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Title: Sensitivity of natural gas deployment in the US power sector to future carbon policy expectations

Abstract

One option for reducing carbon emissions in the power sector is replacement of coal-fired generation with less carbon-intensive natural gas combined cycle (NGCC) generation. In the United States, where there is abundant, low-cost natural gas supply, increased NGCC deployment could be a cost-effective emissions abatement opportunity at relatively modest carbon prices. However, under scenarios in which carbon prices rise and deeper emissions reductions are achieved, other technologies may be more cost-effective than NGCC in the future. In this analysis, using a US energy system model with foresight (a version of the National Energy Modeling System or “NEMS” model), we find that varying expectations about carbon prices after 2030 does not materially affect NGCC deployment prior to 2030, all else equal. An important implication of this result is that, under the set of natural gas and carbon price trajectories explored here, myopic behavior or other imperfect expectations about potential future carbon policy do not change the natural gas deployment path or lead to stranded natural gas generation infrastructure. Lastly, we explain these results in terms of the underlying economic competition between available generation technologies and discuss the broader relevance to US climate change mitigation policy.

Authors:
 [1];  [2];  [2];  [3];  [4]
  1. ExxonMobil Research and Engineering Company, Annandale, NJ (United States)
  2. OnLocation, Inc., Vienna, VA (United States)
  3. Pacific Northwest National Lab. (PNNL), Richland, WA (United States)
  4. National Renewable Energy Lab. (NREL), Golden, CO (United States)
Publication Date:
Research Org.:
Pacific Northwest National Lab. (PNNL), Richland, WA (United States); National Renewable Energy Lab. (NREL), Golden, CO (United States)
Sponsoring Org.:
USDOE; ExxonMobil Research and Engineering Company
OSTI Identifier:
1395292
Alternate Identifier(s):
OSTI ID: 1412832
Report Number(s):
[PNNL-ACT-SA-10189; NREL/JA-6A50-67242]
[Journal ID: ISSN 0301-4215; PII: S0301421517305062]
Grant/Contract Number:  
[AC05-76RL01830; AC36-08GO28308]
Resource Type:
Accepted Manuscript
Journal Name:
Energy Policy
Additional Journal Information:
[ Journal Volume: 110; Journal Issue: C]; Journal ID: ISSN 0301-4215
Publisher:
Elsevier
Country of Publication:
United States
Language:
English
Subject:
03 NATURAL GAS; 29 ENERGY PLANNING, POLICY, AND ECONOMY; Natural gas; Climate change mitigation; Energy system transformation; Energy modeling; natural gas; climate change mitigation; energy system transformation; energy modeling

Citation Formats

Mignone, Bryan K., Showalter, Sharon, Wood, Frances, McJeon, Haewon, and Steinberg, Daniel. Sensitivity of natural gas deployment in the US power sector to future carbon policy expectations. United States: N. p., 2017. Web. doi:10.1016/J.ENPOL.2017.08.012.
Mignone, Bryan K., Showalter, Sharon, Wood, Frances, McJeon, Haewon, & Steinberg, Daniel. Sensitivity of natural gas deployment in the US power sector to future carbon policy expectations. United States. doi:10.1016/J.ENPOL.2017.08.012.
Mignone, Bryan K., Showalter, Sharon, Wood, Frances, McJeon, Haewon, and Steinberg, Daniel. Thu . "Sensitivity of natural gas deployment in the US power sector to future carbon policy expectations". United States. doi:10.1016/J.ENPOL.2017.08.012. https://www.osti.gov/servlets/purl/1395292.
@article{osti_1395292,
title = {Sensitivity of natural gas deployment in the US power sector to future carbon policy expectations},
author = {Mignone, Bryan K. and Showalter, Sharon and Wood, Frances and McJeon, Haewon and Steinberg, Daniel},
abstractNote = {One option for reducing carbon emissions in the power sector is replacement of coal-fired generation with less carbon-intensive natural gas combined cycle (NGCC) generation. In the United States, where there is abundant, low-cost natural gas supply, increased NGCC deployment could be a cost-effective emissions abatement opportunity at relatively modest carbon prices. However, under scenarios in which carbon prices rise and deeper emissions reductions are achieved, other technologies may be more cost-effective than NGCC in the future. In this analysis, using a US energy system model with foresight (a version of the National Energy Modeling System or “NEMS” model), we find that varying expectations about carbon prices after 2030 does not materially affect NGCC deployment prior to 2030, all else equal. An important implication of this result is that, under the set of natural gas and carbon price trajectories explored here, myopic behavior or other imperfect expectations about potential future carbon policy do not change the natural gas deployment path or lead to stranded natural gas generation infrastructure. Lastly, we explain these results in terms of the underlying economic competition between available generation technologies and discuss the broader relevance to US climate change mitigation policy.},
doi = {10.1016/J.ENPOL.2017.08.012},
journal = {Energy Policy},
number = [C],
volume = [110],
place = {United States},
year = {2017},
month = {9}
}

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Figures / Tables:

Fig. 1 Fig. 1: US electricity generation from coal without carbon capture and storage (panel a) and natural gas without carbon capture and storage (panel b) plotted against US power sector CO2 emissions. Results are taken from the AMPERE model comparison study that included nine energy-economy, computable general equilibrium, and integrated assessmentmore » models (Kriegler et al., 2015). Each modeling group considered a common set of scenarios, including a suite of different technology cases, each of which was run subject to different atmospheric concentration targets (Riahi et al., 2015). Orange markers in this figure indicate conditions in the models in 2010, blue markers indicate outcomes in 2030 from “optimal policy” cases designed to achieve atmospheric stabilization at 550 ppm CO2e, and green markers indicate outcomes in 2030 from “optimal policy” cases designed to achieve atmospheric stabilization at 450 ppm CO2e. The red crosses indicate outcomes in 2030 from the two main scenarios developed and discussed in this study. Note that only scenarios with power sector emissions less than 3000 Mt CO2 are shown in these charts. For underlying data associated with the AMPERE project, see: http://ampere-project.eu/web/.« less

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Works referencing / citing this record:

Review of the United States energy system in transition
journal, January 2019


    Figures/Tables have been extracted from DOE-funded journal article accepted manuscripts.