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At least 19 records

Quantifying the regional stranded asset risks from new coal plants under 1.5 °C

Momentum to phase out unabated coal use is growing globally. This transition is critical to meeting the Paris climate goals but can potentially lead to large amounts of stranded assets, especially in regions with newer and growing coal fleets. Here we combine plant-level data with a global integrated assessment model to quantify changes in global stranded asset risks from coal-fired power plants across regions and over time. With new plant proposals, cancellations, and retirements over the past five years, global net committed emissions in 2030 from existing and planned coal plants declined by 3.3 GtCO 2 (25%). While these emissions are now roughly in line with initial Nationally Determined Contributions (NDCs) to the Paris Agreement, they remain far off track from longer-term climate goals. Progress made in 2021 towards no new coal can potentially avoid a 24% (503 GW) increase in capacity and a 55% ($520 billion) increase in stranded assets under 1.5 °C. Stranded asset risks fall disproportionately on emerging Asian economies with newer and growing coal fleets. Recent no new coal commitments from major coal financers can potentially reduce stranding of international investments by over 50%.

54 ENVIRONMENTAL SCIENCES↗

Mitigating Stranded Asset Risks to Utility Customers: an Exploration of Securitization and Retiring Coal Generation

Coal generation currently accounts for approximately 19.5 percent of electricity generated in the United States, down from 51.7 percent of the generation mix in 2000. In 2023, the EIA expects 8.9 gigawatts (GW) of planned retirements of coal-fired capacity. Many of the coal-fired power plant retirements that have already occurred or are planned for the next decade will be plants that have not yet reached the end of their useful life, and are therefore not fully depreciated. Ensuring that utility customers do not face an undue burden in paying for these stranded assets will become an increasingly important issue over the next few years for PUCs overseeing the safety, reliability, and affordability of investor-owned utility service. This report reviews the role that securitization can play in reducing the costs associated with stranded assets due to early coal plant retirements.

01 COAL, LIGNITE, AND PEAT↗

plutus: An R package to calculate electricity investments and stranded assets from the Global Change Analysis Model (GCAM)

plutus is an R package that post-processes outputs from the Global Change Analysis Model (GCAM) to calculate the power sector capital investment costs and stranded asset costs associated with GCAM projections of electricity generation by technology. GCAM is a market equilibrium model used to examine the dynamics of the coupled human-Earth system and the response of this system to global change, including socioeconomics, technology, climate, and policy. GCAM tracks electricity generation by technology and vintage over 32 geopolitical regions throughout the lifetime of each generating technology. plutus extends GCAM functionality by (1) estimating the foregone economic value of prematurely retired power plants as a result of economic-induced retirements compared to scheduled lifetimes; and (2) estimating the new installations and capital investments driven by future changes in economic, energy, agriculture, and land-use systems in GCAM.

97 MATHEMATICS AND COMPUTING↗

Stranded asset implications of the Paris Agreement in Latin America and the Caribbean

Achieving the Paris Agreement's near-term goals (Nationally Determined Contributions, NDCs) and long-term temperature targets could result in pre-mature retirement, or stranding, of carbon-intensive assets before the end of their useful lifetime. We use an integrated assessment model to quantify the implications of the Paris Agreement for stranded assets in Latin America and the Caribbean (LAC), a developing region with the least carbon-intensive power sector in the world. We find that meeting the Paris goals results in stranding of 37-90 billion and investment of 1.9-2.6 trillion worth of power sector capital (2021-2050) across a range of future scenarios. Strengthening the NDCs could reduce stranding costs by 27-40%. Additionally, while politically shielding power plants from pre-mature retirement or increasing the role of other sectors (e.g. land-use) could also reduce power sector stranding, such actions could make mitigation more expensive and negatively impact society. For example, we find that avoiding stranded assets in the power sector increases food prices 13%, suggesting implications for food security in LAC. Our analysis demonstrates that climate goals are relevant for investment decisions even in developing countries with low emissions.

54 ENVIRONMENTAL SCIENCES↗

A Comprehensive Economic Coal Transition in South Asia

Many countries are considering accelerating their coal transition. A coal transition refers to an energy sector’s shift from a reliance on coal toward an energy mix largely based on cleaner fuels and renewable energy sources. Such a transition is not just related to greenhouse gas emissions, but also encompasses a range of benefits, recognizing that global energy costs and options are changing. Since 2015, proposed new coal power capacity has dropped by three-quarters globally, leaving only a few countries that develop coal-fired power plants at scale (Littlecott et al., 2021). Historic steps were taken at the United Nations Climate Change 26th Conference of Parties (COP26) in Glasgow, as countries pledged to stop new coal builds, end international coal financing, phase down and phase out unabated coal use, and transition to clean energy. In South Asia, there have been several indicators suggesting that countries may be open to moving toward a coal transition. For example, the number of coal power plants under development across South Asia has decreased by 87% since 2015 (Littlecott et al., 2021). However, the challenges of assuring a just transition are substantial. Because coal plays a critical role in the energy and economic systems in South Asia, especially India, moving away from coal means realizing a broader country-wide economic and social transition. A comprehensive, integrated transition strategy for each state is thus needed urgently. This report briefly reviews the current trends and policies on coal in South Asian countries, develops a framework for a comprehensive economic coal transition, and assesses the opportunities and challenges of the transition in key countries. Several important findings emerge from the analysis. First, a coal transition can support overall economic growth and stability. Financial advantages to a well-planned coal transition include mitigating the risk of stranded assets and taking advantage of low-cost renewables. As a global coal transition proceeds, funds are being diverted from new unabated coal power plants, and utilization rates are declining. The likelihood that coal assets will become stranded is increasing, and the potential for future losses therefore increases as well. Second, coal imports in South Asia are rising. Of the coal consumed in Bangladesh, India, Nepal, and Sri Lanka, 32% is imported; this number increases to 94% when excluding India (International Energy Agency [IEA], 2021d). This illustrates a serious energy security risk. One example is the recent increase in coal prices in South Asia, to be discussed in Section 2.2.1. A diverse energy portfolio that incorporates local renewable energy can provide resilience in the face of changing commodity prices and availability. Third, the social benefits of a coal transition include positive health impacts and broader economic improvements in job creation, although assuring a just transition may be a challenge. Phasing out or phasing down coal can significantly reduce air pollutant emissions and therefore minimize associated premature mortality and improve life expectancy. Additional societal benefits of a coal transition include the high economy-wide potential for job creation, although it creates challenges in terms of reintegration and resettlement for coal miners and their communities.

01 COAL, LIGNITE, AND PEAT↗

A novel green hydrogen production using water-energy nexus framework

The transformation of electrical energy to hydrogen via water electrolysis consumes considerable amount of fresh water and a productive use of nontraditional water sources enhances the reliability and resilience of energy and water systems. In this study, we have designed a solid oxide electrolysis cell (SOEC) system which is an evolving hydrogen production technology at high temperatures for water electrolysis. Here, the SOEC uses steam generated from flue gas as its feedstock and is fully integrated with numerous power production units, including coal and natural gas-fired power plants as its energy feedstock. While there is a hasten global shift away from fossil fuel, integrating its asset into this technology helps limit the risk and future losses of stranded assets and reduce the cost of investment in the new technologies. But high capital expenditures and doubt concerning the future cost and efficiency upgrade are obstacles to investing in water electrolysis. Such a detailed Levelized cost of hydrogen and techno-economic analysis is conducted to show the viability and environmental impacts of this novel technology. The results show SOEC efficiency of 97.4 % and 56.3 % as thermal-to-hydrogen efficiency of the system with a daily hydrogen production of 242,400 kg at $2.9–3.5/kg H 2 . The estimates show a positive gain prospect in this technology and techno-economic challenges.

08 HYDROGEN↗

Integrated protonic ceramic electrochemical cell for sustainable energy economy using water-energy nexus framework

Reliance on fossil fuels will continue for the next decades even though there are global pushes away from it to mitigate the overarching climate challenge, most especially by its highest consumers and availability. While there is a hastening global shift away from fossil fuel, integrating its assets into this technology helps limit the risk and future losses of stranded assets and reduce the cost of investment in the new technologies. Moreover, the generation of electricity from intermittent renewable sources like solar and wind has witnessed a significant surge in recent years, leading to a pressing demand for practical energy storage systems. Electrical energy storage is anticipated to play a pivotal role in the future global energy system, facilitating load-leveling operations to support the greater integration of renewable and distributed generation. Reversible electrochemical cells (RECs) offer a promising option for addressing the fossil fuel assets integration and energy storage challenges through the interconversion between electrical and chemical energy and concurrent utilizing carbon emission. In their electrolysis mode, the RECs convert electricity into durable, storable, and portable valuable chemical fuels such as syngas and methane. Conversely, the produced chemical fuels can be used as reactants in the fuel cell mode to generate electricity on demand with minimal (hydrocarbons) or zero when H2 or NH3 is used emissions. However, a challenging goal for this type of technology remains to achieve optimal operation and high roundtrip efficiencies, which has hindered the deployment of previous electrochemical cells. This dissertation demonstrates how reversible protonic ceramic electrochemical cells (RePCECs) can be integrated with fossil fuel power plants and renewable energy sources as a potential energy storage system. In this work, integrated RePCEC systems are designed and examined using computational modeling at scales to determine appropriate system configurations and operating conditions that achieve high roundtrip efficiencies. Cell level design of the PCEC is the first approach, several cells are assembled for the stack level model that is integrated into combined cycle powerplant and solar photovoltaic for the system level model. After critical literature review, this answered the operational and integration research questions proposed to address these challenges. The designed systems perform two functions, utilizing captured CO2 and storing renewable energy through co-electrolysis of steam and CO2. The co-electrolysis reaction involves endothermic water electrolysis and exothermic methanation reaction. To enhance high roundtrip efficiency, there is a need for thermal balance and management in the electrolysis mode. This involves operating the RePCEC stack under conditions that favor methane production to balance out heat needed by water electrolysis, it crucial for the RePCEC system operation. Methanation is enhanced by low temperatures. Leveraging on fabricated BCZYYb-electrolyte RePCEC, the cell model designed revealed that the optimum temperature for methane production is 450℃ at atmospheric pressure. Thus, to achieve optimum system performance, operating in the temperature range 450-525℃ is recommended at the given configuration, combining between the optimum temperature for methane production and temperature for the optimum stack roundtrip efficiency. Configuration with carbon capture system and purge stream is the optimum configuration from the seven conceptualized and evaluated. The modeling outcomes include a thermodynamic examination of integrated RePCEC systems, calibration of cell and stack level models, and steady-state simulation and integration into a 600MW combined cycle power plant retrofitted with two two-stage membrane-based carbon capture system and a wastewater treatment and recovery unit. At 100% powerplant loading, the stack and system roundtrip efficiencies are 72% and 51.37% respectively. Adding a purge stream for produced hydrogen at the system downstream improves the efficiencies to 74 and 55.48% respectively. At atmospheric pressure and 525℃, the system model suggests that a stack roundtrip of 82% is achievable, and overall system efficiency increases by reducing the energy consumption by the balance of plant components for steam generation and storage. Economic analysis of the process gives levelized cost of methane as $2.24/MMBtu lower than the conventional production route that range between $3.46/MMBtu and $9.85/MMBtu. The lifecycle analysis shows that the global warming potential for the production of methane and hydrogen from the RePCEC system is 3.83 kg CO2 eq which is lower than 9.35 kg CO2 eq emission during steam methane reforming for hydrogen production. This answered both the environmental and economic concerns in the raised research question. The proposed RePCEC configuration and analysis carried out in this dissertation to address the surge in renewable energy and challenges with PCEC technology hold significant potential in achieving large-scale energy storage while simultaneously reducing carbon emissions. These advancements, coupled with suitable governmental policies and incentive programs, have the potential to economically disrupt the natural gas industries by using RePCEC systems for methane production, thereby making them more favorable for eventual implementation and commercialization.

25 ENERGY STORAGE↗

Advanced Oxygen-Free Electrolyzer for Ultra-Low-Cost H 2 Storage for Fossil Plants (Final Technical Report)

DOE’s Office of Fossil Energy and Carbon Management has determined that long-duration energy storage solutions co-located with fossil energy assets offer significant benefits to the fossil industry, electric utilities, and customers. T2M Global has developed an Advanced O 2 -Free Electrolyzer System (AES) Technology for low-cost, long-duration H 2 energy storage for fossil plants. The MW-class AES Module conceptual design aims to upgrade stranded assets (dilute/waste syngas streams, excess electricity, and waste heat) at fossil plants to higher value H 2 for additional revenue and greater sustainability. The H 2 energy storage equips fossil plants with the load following capability needed for the lucrative grid-support services market created by Variable Renewable Energy resources.

08 HYDROGEN↗

Storing Affordability: Battery Storage as an Asset to Reduce Data Center Cost Shifts

This report examines how battery energy storage systems (BESS) can help utilities accommodate large load growth while protecting affordability for existing ratepayers. Rapid growth in electricity demand from artificial intelligence (AI) data centers is straining the U.S. grid. Furthermore, many new data centers are entering rural markets, which could offer economic benefits but may also pose implementation challenges for smaller utilities. At the same time, retail electricity prices are increasing faster than inflation, elevating customer affordability as a key challenge. While data centers have not been the primary driver of increases in residential prices to date, they have pushed wholesale energy and capacity prices higher in several markets. Fundamental utility cost-allocation principles show that data center growth can be rate-positive for existing customers only if new peak demand grows faster than the costs a utility must incur to serve it. Several factors, including a utility’s degree of wholesale market exposure, forecast uncertainty and stranded-asset risk, and tariff design can determine the outcome of load growth on retail rates. Energy storage can make several affordability contributions in the face of this landscape of uncertainty and market volatility, including deferral of higher-cost grid investments through improved utilization of existing assets and flexibility of new large loads, insulation from volatile wholesale prices through peak shaving, and reliability support to address grid risks stemming from the behavior of AI data center loads. Different potential BESS deployment pathways—utility-scale front-of-the-meter systems, aggregated small-scale storage installations, and data center-sited behind-the-meter storage—are compared against each other and against conventional capacity alternatives. This framework is intended as a conceptual resource to utilities, particularly smaller public utilities with rural service territories, who may be considering the role that energy storage can play in insulating existing ratepayers from data center cost shifts.

25 ENERGY STORAGE↗

State-by-state energy-water-land-health impacts of the US net-zero emissions goal

As decisionmakers at various scales begin to design strategies to implement the US net-zero goal, a holistic understanding of its broader economic and sustainability implications at subnational scales is important to shape public support and facilitate implementation. Here, we use an integrated assessment model to explore four different pathways toward the US net-zero goal and investigate their energy-water-land-health implications at the state level. In this study, we show that achieving the net-zero goal implies significant capital turnover (170–200 billion USD/year capital investment and 16–29 billion USD/year stranded assets in the power sector), reduced water withdrawal (120–210 km 3 /year), avoided air pollution damages (220–300 billion USD/year), and expanded forests (300–500 thousand km 2 ). However, the economic and sustainability implications of achieving the net-zero goal at the state-level may not be correlated to a state's contribution to national emission reductions. Our study lays the foundations for a deeper understanding of the broader implications of the US net-zero goal to facilitate cost-effective and environmentally sustainable transitions toward that goal.

54 ENVIRONMENTAL SCIENCES↗

Energy system analysis of cutting off Russian gas supply to the European Union

The reduction of European Union's pipeline gas imports from Russia as a consequence of the Russian war against Ukraine has had severe economy-wide implications for the EU. Using a multisector integrated assessment model (GCAM), we find that a potential complete cut-off of Russian pipeline gas exports to the EU unevenly impacts the energy mix, prices, and trade flows of different subregions within the EU, depending on their access to alternative gas pipelines and LNG infrastructure. Moreover, there are also large changes in the volume and geographical distribution of global gas infrastructure capacity additions and stranded assets. Our results show that by significantly reducing demand for natural gas, the EU Fit-for-55 policy framework already improves resilience against a complete and persistent cut-off of Russian pipeline gas. However, further improvements in energy efficiency and renewable targets could further soften impacts, while bringing climate objectives closer in sight.

29 ENERGY PLANNING, POLICY, AND ECONOMY↗

Large Ensemble Exploration of Global Energy Transitions Under National Emissions Pledges

Global climate goals require a transition to a deeply decarbonized energy system. Meeting the objectives of the Paris Agreement through countries' nationally determined contributions and long-term strategies represents a complex problem with consequences across multiple systems shrouded by deep uncertainty. Robust, large-ensemble methods and analyses mapping a wide range of possible future states of the world are needed to help policymakers design effective strategies to meet emissions reduction goals. This study contributes a scenario discovery analysis applied to a large ensemble of 5,760 model realizations generated using the Global Change Analysis Model. Eleven energy-related uncertainties are systematically varied, representing national mitigation pledges, institutional factors, and techno-economic parameters, among others. The resulting ensemble maps how uncertainties impact common energy system metrics used to characterize national and global pathways toward deep decarbonization. Results show globally consistent but regionally variable energy transitions as measured by multiple metrics, including electricity costs and stranded assets. Larger economies and developing regions experience more severe economic outcomes across a broad sampling of uncertainty. The scale of CO 2 removal globally determines how much the energy system can continue to emit, but the relative role of different CO 2 removal options in meeting decarbonization goals varies across regions. Previous studies characterizing uncertainty have typically focused on a few scenarios, and other large-ensemble work has not (to our knowledge) combined this framework with national emissions pledges or institutional factors. Our results underscore the value of large-ensemble scenario discovery for decision support as countries begin to design strategies to meet their goals.

29 ENERGY PLANNING, POLICY, AND ECONOMY↗

Modeling direct air carbon capture and storage in a 1.5 °C climate future using historical analogs

Limiting the rise in global temperature to 1.5 °C will rely, in part, on technologies to remove CO 2 from the atmosphere. However, many carbon dioxide removal (CDR) technologies are in the early stages of development, and there is limited data to inform predictions of their future adoption. Here, we present an approach to model adoption of early-stage technologies such as CDR and apply it to direct air carbon capture and storage (DACCS). Our approach combines empirical data on historical technology analogs and early adoption indicators to model a range of feasible growth pathways. We use these pathways as inputs to an integrated assessment model (the Global Change Analysis Model, GCAM) and evaluate their effects under an emissions policy to limit end-of-century temperature change to 1.5 °C. Adoption varies widely across analogs, which share different strategic similarities with DACCS. If DACCS growth mirrors high-growth analogs (e.g., solar photovoltaics), it can reach up to 4.9 GtCO 2 removal by midcentury, compared to as low as 0.2 GtCO 2 for low-growth analogs (e.g., natural gas pipelines). For these slower growing analogs, unabated fossil fuel generation in 2050 is reduced by 44% compared to high-growth analogs, with implications for energy investments and stranded assets. Residual emissions at the end of the century are also substantially lower (by up to 43% and 34% in transportation and industry) under lower DACCS scenarios. The large variation in growth rates observed for different analogs can also point to policy takeaways for enabling DACCS.

32 ENERGY CONSERVATION, CONSUMPTION, AND UTILIZATI↗

The Net Zero World Initiative’s Preliminary Analysis of Decarbonization Pathways for Five Countries

Under the Net Zero World Initiative, the United States is mobilizing the capabilities of nine U.S. government agencies, led by the U.S. Department of Energy (DOE), to partner with philanthropies and multiple countries to cocreate and implement tailored technical and investment pathways to accelerate the decarbonization of global energy systems. In addition, 10 of the DOE national laboratories have built a consortium housed in the Net Zero World Action Center to implement this vision by providing the deep analysis and modeling required to carry out the vision. As a whole-of-government program, the Net Zero World Initiative partners with countries committed to raising their climate ambitions by creating and implementing highly tailored, actionable technical and investment strategies that put a net-zero world within reach. The initiative enables country partners to harness the convening power and technical expertise of U.S. agencies and laboratories, international industry, and technical institutions while providing the United States an opportunity to learn from and deepen U.S. technical cooperation with key countries. This report is the first of a series, with future Phase II work being informed by ongoing consultations with the partner countries to address country pathway analysis priorities. This future work will likely include evaluating detailed technological, policy, and investment options for key sectors and for energy systems holistically. This analysis may examine in greater detail the economic and social benefits of net-zero energy transitions, including quality jobs and health outcomes, the impacts of price and supply volatility on energy investments and decisions, the risk of stranded assets, and related issues.

29 ENERGY PLANNING, POLICY, AND ECONOMY↗

Electricity Rate Designs for Large Loads: Evolving Practices and Opportunities

Electricity demand from large load customers such as data centers is projected to grow significantly in the near term. While data centers play an important role in advancing technology innovation and economic growth in the United States, data center energy needs present challenges and opportunities for electricity supply and infrastructure. This technical brief serves as a foundation for the discussion of issues and sharing of perspectives among utilities, regulators, large load customers, and other stakeholders. As utilities and regulators explore rate structures to address growing data center electricity demand, several issues have emerged: -Fair allocation of electricity system costs to large-load customers without unfair shifting of costs to other customers -Appropriate mitigation of the financial risks associated with stranded assets from underutilized utility system investments -Mitigation of operational and resource adequacy risks if electricity demand exceeds supply -Appropriate risk-sharing in commercializing newer electricity technologies such as advanced geothermal, small modular reactors, and long duration energy storage -Accommodating the diverse needs of large-load customers, such as having the option to match electricity consumption with output from carbon-free resources or using onsite generation to provide system capacity The technical brief also identifies key design elements that aim to address these issues and uses leading examples from pending and approved rate structures, agreements, and special contracts to ground the elements in practice.

24 POWER TRANSMISSION AND DISTRIBUTION↗

Renewable Energy Systems in the Transition of North America to Net Zero Emissions

The North American transition to low-carbon energy sources depends on the technology decisions of its diverse communities and stakeholders. Each region and industry will have its own portfolio of renewable energy technologies to meet the common goal of net zero emissions. Our presentation will share integrated renewable energy solutions being explored at scale by major U.S cities, rural regions dependent on oil and gas, and industries redefining their infrastructure and their missions. Case examples will be presented on: the Los Angeles 100% renewable energy goals; challenges and opportunities of decarbonizing and reducing emissions from the oil and gas industry; repurposing oil and gas infrastructure such as using pipelines for hydrogen blends and renewable natural gas and idle wells for geothermal energy and energy storage; treatment of produced water using renewable energy for agriculture applications; and the preserving water and agricultural resources in the transition to renewable energy. Key challenges will also be discussed, including resilience to increasing disasters, stranded assets, unequal community impact, and meeting the last 5-20% of energy with renewable energy.

challenges↗

Photovoltaic Deployment Scenarios toward Global Decarbonization: Role of Disruptive Technologies

To totally decarbonize global electrical systems using photovoltaics (PVs) in the 2050–2060 decade, the world would need to install 63.4 TW of PV. This article models and explores how a PV manufacturing ramp‐up trajectory toward this goal can be achieved while assuming that investors continue to make financially rational decisions avoiding stranded production assets and therefore protecting their return on investment. The model effectively exploits experience curve benefits in both the scaling of the manufacturing process and continued progress in product design technologies. The scale‐up challenge is amplified because trajectories that achieve this goal require an unprecedented ramp‐up of production capacity over just two decades, followed by relatively modest demand to maintain the installed base and support continued population growth. It is demonstrated that sustainable ramp‐up of manufacturing is indeed possible and shown that the deployment of the requisite manufacturing capacity can be accelerated and accomplished at lower total capital cost by the introduction of disruptive technologies that have lower capital intensity, embedded energy, or higher efficiency.

14 SOLAR ENERGY↗

Disruptive Photovoltaic Technologies Can Accelerate Global Decarbonization

This contribution explores PV manufacturing capacity expansion trajectories needed to achieve the goal of global decarbonization assuming that investors make financially rational decisions avoiding stranded production assets while still effectively exploiting experience curve benefits in both manufacturing process and product design. Substantial production cost savings and timely decarbonization risk mitigation could accrue by adoption and scaling of high efficiency multijunction device architectures and thin film direct bandgap semiconductor technologies that provide lower manufacturing capital intensity. We demonstrate that there is a $1-2 trillion market opportunity for such disruptive technologies while also providing hundreds of billions of dollars of cost savings to reach total decarbonization.

decarbonization↗