U.S. energy sector impacts of technology innovation, fuel price, and electric sector CO₂ policy: Results from the EMF 32 model intercomparison study

Journal Article · Fri Jun 01 04:00:00 EDT 2018 · Energy Economics

DOI:https://doi.org/10.1016/j.eneco.2018.03.027· OSTI ID:1455271

Hodson, Elke L.; Brown, Maxwell; Cohen, Stuart; Showalter, Sharon; Wise, Marshall; Wood, Frances; Caron, Justin; Feijoo, Felipe; Iyer, Gokul; Cleary, Kathryne

We study the impact of achieving technology innovation goals, representing significant technology cost reductions and performance improvements, in both the electric power and end-use sectors by comparing outputs from four energy-economic models through the year 2050. We harmonize model input assumptions and then compare results in scenarios that vary natural gas prices, technology cost and performance metrics, and the implementation of a representative national electricity sector carbon dioxide (CO₂) policy. Achieving the representative technology innovation goals decreases CO₂ emissions in all models, regardless of natural gas price, due to increased energy efficiency and low-carbon generation becoming more cost competitive. For the models that include domestic natural gas markets, achieving the technology innovation goals lowers wholesale electricity prices, but this effect diminishes as projected natural gas prices increase. Higher natural gas prices lead to higher wholesale electricity prices but fewer coal capacity retirements. Some of the models include energy efficiency improvements as part of achieving the high-technology goals. Absent these energy efficiency improvements, low-cost electricity facilitates greater electricity consumption. The effect of implementing a representative electricity sector CO₂ policy differs considerably depending on the cost and performance of generating and end-use technologies. The CO₂ policy influences electric sector evolution in the cases with reference technology assumptions but has little to no influence in the cases that achieve the technology innovation goals. This outcome implies that meeting the representative technology innovation goals achieves a generation mix with similar CO₂ emissions to the representative CO₂ policy but with smaller increases to wholesale electricity prices. Finally, higher natural gas prices, achieving the representative technology innovation goals, and the combination of the two, increases the amount of renewable generation that is cost-effective to build and operate while slowing the growth of natural-gas fired generation, which is the predominant generation type in 2050 under reference conditions.

• Research Organization: Pacific Northwest National Laboratory (PNNL), Richland, WA (US)
• Sponsoring Organization: USDOE
• DOE Contract Number: AC05-76RL01830
• OSTI ID: 1455271
• Report Number(s): PNNL-SA-133176; PE0600000
• Journal Information: Energy Economics, Journal Name: Energy Economics Journal Issue: C Vol. 73; ISSN 0140-9883
• Publisher: Elsevier
• Country of Publication: United States
• Language: English

Related Subjects

CO2 Policy
Electric Power Sector
Greenhouse Gas Emissions
Technology Innovation
Wholesale Electricity Prices