EPRI and IEA Workshop
Challenges in Electricity Decarbonization: Optimising the Path to 2050
October 17, 2016
OECD Headquarters, 2 rue Andre Pascal, 75016 Paris, France
The Electric Power Research Institute and the International Energy Agency held the third workshop in their Challenges in Electricity Decarbonisation series on October 17, 2016, at the OECD Headquarters in Paris, France. This workshop, titled “Challenges in Optimising the Path to 2050”, also formed a part of the IEA’s Electricity Security Advisory Panel.
The Paris Climate Agreement at the 21st Conference of the Parties (COP21), called for nations to set near-term targets and to achieve net-zero emissions in the latter half of this century. The G8 goal of reducing respective GHG emissions by 80% by 2050 was also reaffirmed. According to most estimates, meeting this national emissions reduction target will require an even greater reduction in carbon emissions for the electricity sector.
Numerous authors have demonstrated a variety of technically feasible pathways to achieve these emission reductions, including the scenarios of the IEA’s World Energy Outlook and Energy Technology Perspectives publications. Some of these pathways rely heavily on nuclear, some rely nearly exclusively on renewable energy, and others make use of carbon capture and sequestration. Pathways involving all of these technologies have been found to be technically feasible − but there are technological and economic hurdles to each. All of them, however, require a significant transformation of existing infrastructure.
This transformation is already under way. The electricity sector is undergoing a period of rapid change in order to meet the 2025 and 2030 goals of COP21, other national goals and targets, and in response to consumer and technological pressures. In many cases the decisions involved in this transformation are expensive and not easy to reverse. Decisions to build a carbon-capture and sequestration facility, build or retire a nuclear power plant or replace fossil fuels with subsidised renewables can run into the billions of dollars, for example.
The cost of this transformation and the longevity of electricity infrastructure imply that efforts to meet the 2025 and 2030 objectives will have a substantial impact on broader efforts to decarbonise by 2050. Managing long term costs will require market signals that factor the economics of various pathways to 2050 decarbonisation into near- and mid- term targets.
This workshop explored the technological and economic challenges of different pathways to 2050 decarbonisation. In short, what combination of technologies can meet decarbonisation objectives at the least cost? In addressing this question, the workshop sought insights from regulators, system operators, industry and academia in various OECD/non-OECD countries facing similar issues regarding electrifying sector decarbonisation.
The workshop focused on the following areas:
- The Future Of Gas, Coal and Oil Challenges in Electricity Decarbonisation
- Nuclear Outlook
- High-Level Renewables Penetration and Associated Technologies
- Finding the Optimum Path
Sessions descriptions and speakers are listed below.
SESSION 1 - THE FUTURE OF GAS AND COAL-FIRED POWER GENERATION
A combination of technological change and policy developments are creating financial pressures and are transforming the fossil fleet in many parts of the globe. In the US, low natural gas prices and the Clean Air Act (including the Clean Power Plan) are hastening the retirement of coal and encouraging new gas builds as well as new renewables. For example, EPA regulations require that any new coal facility employ carbon capture and sequestration. In Europe, renewable incentives and nuclear retirements have created uncertainty for fossil generators. Gas and coal plants face increasing needs to provide power to replace retiring nuclear as well as to balance renewables—but in many cases there are limited economic incentives for maintaining the fleet.
This panel explored the financial picture facing the fossil fleet in the US and Europe, expected near- and long-term retirements and builds as well as the potential for CCS.
Moderator: Tom WILSON, Senior Technical Executive for Strategic Analysis, Electric Power Research Institute (EPRI)
- Scott A. WEAVER, Manager, Strategic Analysis, American Electric Power | Challenges for the US Fossil Fleet
- Graham WEALE, Honorary Professor of Energy Economics and Politics, Ruhr-University Bochum | Challenges for the EU Fossil Fleet
- Alberto PONTI, Strategy and Market Analysis Department, TERNA | Are We Making the Right Investment Decisions for 2050?
SESSION 2 - AGEING NUCLEAR CAPACITY AND ITS ROLE IN DECARBONISATION
Over the next 25 years almost 40% of installed capacity is expected to close down, half of all nuclear reactors will reach the end of, their technical lifetime and around 610 GW of coal capacity will be phased out for environmental reasons, according to the World Energy Outlook Investment Report 2014. The eventual retirement of this existing fleet — in particular in countries that choose not to replace ageing nuclear facilities or accelerate their retirement schedule — will create additional demand for new low-carbon installations. What are the challenges linked to decarbonisation in consideration of this ageing fleet? What broader impacts will this have for other generation sources, as well as their subsequent integration into the grid?
Moderator: Tomi MOTOI, Economics and Investment Office, International Energy Agency (IEA)
- Kathleen L. BARRÓN, Senior Vice-President Regulatory and Wholesale Market Policy, Exelon Corporations | US Perspectives and Experiences
- Marco COMETTO, Nuclear Energy Agency (NEA) | Nuclear Energy in Electricity Decarbonisation: Long-Term Operation of Existing Reactors
- Jean-Pol PONCELET, Director-General, Foratom | European Perspectives and Experiences
SESSION 3 - IMPLICATIONS OF HIGH PENETRATION OF RENEWABLES FOR DECARBONISATION
There has been significant debate recently about the level of penetration of renewables, with some authors arguing that 100% reliance on renewables is feasible. However, as more variable renewable energy sources are integrated into the electricity system, the return on investment will decline, making it increasingly challenging to recover the cost of new investment. Technological advancements, such as demand response and storage, has the potential to solve this challenge—but at uncertain cost. This panel explored high-level renewables penetration and associated economic and technological hurdles.
Moderator: David HUNTER, Senior Government Representative, Electric Power Research Institute (EPRI)
- Matthew NELSON, Chief of Strategic Initiatives, Office of Energy Efficiency and Renewable Energy, US Department of Energy | Renewable Scenarios for 2050 Decarbonisation
- Simon MÜLLER, Head of the Systems Integration of Renewables Unit, International Energy Agency (IEA) | Decarbonisation at High Shares of Variable Generation
- Steve BRICK, Senior Policy Adviser, Clean Air Task Force, and Senior Fellow | Implications of High Penetration of Renewables for Decarbonisation
- Laurent SCHMITT, Smart Grid Strategy Leader, General Electric (GE) | Smart Networks and Demand Response
SESSION 4 - OPTIMISING THE PATH TO 2050 DECARBONISATION
As previous panels have suggested, many technological pathways can lead to a decarbonised electric sector by 2050. However, each low-carbon approach has unique technological, economic, environmental and public acceptance challenges. Decision-making for deeply decarbonised futures requires an integrated-systems perspective given the complex trade-offs, uncertainties and interactions among the portfolio of technological options. This session addressed several question: how will, or should, this balance be reached while accounting for region- and country-specific constraints? What are the implications of pathways that do not achieve this balance? Which near-term investments enable progress towards long-term objectives and which ones create barriers towards effective and affordable solutions? What are the roles of policy, market design and innovation to facilitate this systemic transformation by 2050 in the electric sector and beyond?
Moderator: Manuel BARITAUD, Senior Energy Analyst, Gas, Coal, and Power Markets Division, International Energy Agency
- John BISTLINE, Technical Leader, Energy and Environment, Electric Power Research Institute (EPRI) | Finding the Optimal Path
- Carla FRISCH, Director of Climate and Environmental Analysis, US Department of Energy | The US Perspective
- Tom HOWES | The EU Perspective
Electric Power Research Institute
Gas, Coal, and Power Markets Division
International Energy Agency