Setting cost targets for zero-emission electricity generation technologies. (15th September 2019)

• Record Type: Journal Article
• Authors: Mai, Trieu; Cole, Wesley; Reimers, Andrew
• Is Part Of: Applied energy. Volume 250(2019)
• Page Start: 582
• Page End: 592
• Publication Date: 2019-09-15
• Subjects: Power system modeling -- Energy economics -- Technology innovation -- Grid integration; AEO Annual Energy Outlook (U.S. Energy Information Administration) -- CO2 carbon dioxide -- CSP concentrating solar power -- DOE U.S. Department of Energy -- DNI direct normal irradiance -- GW gigawatt -- LCOE levelized cost of electricity -- MWh megawatt-hour -- MW megawatt -- NREL National Renewable Energy Laboratory -- NG natural gas -- PV photovoltaic -- ReEDS Regional Energy Deployment System (model) -- RE renewable energy -- R&D research and development; Power (Mechanics) -- Periodicals; Energy conservation -- Periodicals; Energy conversion -- Periodicals; 621.042
• DOI: 10.1016/j.apenergy.2019.05.001
• Languages: English
• ISSNs: 0306-2619

Abstract

Highlights: Modeling method to quantify technology costs required to reach specific deployment. Nuclear levelized costs of $53–84/MWh required for incremental 1% by 2050. Concentrating solar power costs of $65–91/MWh required for incremental 1% by 2050. Offshore wind costs of $39–77/MWh required for incremental 1% by 2050. More challenging cost targets found with greater penetration due to value decline. Abstract: Clean energy deployment scenarios typically assume a diverse mix of low-emission generation. However, because of historically low natural gas prices and cost reductions for onshore wind and photovoltaic technologies, recent new capacity deployment, especially in the United States, has come largely from these three generation sources. Here, we quantify competitive cost targets for three less-common zero-emission generation technologies—nuclear, concentrating solar, and offshore wind—under a range of future conditions. We determine the cost targets based on the technologies' system value, such that technology value equals or exceeds its cost. Using a capacity expansion model that develops system-wide, economically optimal generation scenarios of the United States power sector, we find that nuclear, concentrating solar, and offshore wind would need to attain levelized cost ranges of $53–84/MWh, $65–91/MWh, and $39–77/MWh, respectively, to achieve 1% additional grid penetration. We refer to this metric as the "required cost, " which is a technology's levelized cost of energy needed to achieve a specific penetration level. Higher penetrations lead to lower required costs as lower-cost generation is displaced. We estimate that to reach 10% penetration, the required cost for nuclear declines to $45–76/MWh. Because of resource variability and increased transmission needs for concentrating solar power and offshore wind, even lower costs are needed to reach higher penetrations: required cost ranges to achieve 10% penetration are estimated to be $30–56/MWh and $18–40/MWh for these two technologies respectively. Our analysis informs research and development priorities and the design of policies supporting clean technologies.