaches for modeling variable renewable energy and storage in long-term electric sector models. We focus on regional- and national-scale models with technological, temporal, and spatial detail given their prevalence in planning and policy analysis, though insights are applicable in other settings. The review highlights how the research frontier has advanced in representing renewables and energy storage over the past decade; however, given the many considerations involved with appropriately capturing salient economic and operational characteristics of renewables, there is a gap between commonly used models and state-of-the-art methods. Model simplifications can materially impact policy analysis associated with power sector decarbonization and high renewables deployment, and improving model representations of variable renewables can enhance insights for policymakers and other stakeholders. This review can point the way for improved methods for established models and designs for emerging ones.

Power sector decarbonization is an important pillar of climate mitigation efforts, but perspectives differ about the relative competitiveness of generation technologies and how limited portfolio approaches (e.g., where non-renewable generation options are prohibited) could alter the costs and likelihoods of reaching emissions reduction goals. The existing literature on impacts of technological availability and cost on electric sector planning typically use models that do not have sufficient technological, spatial, and temporal detail to adequately resolve the economic competitiveness of variable renewable energy vis-a-vis dispatchable generators. Using a state-of-the-art energy-economic model, this work examines impacts of technological availability and advanced generation technologies on U.S. electricity market outcomes across a range of regional, market, and policy contexts. We show that decarbonization costs are 11%–76% higher as technological options are removed from consideration (incremental compliance costs for a 95% CO2 reduction below 2005 levels are roughly twice as high when new nuclear, carbon-capture-equipped units, and transmission are not allowed). However, the economic and technical implications of limited portfolios depend on the market and policy contexts (e.g., costs are higher with stringent targets, more extensive end-use electrification, and lower gas prices) and the costs and capabilities of the remaining options. The analysis demonstrates how lower temporal and spatial resolution models likely understate the value of technology by omitting key economic and technical features of high variable renewable pathways. Additionally, the analysis quantifies how technological change can lower costs of emissions reductions by 7%–73% and how low-cost battery storage can provide a hedge against higher costs when technological portfolios are limited.

The economics of climate change involves a vast array of uncertainties, complicating both the analysis and development of climate policy. This study presents the results of the first comprehensive study of uncertainty in climate change using multiple integrated assessment models. The study looks at model and parametric uncertainties for population, total factor productivity, and climate sensitivity. It estimates the pdfs of key output variables, including CO2 concentrations, temperature, damages, and the social cost of carbon (SCC). One key finding is that parametric uncertainty is more important than uncertainty in model structure. Our resulting pdfs also provide insights on tail events.

In 2010, Asia accounted for 60% of global population, 39% of Gross World Product, 44% of global energy consumption and nearly half of the world's energy system CO2 emissions. Thus, Asia is an important region to consider in any discussion of climate change or climate change mitigation. This paper explores the role of Asia in mitigating climate change, by comparing the results of 23 energy-economy and integrated assessment models. We focus our analysis on seven key areas: base year data, future energy use and emissions absent climate policy, the effect of urban and rural development on future energy us and emissions, the role of technology in emissions mitigation, regional emissions mitigation, and national climate policies.

The analysis presented here follows the design specified by the Energy Modeling Forum (EMF) Transition Scenarios study on achieving climate stabilization goals with delayed participation by developing countries. We use the MERGE model to evaluate the core EMF scenarios for both the international and the US-specific studies. Our results indicate that a radiative forcing target equivalent to 450 ppmv CO2-e cannot be met even allowing for full participation and overshoot during the entire 21st century. With delayed participation of developing countries, a target of 550 ppmv CO2-e is only attainable with pessimistic assumptions about economic growth, and even then only at very high cost. A target of 650 ppmv CO2-e can be met with delayed participation for a more affordable cost. We highlight sensitivities to the core scenarios in two key dimensions: (i) the effect of the unfolding global financial crisis on the rate of economic growth and (ii) the willingness of initially non-participating countries to agree at the beginning of the next commitment period (i.e. 2012) to join the coalition at a pre-specified date in the future. We find that while the recession does not fundamentally change the crucial role of developing country involvement, advance agreement on their part to future targets could substantially reduce costs for all countries.

The economic costs of stabilizing greenhouse gas concentrations over the coming century depend critically on the development of new technologies in the energy sector. Our research and development (R&D) investment strategy is the control variable for technology availability. This paper proposes an analytic framework for determining optimal R&D investment allocation and presents some numerical results to demonstrate the implementation of the methodology. The value of technological advance in three targeted areas–fossil-based generation, renewables, and carbon capture and storage–is represented by the increase in expected welfare in the presence of an emissions policy constraint of initially uncertain stringency. R&D expenditure increases the probability of advance. Optimal investment is determined by its relationship with success probability, which is assumed to exhibit decreasing returns to scale, relative to the value of success. While the numerical results are speculative, the paper offers insights into the nature of an optimal technology strategy for addressing climate change.

Recent growth in carbon dioxide emissions from China’s energy sector has exceeded expectations. In a major US government study of future emissions released in 2007 (1), participating models appear to have substantially underestimated the near-term rate of increase in China’s emissions. We present a recalibration of one of those models to be consistent with both current observations and historical development patterns. The implications of the new specification for the feasibility of commonly discussed stabilization targets, particularly when considering incomplete global participation, are profound. Unless China’s emissions begin to depart soon from their (newly projected) business-as-usual path, stringent stabilization goals may be unattainable. The current round of global policy negotiations must engage China and other developing countries, not to the exclusion of emissions reductions in the developed world and possibly with the help of significant financial incentives, if such goals are to be achieved. It is in all nations’ interests to work cooperatively to limit our interference with the global climate.

This paper builds upon recent work by the US Climate Change Science Program (CCSP). Among its products, the CCSP developed new emission projections for the major man-made greenhouse gases, explored the effects of emission limits on the energy system, and calculated the costs of various stabilization constraints to the economy. This paper applies one of the models used for that analysis to explore the sensitivity of the results to three potentially critical factors: the stabilization level, the policy design, and the availability and costs of low- to zero-emitting technologies. The major determinant of costs is likely to be something over which we have little control - Mother Nature. The choice of stabilization level will reflect our understanding of the science of global climate change. We have little control over many of the key bio-geophysical processes which, to a major extent, will determine what constitutes dangerous anthropogenic interference with the climate system. We consider two limits on radiative forcing, corresponding to stabilizing CO2 concentrations at approximately 450 ppmv and 550 ppmv. These levels have been chosen because of the fundamentally different nature of the challenge posed by each. In the case of the lower concentration limit, emission reductions will be required virtually immediately and annual GDP losses to the US could approach 5%. With the higher concentration limit, the pressure for a sharp reduction in near-term emissions is not as great. This offers some potential to reduce GDP losses. Indeed, we find that depending upon the concentration limit, implementing market mechanisms which take advantage of where and when flexibility can markedly reduce GDP losses, perhaps by as much as an order of magnitude. However, for a variety of reasons, our ability to realize such savings may be compromised. One possible impediment relates to the proximity to the target. If the limit is imminent, flexibility will be greatly reduced. The nature of the coalition and our willingness to permit borrowing emission rights from the future will also affect the magnitude of the potential savings. As a result, the reduction in GDP losses from where and when flexibility may turn out to be only a small fraction of what has been previously estimated. Fortunately, the biggest opportunity for managing costs may come from something over which we do have considerable control. We find that investments in climate friendly technologies can reduce GDP losses to the US by a factor of two or more. At present, we have insufficient economically competitive substitutes for high carbon emitting technologies. The development of low- to zero-emitting alternatives will require both a sustained commitment on the part of the public sector upstream in the R&D chain and incentives for the private sector to bring the necessary technologies to the marketplace. Aside from helping to assure that environmental goals are met in an economically efficient manner, climate policy can also serve as an enabler of new technologies. By recognizing the acute shortage of low-cost substitutes, the long lead times required for development and deployment, and the market failures that impede technological progress, climate policy can play an important role in reducing the long-term costs of the transition.