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Pathways Towards 100% Carbon Reduction for Electric Utility Power Systems

Across the country, electric utilities and government agencies are pushing for a 100 percent carbon-free energy future. At Wärtsilä, we are passionate about leading the transition to renewable energy, as we help our customers optimize their energy systems and future-proof their assets everyday.

Our “path to 100%” initiative is an essential step in the right direction for our planet. We need a realistic plan forward, relying on a community of experts and enthusiastic stakeholders to discuss, research and share actionable solutions to reach 100 percent decarbonization.

Path to 100 percent carbon reduction for electric utilities: What does this look like?

Despite the enthusiasm and media coverage about a global clean-energy transition, a few major questions remain in this journey to 100 percent, especially for electric utilities: What is the cost of a “carbon-free” system versus a “carbon-neutral system”? And what are these costs relative to? Our new whitepaper, “Pathways towards 100% carbon reduction for electric utility power systems,” addresses these questions by determining the costs and carbon reduction trajectories associated with 100 percent targets.

Economics alone can get us far along the path to 100%

Even if state and federal governments do not mandate CO2 reductions, renewable portfolio standards, subsidies, or carbon taxes, our results indicate that a typical U.S. electric utility can achieve significant carbon reductions simply based on economic considerations alone.

The path to 100% carbon free is the most expensive option

In the debate over carbon-free versus carbon-neutral, our analysis found that the path to a 100 percent carbon-free portfolio that disallows combustion of renewable fuels is the most expensive path forward.  If a utility must be 100% carbon-free, reliant on nuclear and hydro, variable renewable energy (VREs) like wind and solar, and storage alternatives (like batteries), which usually have a less than 12-hour duration, the necessary consequence is overbuild. Wind and solar capacity must be installed in large enough quantities to meet demand even when wind is sporadic or not blowing at all, and/or when solar is minimized due to day length or cloud cover. Energy storage is required in large volumes to account for missing renewable energy.

The path to 100 % carbon-neutral (with renewable PtG) is the least expensive option

The carbon-neutral path is the least costly choice that satisfies Intergovernmental Panel on Climate Change (IPCC) requirements for net zero CO2 emissions by 2050. Power-to-Gas (PtG) technology can provide weeks to months of fuel volumes for use in existing thermal capacity. To attend to seasonal variations in wind, solar, and hydro resources, as well as atypical but not unexpected periods of low renewable generation, electric utility systems need storage systems. PtG technology allows for this provision in a cost optimal way relative to battery storage technology.

Pathways to 100% require additional flexible gas capability

Flexible gas capability is part of the preferred pathway for a cost-optimal completion of the path to 100 percent. Many utilities across the world are retiring slower, inflexible and inefficient baseload units as they phase in greater amounts of wind and solar. As renewables and energy storage cannot currently support the rapid transition to 100 percent clean energy, flexible gas capability is essential. Two forms (flexible, high efficiency reciprocating engines and low cost peaking units) provide either fast start times for real-time energy markets or a low-cost option to satisfy capacity reserve margins and assist with occasional peak loads.

What does this mean?

Exciting new paradigms are emerging that lead electric utilities to explore pathways toward 100 decarbonization. Our research demonstrates that defining 100 percent in alignment with IPCC requirements of net-zero carbon emissions by 2050 is the same as carbon-neutral. From a climate change perspective, the goal is not to eliminate all forms of CO2 but to assure no net increase in atmospheric CO2 concentration.

 

Interested in learning more? Download our whitepaper today.