The Power of Change Innovation for Development and Deployment of Increasingly Clean Electric Power Technologies (2016) / Chapter Skim
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2 Assessment of Current Technologies for and Policies Supporting Increasingly Clean Electric Power Generation
2 Assessment of Current Technologies for and Policies Supporting Increasingly Clean Electric Power Generation
Pages 19-48
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From page 19... ...
, referred to collectively as criteria pollutants as they are regulated under the Clean Air Act. The 2010 National Research Council study estimates that in 2005, the emissions of criteria pollutants from coal-fired power plants caused damages costing, on average, $0.032/kilowatt hour (kWh)
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compared with those currently operating or recently retired. This means not only building increasingly clean power plants in response to new demand, but also encouraging the retirement of more polluting assets in favor of those running on increasingly clean technologies.
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SOURCE: EIA, 2014a. The first factor is that delivered electricity prices do not incorporate the full cost of the harms from the pollution caused by power plants.
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22 FIGURE 2-2 Percentage of current U.S. net electricity generation by primary fuel source, 2015.
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Coal-fired plants produce more SO2 per kWh of generated electricity relative to natural gas-fired plants, so it is not surprising that from 1991 to 2011, most capacity additions were natural gasfired plants. Figure 2-3 also shows increasing construction of new wind and solar facilities following the increase in tax subsidies for these facilities in 2005.
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Natural gas is projected to fluctuate slightly until 2020 and then remain stable at 43 percent, and nuclear to decrease from 10 to 8 percent. IMPACT OF THE MIX OF ELECTRICITY GENERATION SOURCES ON EMISSIONS OVER TIME As of 2014, emissions from power plants of SO2 and particulate matter 10 microns or less in size had decreased by 80 percent and of NOx by 65 percent relative to their levels at the time of the Clean Air Act amendments of 1970 (EPA, 2015)
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SOURCE: EIA, 2016a. FIGURE 2-5 Emissions of carbon dioxide from electric power generation in metric tons per megawatt hour (MWh)
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Technologies that can readily and easily be incorporated into the existing electric power grid and associated infrastructure are much more likely to be adopted and utilized. There currently exist a wide range of increasingly clean electric power generation technologies that can produce lower or no emissions when used.
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Table 2-1 summarizes the 2016 TRLs of these technologies. Cost To understand impediments to the deployment of increasingly clean energy technologies, the committee reviewed assessments of the economic competitiveness of such technologies in a technology-neutral policy environment.
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. Figure 2-6 compares the projected costs of various electric power generation technologies against the cost of an advanced combined-cycle natural gas plant from this perspective where firms do not directly bear the costs of GHG pollution.
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TABLE 2-1 Promising Technologies for Increasingly Clean Electric Power Technology Readiness Levela Technology Category 1 2 3 4 5 6 7 8 9 Renewable Power Generation 1: Electric energy storage 2: Hydro and marine hydrokinetic powerb 3: Advanced solar photovoltaic powerc 4: Advanced concentrating solar power 5: Advanced solar thermal heating 6: Advanced biomass power 7: Engineered/enhanced geothermal systems 8: Advanced wind turbine technologies 9: Advanced integration of distributed resources at high percent Advanced Fossil Fuel Power Generation 10: Carbon capture, transport, and storage 11: Advanced natural gas power and combined heat and power (CHP) c 12: Water and wastewater treatment Nuclear Power Generation 13: Advanced nuclear reactors 14: Small modular nuclear reactors 15: Long-term operation of existing nuclear plants (Continued)
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19: Increased power flow in transmission systems 20: Advanced power electronics Energy Efficiency 21: Efficient electrical technologies for buildings and industry a Technology readiness levels are shown on a scale of 1 to 9, where 1 is the least ready. Most of the technology categories shown include technologies with varying readiness levels.
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From page 31... ...
These estimates suggest that most increasingly clean power technologies are uncompetitive in the market compared with advanced combined-cycle natural gas power generation unless supported by a technology-specific policy. For example, EIA's benchmark LCOE for onshore wind generation is 43 percent higher than that for an advanced combined-cycle natural gas unit.
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Figure 2-7 compares the projected costs of various electric power generation technologies against the cost of an advanced combined-cycle natural gas plant where firms account for the costs of pollution from GHGs when installing power generation technologies, using EIA's assumption that future carbon abatement policies will add roughly $15/ton to the cost of capital for carbon-intensive technologies. 10 Figure 2-7 shows that wind is still 32 percent more expensive than advanced combinedcycle natural gas generation when the costs of pollution are taken into account.
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From page 33... ...
Figure 2-8 compares the projected costs of various electric power generation technologies against the cost of conventional combined-cycle natural gas power generation from the market perspective where firms do not directly bear the costs of pollution. Like EIA's estimates, these estimates suggest that while the costs of renewable technologies have declined significantly in recent years, absent subsidies or an appropriate price on pollution, increasingly clean technologies often cost more in the marketplace.
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NOTE: CC = combined cycle; CCS = carbon capture and storage; IGCC = integrated gasification combined cycle; PV = photovoltaic. SOURCE: Sullivan et al., 2015.
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Again, these ranges suggest that progress has been made in improving the cost-competitiveness of increasingly clean technologies, but continued cost declines are still needed. This is especially true once grid upgrade costs, such as the cost of new transmission assets to accommodate additional wind and solar plants, are incorporated into cost estimates.
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15 Offshore wind and concentrating solar power are both estimated to be more expensive than fossil fuel-fired plants anywhere. Reviewing this evidence and the salient recent literature, it becomes clear that the higher average cost of key increasingly clean electric power generation technologies remains a barrier to their broad deployment (Aldy, 2011)
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case assumes that the performance of increasingly clean power generation technologies will continue to improve and that governments will continue other policies favoring those technologies. 18 Applying these assumptions, EIA projects increases in renewable electric power generation through 2040.
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21 This assumed price on CO2 emissions was projected to increase the average electricity price for 2040 21 In sensitivity cases, EIA examined policies that would favor increasingly clean technologies and made modestly more favorable assumptions regarding the cost of renewable electric power generation. The additional cases included those in which the capital cost of nonhydroelectric renewables was assumed to be 20 percent below reference case levels, and a case in which the carbon price is initially set at $25 per ton of CO2 and increases at a rate of 5 percent per year.
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electricity sector's carbon emissions by incorporating the full costs of pollution into electricity prices would lead to significant increases in prices to ultimate consumers. 22 These results suggest that major improvements in the cost-competitiveness of low-carbon increasingly clean technologies -- improvements that go beyond those assumed in EIA's or NREL's analyses -- will be required if those technologies are to be market-competitive globally to a degree that encourages significant displacement of incumbent technologies.
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WILL EXPANDED DEPLOYMENT MAKE INCREASINGLY CLEAN TECHNOLOGIES MORE ECONOMICALLY COMPETITIVE? Given the above finding that currently available increasingly clean electric power generation technologies are not yet economically competitive compared with conventional, higher-polluting technologies, the committee considered the extent to which policies designed to expand the deployment of cleaner technologies produce meaningful performance improvements and associated cost declines as a result of "learning by doing" (LBD)
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From page 41... ...
Thus, the "learning ratios" in experience curves would not, by themselves, demonstrate that programs subsidizing larger-scale deployment of increasingly clean technologies led to material performance improvements. Experience curves often reflect the impact of multiple factors in addition to LBD (Clarke et al., 2006)
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From page 42... ...
. Studies examining the factors contributing to performance improvements that coincide with policy-driven deployments of increasingly clean technologies indicate that single-factor experience curves should be viewed with caution.
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, on patents for innovation in renewable energy technologies questions whether German feed-in tariffs for PV, wind, and geothermal energy have led to innovation in these technologies. The authors found statistically significant negative correlations between feed-in tariffs for hydroelectric and biomass generation and innovation in these technologies.
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. Some increasingly clean electric power technologies will be economically competitive, either generally or in specific applications, independent of any LBD benefits that might result from their deployment.
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Rather, what is required to achieve these improvements in currently available technologies and to create new, as yet unknown breakthrough technologies is a major investment in inno vation. The development of affordable low-carbon increasingly clean electric power generation technologies could position the United States to take more effective measures to address the risks and uncertainties of climate change.
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From page 46... ...
CONCLUSION The committee's review of currently available increasingly clean electric power generation technologies suggests that they are not yet capable of meeting the challenge of supplying reliable electric power at socially acceptable pollution levels at prices that make them competitive in current electric power markets. Policies therefore need to focus on both the improvement of currently available and the development of new increasingly clean energy technologies.
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From page 47... ...
Recommendation 2-2: Congress should consider an ap propriate price on pollution from power production to level the playing field; create consistent market pull; and expand research, development, and commercialization of increasingly clean energy resources and technologies.
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