The path to a 100% carbon-free portfolio that disallows combustion of renewable fuels is the most expensive option. If a utility must be 100% carbon-free, reliant on nuclear and hydro, Variable Renewable Energy (VRE’s) such as wind and solar, and storage alternatives (like batteries) which are almost universally sub 12-hour duration, a 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. In this work the 100% carbon-free scenarios required more than 3x the combined capacity of wind and solar, and more than six times the amount of storage energy (MWh) than the Cost-Optimal scenario.
Any renewable mandate that disallows combustion of renewable fuels will necessitate the retirement and decommissioning of every thermal asset and the entirety of the fuel infrastructure. Capturing the full cost of this process is complex and beyond the scope of this work, but the costs are substantial. In addition, any system that places heavy reliance on Li-Ion batteries will need to account for degradation and performance loss, which in effect requires complete or partial replacement of the battery modules every ten years or so.
In terms of inefficiencies, when the 100% target is reached, in the carbon-free scenarios approximately 50% of renewable energy (GWh on an annual basis) from wind and solar is in excess of what the system can absorb, resulting in curtailment. This means wind and solar capacity is by no means delivering energy at the expected $/kWh because the capacity factors are reduced considerably relative to what they could produce if left “free” to generate. This implies ratepayers are paying for renewable capacity that is not used to its full potential. It also means that independent power producers (IPPs) under contract to deliver renewable MWh are at risk of being paid for substantially less MWh than their assets actually generate.