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Ultra Low Carbon Electricity Systems: Intermittent (Renewables) or Baseload (Nuclear and CCS)?

By: Jared Moore, Ph.D.Independent Energy Tech/Policy Advisor

jared@meridianenergypolicy.com

Commissioned by the Energy Innovation Reform Project

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1) For cost effective modest decarbonization goals ( < 60% low carbon), more RE because generators with lowest LCOE generally dominant

2) For cost effective deep decarbonization goals ( > 80% low carbon), less RE because generators with highest utilization generally dominant

How much renewable energy should be on the grid?

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Why is deep decarbonization different?

Deep decarbonization ( > 80% low carbon):

Exclusive reliance on capital intense generators

increases importance of utilization

Lack of coincidence between supply and demand on seasonal and diurnal basis creates utilization challenge

Nuclear/CCUS + solar offer highest utilization Dispatchable Low Carbon (DLC)

Seasonal Mismatch between Supply and Demand (ERCOT)

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Utilization maximizing Wind/Solar combination to meet 80% of load: Average Demand

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Seasonal Mismatch between Supply and Demand (ERCOT)

Seasonal Oversupply: Low utilization of renewable energy

Seasonal Undersupply: Low utilization of “conventional” capacity

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Resolving persistent periods of oversupply and undersupply would require seasonal utilization of storage or demand response.

1 Tesla Powerwall/home,25% peak demand, 60 GWh, andsaturates at 3 am on first day.

Storage depletes at 4 am on the first day.

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Utilization maximizing wind/solar combination no storage

+ 1 Powerwall/home

+ 2 Powerwalls/home

+ 6 Powerwalls/home

+ 3 Powerwalls/home

DLC and solar no storage

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More storage can increase utilization of low carbon energy, but then takes on problem of low utilization itself

6th Powerwall is about an order of magnitude less effective at increasing utilization than the first.

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Four Days in AugustFour Days in March

Utilization Maximizing Combination of Low Carbon Energy: 90% DLC, 10% Solar, and 0% Wind

Dispatchable Low Carbon (DLC)

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Cases with storage

Cases without Storage

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Renewable deployment, especially if dominated by wind, decreases utilization of future DLC generators

Storage increases utilization of DLC generation

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Which Combination of Wind, Solar, and DLC Minimizes Costs?

1) Scale wind, solar, or baseload output within an Excel-based, hourly economic dispatch model using hourly (8760) demand from ERCOT

2) Assume:– Value of reliability or Equivalent load Carrying

Capability (ELCC) @ $330/MW-day– Wind LCOE @ $80/MWh, ELCC starting at 25%– Solar LCOE @ $90/MWh, ELCC starting at 50%– DLC LCOE @ $100/MWh, ELCC of 95%

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Wind ($80/MWh)

Solar ($90/MWh)

DLC ($100/MWh)

Contribution of Generators Dependent on Decarbonization Desired

Without Storage

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Wind ($80/MWh)

Solar ($90/MWh)

DLC ($100/MWh)With Storage(1 Tesla Powerwall/home)

Without Storage

Contribution of Generators Dependent on Decarbonization Desired

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Policy Implications:• Cost effective modest decarbonization is not necessarily

the path to cost effective deep decarbonization

• Weak carbon price does not send adequate price signals to incent DLC generation. Instead, may create low utilization problem for these generators.

• Policy intervention, such as “Capacity Portfolio Standard”, may be more cost effective for deep decarbonization

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Thermal inertia of earth drives diurnal and seasonal mismatch between low carbon supply and electricity demand

Peak electricity demand occurs during minimum wind supply and later

than peak solar supply.

Peak solar supply Minimum solar supply

Peak wind supply: Temperature delta between North Pole and equator is greatest