The new U.S. administration’s policies could prove to be pivotal in the global fight to tackle climate breakdown. President Joe Biden signed a host of executive orders on “Climate Day” at the end of January. The directives included measures to re-join the Paris Agreement, appoint a climate “czar,” pull the plug on the Keystone XL oil pipeline, and order the Pentagon to make climate change an issue of national security. The country clearly has a renewed ambition for a zero-carbon energy sector. The question is: How can it be achieved affordably, responsibly, and quickly?
A Zero-Emission Electricity System
At the core of the U.S.’s Clean Energy Policy is the construction of a $2 trillion zero-emission electricity system by 2035 that aims to drive economic recovery and job creation, while protecting communities that lie in the crosshairs of climate change. The ambitious goals set by the new administration have raised doubts about the timeline, with one source even estimating that the costs of realizing a 90% decarbonized energy system could reach $7 trillion.
However, modeling has revealed a very different decarbonization picture. Wärtsilä has used smart technology, energy experience, and power system modeling to analyze the potential to meet the vast energy demands of grids in more than 145 regions around the world. The company’s recent report “Aligning stimulus with energy transformation” indicated the U.S. could achieve a zero-emission electricity system by 2035 through investing $1.7 trillion into wind and solar, along with energy storage and flexible generation to balance system intermittence and volatility.
The most productive areas for wind and solar in the U.S. are in relatively low-populated areas, so massively scaling up renewables is possible, but will require significant investment in network infrastructure to transport clean energy to homes and businesses where it is used. However, even considering the construction of new transmission lines to export the increased amount of wind and solar power, Wärtsilä’s modeling shows the overall cost of a zero-emission electricity system would stay well within the U.S. administration’s $2 trillion estimate.
Onshore wind and solar are by far the cheapest forms of new electricity generation and are the only economically viable way to achieve decarbonization at the pace and scale required. According to Wärtsilä’s modeling, the U.S. vision for a zero-emission electricity system could be achieved by deploying 1,700 GW of new renewable energy capacity over the next 15 years. This is undoubtedly a huge undertaking, but would be transformative for the country, creating cleaner air, transforming the green economy, and generating almost nine million sustainable jobs, according to the report.
Flexibility: The Best Friend of Renewables
With such a significant amount of new renewables to be installed, flexibility in the form of energy storage and carbon-neutral flexible gas power plants—enabled by renewable fuels—will be key to balancing the grid. Modeling indicates the U.S. would need 410 GW of new battery energy storage capacity by 2035, combined with 116 GW of new flexible gas-fired power capacity operating on renewable bio or synthetic carbon-neutral fuels. That would be created via 151 GW of new electrolyzer capacity for power-to-gas fuel production.
In this approach, firm, fast-starting natural gas power plants complement renewables in the short term, while also future-proofing utility portfolios through the ability to burn carbon-neutral fuels, such as synthetic methane and hydrogen, which are just around the corner. Future fuels produced through the power-to-X process present a huge opportunity to capitalize on, not curtail, excess renewable energy to provide clean, flexible thermal balancing, alongside clean, transportable fuel to power buildings, mobility, and industry.
These fuels could form a large seasonal storage to compensate for weather changes and seasonal variations like winter. They can be stored, transported, and used to decarbonize all energy-consuming sectors, making the utility sector more relevant than it has ever been within the U.S. economy. This cost-optimal zero-carbon energy system will come to fruition when energy systems reach 80% to 90% renewables, as power-to-X will enable the final step to 100% renewable power by powering responsive gas engines with carbon-neutral fuel.
The End of Fossil Fuel Subsidies?
A zero-carbon energy system is viable for $2 trillion, but in a post-COVID world, can the U.S. be expected to generate that level of investment? The signals coming from the White House suggest as much and reflect the changing investment structure and valuing of carbon. Redirecting $40 billion in fossil fuel subsidies to focus on flexible power systems and future fuels, such as synthetic methane and hydrogen, would significantly accelerate the decarbonization transition.
President Biden plans to outline the U.S. climate plan on the global stage at the COP26 meeting in Glasgow, UK, in November, which his Special Presidential Envoy for Climate, John Kerry, recently described as “the last best chance the world has to come together to avoid the worst consequences of the climate crisis.” The chance of grasping that opportunity today seems more possible, especially if the utility sector steers the way. ■
—Sushil Purohit is president of Wärtsilä Energy.