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Electricity Technology in a Carbon-Constrained Future
NARUC 2007 Summer Committee Meetings
New York City, New YorkJuly 16, 2007
Steven SpeckerPresident and CEO
2© 2007 Electric Power Research Institute, Inc. All rights reserved.
Presentation Objective
Answer the following two questions:
•What is the technical feasibility of slowing, stopping, and reversing the increase of CO2 emissions from the U.S. electric sector?
•What is the potential impact of the availability of advanced electricity technologies on the cost of electricity in a carbon-constrained future?
3© 2007 Electric Power Research Institute, Inc. All rights reserved.
U.S. Electricity Generation Forecast*
Nuclear Power 20.1%
Conventional Hydropower
6.7%
Non-Hydro Renewables
1.6%
Coal w/o CCS 51.3%
Other Fossil 3.0%
Natural Gas 17.4%
3826 TWh
Other Fossil1.7%
Natural Gas13.5%
Coal w/o CCS59.6%
Non-Hydro Renewables
3.0%
Conventional Hydropower
5.6%
Nuclear Power16.6%
5406 TWh
2005 2030
* Base case from EIA “Annual Energy Outlook 2007”
~40% Growth
4© 2007 Electric Power Research Institute, Inc. All rights reserved.
0
500
1000
1500
2000
2500
3000
3500
1990 1995 2000 2005 2010 2015 2020 2025 2030
U.S
. Ele
ctri
c S
ecto
rC
O2
Em
issi
on
s (m
illio
n m
etri
c to
ns)
• Base case from EIA “Annual Energy Outlook 2007”
– includes some efficiency, new renewables, new nuclear
– assumes no CO2 capture or storage due to high costs
Forecasted U.S. Electricity Sector CO2 Emissions
5© 2007 Electric Power Research Institute, Inc. All rights reserved.
0
500
1000
1500
2000
2500
3000
3500
1990 1995 2000 2005 2010 2015 2020 2025 2030
U.S
. Ele
ctri
c S
ecto
rC
O2 E
mis
sio
ns
(mill
ion
met
ric
ton
s)
EIA Base Case 2007
EPRI CO2 “Prism”
Technology EIA 2007 Reference Target
Efficiency Load Growth ~ +1.5%/yr Load Growth ~ +1.1%/yr
Renewables 30 GWe by 2030 70 GWe by 2030
Nuclear Generation 12.5 GWe by 2030 64 GWe by 2030
Advanced Coal GenerationNo 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 None10% of New Vehicle Sales by 2017;
+2%/yr Thereafter
DER < 0.1% of Base Load in 2030 5% of Base Load in 2030
Achieving all targets is very aggressive, but potentially feasible
6© 2007 Electric Power Research Institute, Inc. All rights reserved.
Presentation Objective
Answer the following two questions:
•What is the technical feasibility of slowing, stopping, and reversing the increase of CO2 emissions from the U.S. electric sector?
•What is the potential impact of the availability of advanced electricity technologies on the cost of electricity in a carbon-constrained future?
7© 2007 Electric Power Research Institute, Inc. All rights reserved.
Economic Model
EPRI Economic Analysis Model (MERGE)
• Designed to examine economy-wide impacts of climate policy
• Each country or group of countries maximizes its own welfare
• Prices of each GHG determined internally within model
• Top down model of economic growth
• Technological detail in energy sector
One of three models used by U.S. Climate Change Science Program and in many other international and domestic studies.
8© 2007 Electric Power Research Institute, Inc. All rights reserved.
0
500
1000
1500
2000
2500
3000
3500
1990 1995 2000 2005 2010 2015 2020 2025 2030
U.S
. Ele
ctri
c S
ecto
rC
O2 E
mis
sio
ns
(mill
ion
met
ric
ton
s)
Prism electric sector CO2 emission profile
Assumed Economy-wide CO2 Constraint
Prism profile closely approximated by an economy-wide CO2 emission constraint which is flat from 2010 to 2020
followed by a reduction of 3%/year
9© 2007 Electric Power Research Institute, Inc. All rights reserved.
Technology Cases
Full Portfolio Case
• Assumes all technologies from the Prism technology feasibility analysis are available to be deployed by the target dates
Limited Portfolio Case
• Assumes that Coal w/CCS and Nuclear ALWRs are not available for deployment
Modeled Two Technology Cases Using Economy-wide CO2 Constraint which results in the Prism
profile for the electric sector
10© 2007 Electric Power Research Institute, Inc. All rights reserved.
Economic Modeling Results (Prism CO2 Profile)
2000 2010 2020 2030 2040 2050
Tri
llio
n k
Wh
per
ye
ar
0
1
2
3
4
5
6
7
Solar
Wind
Hydro
Nuclear
Gas w/CCS
Gas
Oil
Coal w/CCS
Coal
Demand Reduction(price-induced)
0
1
2
3
4
5
6
7
2000 2010 2020 2030 2040 2050
Tri
llio
n k
Wh
per
ye
ar
Full Portfolio (with CCS and ALWR’s)
Limited Portfolio (no CCS or
ALWR’s)
11© 2007 Electric Power Research Institute, Inc. All rights reserved.
Economic Modeling Results
2000 2010 2020 2030 2040 2050
Tri
llio
n k
Wh
per
ye
ar
0
1
2
3
4
5
6
7
Solar
Wind
Hydro
Nuclear
Gas w/CCS
Gas
Oil
Coal w/CCS
Coal
Demand Reduction(price-induced)
0
1
2
3
4
5
6
7
2000 2010 2020 2030 2040 2050
Tri
llio
n k
Wh
per
ye
ar
Full Portfolio (with CCS and ALWR’s)
Limited Portfolio (no CCS or
ALWR’s)
$65 to $100/MWh*
*2050 wholesale generation cost 2007 $
$160 to $250/MWh*
(Prism CO2 Profile)
12© 2007 Electric Power Research Institute, Inc. All rights reserved.
Conclusions
• It is technically feasible to slow, stop, and eventually reduce the increase of CO2 emissions from the U.S. electric sector. But it requires:
– Commitment to aggressive public and private sector RD&D.
– Accelerated commercial deployment of advanced technologies.
• Meeting future CO2 constraints will increase the cost of electricity. The magnitude of the increase depends on:
– CO2 policy and it’s timing.
– The availability of advanced electricity technologies and the timing of their commercial deployment.
Technology is critical to managing the cost of CO2 policy
13
Global cost curve of GHG abatement opportunities beyond business as usual
2030
0 1 24 252 273 4 5 6 7 8 9
0
10
20
30
40
-10
-100
-110
-120
-130
-140
-150
-160
26
-30
-40
-50
-60
-70
-80
-90
19181716151413121110 20 21 22 23
-20
Cost of abatementEUR/tCO2e
Insulation improvements
Fuel efficient commercial vehicles
Lighting systems
Air Conditioning
Water heatingFuel efficient vehicles
Sugarcanebiofuel
Nuclear
Livestock/soils
Forestation
Industrialnon-CO2
CCS EOR;New coal
Industrial feedstock substitution
Wind;lowpen.
Forestation
Celluloseethanol CCS;
new coal
Soil
Avoided deforestation
America
Industrial motorsystems
Coal-to-gas shiftCCS;
coal retrofit
Waste
Industrial CCS
AbatementGtCO2e/year
AvoiddeforestationAsia
Stand-by losses
Co-firingbiomass
Smart transitSmall hydro
Industrial non-CO2
Airplane efficiency
Solar
• ~27 Gton of abatement below 40 EUR/ton (relative to 58 Gton under BAU)• ~7 Gton of negative and zero cost opportunities• Fragmentation of opportunities across sectors and geographies
CCS; early retirement
Minimizing Costs for Consumers
Under a Global Warming Pollution Cap
Dale S. Bryk
Natural Resources Defense Council
NARUC Summer Conference
July 16, 2007
Driving Investment in Least Cost Solutions
Price signal of cap or tax (does not overcome market barriers)
Allowance revenue
Essential complementary policies
– Energy efficiency procurement standards– Remove utility disincentives (revenue decoupling)– System benefit charge programs– Codes and standards
Allowance Distribution Objectives
Protect consumers
Reduce overall program costs
Advance program goals/ promote clean energy
Avoid windfall profits
Avoid perverse incentives
Transition assistance for workers
ElizabethA. Moler, Executive V.P. Exelon, Corp.