Dec 11, 2013

Renewables and natural gas the future in Texas

Admin
4 min
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The future of the Texas electric market will likely include substantial amounts of renewable energy and gas-fired power, economists with The Brattle Group find in a new report prepared for the Texas Clean Energy Coalition.

With over 12,000 megawatts of installed capacity, Texas is the largest state producer of wind-powered electricity in the U.S., more than double the next two largest wind capacity states combined. At the same time, Texas is the leading U.S. producer of natural gas, and the state generates over 40 percent of its electricity from natural gas plants.

Add to that the prospects for solar energy from the abundant sun and Texas is in a position to produce cleaner, more affordable and reliable electricity than ever before while helping improve economic well-being for Texans.

This preliminary review by the Brattle economists found the relationship between natural gas and renewables had aspects that were both complementary and, in some cases, substitutive. The research team also found that over the next two decades the degree to which natural gas or renewables “crowd out” the other source, as opposed to develop together, was a function of future policies and market design features, technological developments, and the price of electric fuels and resources of all types.

“Exploring Natural Gas and Renewables in ERCOT, Part II: Future Generation Scenarios for Texas” provides a 20-year outlook for natural gas and renewable power in Texas. It is the first examination of its kind to be conducted and shared publicly in Texas.

In June, The Brattle Group produced a white paper for TCEC exploring qualitatively the short- and long-term interaction between natural gas and renewables in Texas’ energy future.

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TCEC Chairman Kip Averitt, a former state senator and chairman of the Senate Natural Resources Committee, said the report, funded by The Cynthia and George Mitchell Foundation (www.CGMF.org), uses state-of-the-art modeling in a series of scenarios – including a range of natural gas prices, a required reserve margin, and different wind and solar energy costs – to simulate the Electric Reliability Council of Texas (ERCOT) system through 2032.

“The objective of this report was to examine broad patterns of interaction between renewable resources and natural gas over the next two decades,” Averitt said. “The report illustrates the key drivers of gas and renewable development in ERCOT to better inform Texas policymakers and decision makers about the range of possible outcomes.”

In the new report, the Brattle team examines the future of gas and renewable power in Texas analytically through the simulation of several grid expansion scenarios.

Key findings related to the future of natural gas and renewable energy, include:

  • Under the range of scenarios, natural gas and renewables both play substantial roles in ERCOT and provide all new generation needed to respond to growth in the state’s population. No new coal plants are built in any scenarios.
  • Across the more likely scenarios, wind and solar grow from their current 10 percent generation share to levels between 25 and 43 percent. Natural gas-fired generation provides all of the remaining incremental generation, adding 12 to 25 gigwatts of new combined-cycle capacity – a 38 to 80 percent increase in the current installed base.
  • The mix of new gas and renewables generation is sensitive to the price of natural gas and cost declines in wind and solar power. Changes in these three factors can cause significant shifts in the mix of future installations, leading to a wide range of plausible generation shares for wind, solar, and natural gas.
  • Among gas-fired power plants, nearly all future additions are combined-cycle gas turbine (CCGT) plants rather than traditional gas turbines, due to the fact that CCGTs are more efficient and expected to be more flexible than other turbines.
  • The study found that the ERCOT system could accommodate all levels of variable renewables likely to occur during this period with no reliability problems. However, accommodating higher levels of renewables required the model to use an additional ancillary service – known as the intraday commitment option – and to adjust the levels of current ancillary services.
  • The analysis shows that federal production tax credit and ERCOT ratepayer funding of new transmission lines remain important drivers of wind development.
  • A reserve margin has a very small overall effect on the generation mix or emissions in ERCOT through 2032. However, scenarios using higher gas prices and lower renewables costs reduce the growth of CO2, NOX, and SO2 substantially. A stringent federal carbon policy reduces 2032 CO2 by 66 percent versus 2012.
  • Existing coal units in ERCOT remain profitable and are not retired unless a relatively stringent federal carbon policy is adopted. A federal carbon policy requiring 90 percent capture and storage of carbon, for example, would prompt the retirement of most ERCOT coal units.
  • Under the strong federal carbon policy scenario, gas and renewable generation would together replace the energy formerly supplied by coal plants. In this case renewable energy could rise to become 43 percent of ERCOT generation by 2032.

The complete report is available at http://www.texascleanenergy.org/2013-research.php.

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Jul 29, 2021

Carbon dioxide removal revenues worth £2bn a year by 2030

Energy
technology
CCUS
Netzero
Dominic Ellis
4 min
Engineered greenhouse gas removals will become "a major new infrastructure sector" in the coming decades says the UK's National Infrastructure Commission

Carbon dioxide removal revenues could reach £2bn a year by 2030 in the UK with costs per megatonne totalling up to £400 million, according to the National Infrastructure Commission

Engineered greenhouse gas removals will become "a major new infrastructure sector" in the coming decades - although costs are uncertain given removal technologies are in their infancy - and revenues could match that of the UK’s water sector by 2050. The Commission’s analysis suggests engineered removals technologies need to have capacity to remove five to ten megatonnes of carbon dioxide no later than 2030, and between 40 and 100 megatonnes by 2050.

The Commission states technologies fit into two categories: extracting carbon dioxide directly out of the air; and bioenergy with carbon capture technology – processing biomass to recapture carbon dioxide absorbed as the fuel grew. In both cases, the captured CO2 is then stored permanently out of the atmosphere, typically under the seabed.

The report sets out how the engineered removal and storage of carbon dioxide offers the most realistic way to mitigate the final slice of emissions expected to remain by the 2040s from sources that don’t currently have a decarbonisation solution, like aviation and agriculture. 

It stresses that the potential of these technologies is “not an excuse to delay necessary action elsewhere” and cannot replace efforts to reduce emissions from sectors like road transport or power, where removals would be a more expensive alternative.  

The critical role these technologies will play in meeting climate targets means government must rapidly kick start the sector so that it becomes viable by the 2030s, according to the report, which was commissioned by government in November 2020. 

Early movement by the UK to develop the expertise and capacity in greenhouse gas removal technologies could create a comparative advantage, with the prospect of other countries needing to procure the knowledge and skills the UK develops.

The Commission recommends that government should support the development of this new sector in the short term with policies that drive delivery of these technologies and create demand through obligations on polluting industries, which will over time enable a competitive market to develop. Robust independent regulation must also be put in place from the start to help build public and investor confidence.

While the burden of these costs could be shared by different parts of industries required to pay for removals or in part shared with government, the report acknowledges that, over the longer term, the aim should be to have polluting sectors pay for removals they need to reach carbon targets.

Polluting industries are likely to pass a proportion of the costs onto consumers. While those with bigger household expenditures will pay more than those on lower incomes, the report underlines that government will need to identify ways of protecting vulnerable consumers and to decide where in relevant industry supply chains the costs should fall.

Chair of the National Infrastructure Commission, Sir John Armitt, said taking steps to clean our air is something we’re going to have to get used to, just as we already manage our wastewater and household refuse. 

"While engineered removals will not be everyone’s favourite device in the toolkit, they are there for the hardest jobs. And in the overall project of mitigating our impact on the planet for the sake of generations to come, we need every tool we can find," he said.

“But to get close to having the sector operating where and when we need it to, the government needs to get ahead of the game now. The adaptive approach to market building we recommend will create the best environment for emerging technologies to develop quickly and show their worth, avoiding the need for government to pick winners. We know from the dramatic fall in the cost of renewables that this approach works and we must apply the lessons learned to this novel, but necessary, technology.” 

The Intergovernmental Panel on Climate Change and International Energy Agency estimate a global capacity for engineered removals of 2,000 to 16,000 megatonnes of carbon dioxide each year by 2050 will be needed in order to meet global reduction targets. 

Yesterday Summit Carbon Solutions received "a strategic investment" from John Deere to advance a major CCUS project (click here). The project will accelerate decarbonisation efforts across the agriculture industry by enabling the production of low carbon ethanol, resulting in the production of more sustainable food, feed, and fuel. Summit Carbon Solutions has partnered with 31 biorefineries across the Midwest United States to capture and permanently sequester their CO2 emissions.  

Cory Reed, President, Agriculture & Turf Division of John Deere, said: "Carbon neutral ethanol would have a positive impact on the environment and bolster the long-term sustainability of the agriculture industry. The work Summit Carbon Solutions is doing will be critical in delivering on these goals."

McKinsey highlights a number of CCUS methods which can drive CO2 to net zero:

  • Today’s leader: Enhanced oil recovery Among CO2 uses by industry, enhanced oil recovery leads the field. It accounts for around 90 percent of all CO2 usage today
  • Cementing in CO2 for the ages New processes could lock up CO2 permanently in concrete, “storing” CO2 in buildings, sidewalks, or anywhere else concrete is used
  • Carbon neutral fuel for jets Technically, CO2 could be used to create virtually any type of fuel. Through a chemical reaction, CO2 captured from industry can be combined with hydrogen to create synthetic gasoline, jet fuel, and diesel
  • Capturing CO2 from ambient air - anywhere Direct air capture (DAC) could push CO2 emissions into negative territory in a big way
  • The biomass-energy cycle: CO2 neutral or even negative Bioenergy with carbon capture and storage relies on nature to remove CO2 from the atmosphere for use elsewhere

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