What Will the Transition to a Clean Electricity System Look Like?

Last Friday I attended a talk by Venita McCellon-Allen, the President of the Southwestern Electric Power Company (SWEPCO), at the Columbia University Energy Symposium. To hear her tell it, the only way to keep everyone’s iPhones charged up is to build more conventional coal and gas power plants. She dismissed renewable electricity sources as trivial in scale and didn’t say a word about energy efficiency. Her talk epitomized a business-as-usual view of the future of the electric power industry.

I guess she hadn’t read the new report, Toward a Sustainable Future for the U.S. Power Sector: Beyond Business as Usual 2011, released earlier in the week by Synapse Energy Economics. Synapse demonstrates that a much cleaner, healthier future is not only possible, but very affordable.

In the Synapse “Transition” scenario carbon dioxide emissions are cut 25% by 2020 and 80% by 2050 as energy efficiency, wind, and solar replace coal and hold natural gas use to below current levels until after 2030 (gas use by the power industry increases from about 8 Quadrillion Btus (Quads) in 2010 to between 9 and 10 Quads in 2050, which represents 29 percent less gas consumption than in the business-as-usual scenario).  

By 2050 Synapse envisions a little more than 40% of electricity coming from non-hydro renewable energy sources, primarily wind and solar. The study accounts for the additional investments in transmission capacity and energy storage needed to integrate this high level of variable resources into the grid. Synapse notes that this job is made somewhat easier by the fact that inflexible coal plants have been phased out, leaving natural gas combined cycle and combustion turbine plants, which can be ramped up and down much more quickly to balance load. (As the California study I discussed previously notes, relying too heavily on natural gas for load balancing does not reduce carbon emissions enough to be considered truly sustainable in the long-term. It would be good if Synapse considered a broader array of grid flexibility options, including more zero-emission load balancing technologies in its next iteration of this report).

Synapse goes further than many long-term scenarios analyses by attempting to estimate the net cost of following the Transition scenario compared to Business-as-Usual. Their surprising conclusion: The reductions in carbon dioxide and other pollutants that would result from the transition scenario can be accomplished at a net savings over the 40 years considered in the study, even without counting the value of the reduced emissions. This comes about because added investments in energy efficiency, demand response, transmission and energy storage are more than offset by reduced electricity generating costs. The lower generating costs themselves are a net difference between savings from generating fewer kilowatt-hours and higher costs per kilowatt-hour, particular for solar.

One significant short-coming of the Synapse analysis is that it assumes that about half of the fleet of coal power plants is allowed to delay compliance with EPA pollution regulations for up to a decade. Such a delay shouldn’t, and I believe, won’t be allowed. (The authors told me that this assumption was in no way intended to indicate that they endorsed such a delay. Rather they were trying to be conservative in their definition of the business-as-usual scenario).

Complying on schedule may mean that some power plants have to install pollution controls by 2015 even if they are going to shut down by 2030. That’s worth doing because the health benefits from sticking to the legally-required schedule far outweigh the economic savings from avoiding these retrofit costs. Synapse counts a savings of $12 billion in 2030 by assuming that these pollution control costs can be delayed and then avoided by shutting the plants down, but even without the savings from avoided environmental controls the Transition scenario would still cost less than business-as-usual, again without counting the value of reduced emissions (and there would still be some avoided environmental control costs for plants that shut down prior to existing clean up deadlines).

Synapse also doesn’t discuss the policies needed to ensure that we follow the Transition scenario. I will leave a detailed discussion of that to another day, but there is good reason to believe that we can get there through strong national pollution standards for mercury, sulfur, nitrogen oxides, and carbon, combined with federal and state energy efficiency and renewable energy policies, plus rising local opposition to dirty coal plants.

The Transition scenario is certainly more attractive than the bleak business-as-usual world that SWEPCO seems to be stuck in. 

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