As the largest contributor to carbon emissions, responsible for about two-thirds globally, the energy sector must be at the forefront of the decarbonisation efforts required to meet the COP 21 Paris Agreement objectives.
Low carbon renewable generation technologies are obviously key but what does decarbonisation mean in practice for a utility? Indeed, is it even possible to achieve economy-wide decarbonisation?
To answer these questions US utility Portland General Electric (PGE) engaged ‘deep decarbonisation’ consultants Evolved Energy Research to look at the opportunities and challenges and the implications for the sector.
CO2 reduction scenarios
The approach taken in the study, which is still ongoing, is to investigate future scenarios to achieving steep reductions in CO2 emissions across PGE’s service territory in Oregon to meet the state’s current 2050 goal of 75% below 1990 levels.
PGE’s area accounts for about 45% of the state’s population. To achieve its carbon budget, the per capita emissions should decrease by 90% - from a 1990 level of 16tCO2 to 1.6tCO2 in 2050.
The modelling tracks all the energy infrastructure, both existing and new, including its demand, emissions and costs, and finds that decarbonisation can be achieved using a variety of technologies and strategies. However, all approaches depend on three ‘pillars’ – energy efficiency, i.e. per capita final consumption; decarbonisation of electricity generation, and the increased electrification and use of electric fuels in other parts of the economy such as industry and transportation.
Low carbon energy technologies
While the detail of the study is specific to PGE as a utility and climatic and other conditions in the state of Oregon, some interesting findings emerge alongside the standard ones from what appears to be a first of its type.
General findings include the need for both consumer and producer participation to achieve decarbonisation, with customers playing an active role with, for example, smart charging of electric vehicles (EVs). New energy infrastructure also is needed, with timely planning to account for the investment requirements, which should be based on an integrated resource planning approach.
A notable finding is the ongoing importance of utility-scale renewables. Even with high distributed resource proliferation, PGE is projected to need an average 600MW capacity addition per year between 2030 to 2050.
Another, and a key finding for utilities hesitant about supporting EV development, is that with decarbonisation PGE’s retail sales of electricity could increase by up to 75% in 2050 relative to today. About half of this increase is attributed to electrification of transportation. The study assumed 100% of vehicle sales from 2035 on are zero emission, with delays beyond that year resulting in carbon emission targets not being met.
The research also notes that such a change will change the composition of customers’ energy bills with more spent on technology and less on fuels.
Utility decarbonisation studies
The question then arises whether all utilities should undertake a decarbonisation study. The goal of the present investigation is not to recommend a specific pathway but rather to outline different approaches and their impacts.
One key point the study highlights is that carbon emission reduction is much more than 100% renewables. Indeed, the complexity is such that a utility target doesn’t necessarily correspond with a local or national target.
Another is the importance of electric and other zero-emission (including hydrogen) transportation and the targets that are necessary for its adoption to achieving carbon reduction targets.
What is clear from the study is that while 2050 may appear to be far away, from a utility perspective the longer long-term planning is delayed the more stringent will be the targets and the more challenging they will be to achieve.