Capital investment requirements for greenhouse gas emissions mitigation in power generation on near term to century time scales and global to regional spatial scales

Journal Article · Sat Nov 01 04:00:00 EDT 2014 · Energy Economics, 46:267-278

DOI:https://doi.org/10.1016/j.eneco.2014.09.008· OSTI ID:1188914

Chaturvedi, Vaibhav; Clarke, Leon E.; Edmonds, James A.; Calvin, Katherine V.; Kyle, G. Page

Electrification plays a crucial role in cost-effective greenhouse gas emissions mitigation strategies. Such strategies in turn carry implications for financial capital markets. This paper explores the implication of climate mitigation policy for capital investment demands by the electric power sector on decade to century time scales. We go further to explore the implications of technology performance and the stringency of climate policy for capital investment demands by the power sector. Finally, we discuss the regional distribution of investment demands. We find that stabilizing GHG emissions will require additional investment in the electricity generation sector over and above investments that would be need in the absence of climate policy, in the range of 16 to 29 Trillion US$ (60-110%) depending on the stringency of climate policy during the period 2015 to 2095 under default technology assumptions. This increase reflects the higher capital intensity of power systems that control emissions. Limits on the penetration of nuclear and carbon capture and storage technology could increase costs substantially. Energy efficiency improvements can reduce the investment requirement by 8 to21 Trillion US$ (default technology assumptions), depending on climate policy scenario with higher savings being obtained under the most stringent climate policy. The heaviest investments in power generation were observed in the China, India, SE Asia and Africa regions with the latter three regions dominating in the second half of the 21st century.

• Research Organization: Pacific Northwest National Laboratory (PNNL), Richland, WA (US)
• Sponsoring Organization: USDOE
• DOE Contract Number: AC05-76RL01830
• OSTI ID: 1188914
• Report Number(s): PNNL-SA-94964; AA9020300
• Journal Information: Energy Economics, 46:267-278, Journal Name: Energy Economics, 46:267-278
• Country of Publication: United States
• Language: English

Related Subjects

Climate Policy
Eectricity generation
Global
Integrated assessment modeling
Investment
Long term