Utilities seeking financing for environmental upgrades should look to the markets for debt and equity, rather than trying to securitize those costs.
The Power to Reduce CO2 Emissions: The Full Portfolio
What the U.S. electricity sector must do to significantly reduce CO2 emissions in coming decades.
The large-scale CO 2 reductions envisioned to stabilize, and ultimately reverse, global atmospheric CO 2 concentrations present major technical, economic, regulatory and policy challenges. Reconciling these challenges with continued growth in energy demand highlights the need for a diverse, economy-wide approach.
The Electric Power Research Institute (EPRI) conducted a three-part analysis to assess the technical feasibility of substantial CO 2 emissions reductions from the U.S. electricity sector; to identify the technology development pathways and associated research, development, and demonstration (RD&D) funding needed to achieve this potential; and to evaluate the economic impact of realizing emissions reduction targets. Three major conclusions emerge in this study:
• The strategy for reducing electricity sector emissions will be technology-based. A technology-based strategy is sustainable, minimizes costs to the U.S. economy, and creates opportunities for decarbonization beyond the electricity sector and ultimately beyond the U.S. economy.
• A diverse portfolio of advanced technologies will be required. No single technological “silver bullet” will suffice. Rather, a full portfolio is needed that includes efficiency, renewable energy resources, nuclear, coal with carbon capture and sequestration, and other technologies enabled by expanded transmission and distribution system capabilities.
• Significant RD&D will be needed over a sustained period, and technology development lead times demand immediate action. Timely and sustained investment in public and private RD&D could lower the cost of emissions reductions on the order of $1 trillion, and significantly limit increases in wholesale electricity costs.
The EPRI analyses are documented in a public domain report entitled The Power to Reduce CO 2: The Full Portfolio, available at www.epri.com. This article summarizes section 3 of that study, addressing the technology pathways that must be developed to enable substantial CO 2 emissions reductions from the U.S. electricity sector. The RD&D pathways addressed in this analysis are providing the framework for a more detailed RD&D action plan that EPRI is developing.
Technology Development Pathways
EPRI’s analysis reveals four key strategic technology deployment challenges that must be met for the U.S. electricity sector to significantly reduce CO 2 emissions over the coming decades:
• Deployment of smart distribution grids and communications infrastructures to enable widespread end-use efficiency technology deployment, distributed generation, and plug-in hybrid electric vehicles.
• Deployment of transmission grids and associated energy storage infrastructures with the capacity and reliability to operate with 20 to 30 percent intermittent renewables in specific regions of the United States.
• Deployment of advanced light water reactors enabled by continued safe and economic operation of the existing nuclear fleet.
• Deployment of commercial-scale coal-based generation units operating with 90 percent CO 2 capture and with the associated infrastructures to transport and sequester the captured CO 2.
The specific technologies associated with each of these challenges are at various stages of development.