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

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:
Report Number(s):
PNNL-ACT-SA-10189
Journal ID: ISSN 0301-4215; PII: S0301421517305062
Grant/Contract Number:
AC05-76RL01830
Type:
Accepted Manuscript
Journal Name:
Energy Policy
Additional Journal Information:
Journal Volume: 110; Journal Issue: C; Journal ID: ISSN 0301-4215
Publisher:
Elsevier
Research Org:
Pacific Northwest National Lab. (PNNL), Richland, WA (United States)
Sponsoring Org:
USDOE
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
OSTI Identifier:
1395292