Decarbonizing the U.S. power sector by 2030 faces major challenges — a $4.5 trillion price tag, a redesign of the power sector and pressure on the renewable energy supply chain — but it can be done if the timeline is extended, according to Wood Mackenzie, a consulting firm.
“Wood Mackenzie concludes that [100 percent renewable energy] goals remain largely aspirational, but attainable given a reasonable time horizon to allow for technology development, regulatory realignment and socio-economic reforms,” the consulting firm said in a report released in late June.
The report comes as states like California, Colorado, Hawaii, Maine, New Mexico, New York, Washington and the District of Columbia have adopted 100 percent renewable and clean energy goals and mandates, generally in the 2050 timeframe.
There are about 1,060 gigawatts of capacity in the United States, including about 130 GW of wind and solar, according to Wood Mackenzie. The United States would need about 1,600 GW of new wind and solar to entirely replace fossil-fueled power plants, which would cost about $1.5 trillion the consulting firm estimated.
Also, Wood Mackenzie said about 900 GW of energy storage with the ability to discharge over 24 hours at a time would be needed to handle the intermittent wind and solar. “The recent proliferation of smaller, short run lithium ion storage plants fails to deliver the longer duration storage capability critical to balancing seasonal swings in wind energy production or extended resource droughts stemming from major weather events,” the report said.
Assuming 24 hours of duration (16.8 TWh), these storage assets would more than double costs to $4 trillion.
About 200,000 miles of new high-voltage transmission lines would need to be built, which would add another approximately $700 billion.
In summary -- excluding supply chain impacts and other items, such as stranded costs -- an investment of $4.5 trillion would be required to fully transition the US power grid to renewables over the next 10 to 20 years, which implies an investment of roughly $225 to $450 billion a year, a scale comparable to the total US defense budget.
Given enough time, new, lower cost technologies may emerge that would facilitate a 100 percent renewables scenario, the consulting firm said. Potential break-through areas include “grid edge” technologies like power-flow controls, demand response, next-generation storage such as flow batteries, power-to-gas technologies and nuclear fission or fusion, according to Wood Mackenzie.
“A 2040 or 2050 target allows for new technologies – like those listed above – to incubate and reach commercial scale,” Wood Mackenzie said. “A 2030 target, meanwhile, would preclude many technologies that are still in the development phase.”
Also, including nuclear power in a zero-carbon goal would lower costs by about $500 billion, according to the consulting firm. Nuclear plants provide 60 percent of U.S. clean energy, Wood Mackenzie noted.
“Inclusion of more non-intermittent renewable sources would also mitigate transmission and storage investment needs while also easing supply chain constraints,” the consulting firm said.
Reducing a zero carbon goal to 80 percent from 100 percent would lower renewable costs by 20 percent and storage costs by about 60 percent, Wood Mackenzie said.
Also, adopting zero carbon goals of 100 percent or 80 percent increases the likelihood of success by spurring the development of next-generation nuclear and carbon capture technologies, Wood Mackenzie said.
The report is available here.