http://rael.berkeley.eduERG

Daniel Kammen, Juan Pablo Carvalloand Patricia Hidalgo-Gonzalez

Energy and Resources GroupRenewable and Appropriate Energy Laboratory

University of California, Berkeley

July 10, 2015

A framework to manage national decarbonization regimes (O-2237b-03)

http://rael.berkeley.eduERG2

Research question

How do carbon prices affect the evolution of power systems?

• Studies have focused on (i) determining a “right” social price for carbon and (ii) interactions between carbon prices and other instruments through broad energy-economy models.

• We study the effects of different carbon prices on technological deployment pathways using a high resolution representation for the electricity sector

• Study four regions:

• Economically developed (WECC-USA)

• Emergent economy (China)

• Emergent service-based economy (Chile)

• Less developed economy (Nicaragua)

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Methodology

SWITCH model and simulations

• SWITCH is a capacity expansion model for the electricity grid.

• SWITCH is implemented as a deterministic linear program to concurrently minimize generation, transmission, storage, and distribution investment and operation.

• Unlike most capacity expansion models, SWITCH uses high spatial and temporal resolution

• 400 - 2400 sample hours per simulation

• 17 - 50 electric nodes or “load zones”

• For each regional model we run simulations from 0 to 100 $/tonCO2 in increments of $10/tonCO2.

• We compare subsequent carbon price scenario runs to understand the marginal effect of a $10/tonCO2 additional price adder on system.

• We compare BAU scenarios with forced moratorium on new coal plants to understand the interactions between moratoriums and carbon prices.

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Results

Carbon price triggers “tipping points” in power systems

• There are non-linear marginal effects of a price adder increase.• Increasing slopes mean that decarbonization is accelerated in this carbon price range.• Moratorium on new coal plants make low carbon price adders less effective

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Results

Tipping points are defined by different and potentially inconsistent technological choices

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Results

Low carbon prices trigger reduced investment in new coal plants.

• A majority of abatement in BAU scenarios come from reduced investment in new coal plants.

• Existing coal plants are retired at higher carbon prices. Most of these plants continue to operate in China and WECC-USA at $100/tonCO2

http://rael.berkeley.eduERG7

Results

We find mixed evidence of the cost-efficiency of forced moratorium policies on new coal plants

• Abatement is more expensive in moratorium scenarios, with the exception of China.

• Regions achieve similar abatement at similar prices, but under different carbon regimes.

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Dynamic response to carbon pricing varies importantly across regions

Results

• Carbon intensity of the power system is generally described through an “S” function.

• Potential for reduction in carbon intensity is not equally distributed across regions.

• LIEs should aim to stabilize their carbon intensity.

http://rael.berkeley.eduERG9

Results

Transmission system’s expansion is an accurate descriptor of system tipping points

• The relevant shifts in the sign of the marginal adoption imply that low carbon price based expansions may create important sunk costs if other technologies are adopted under higher carbon prices

http://rael.berkeley.eduERG10

Conclusions

• Carbon prices define specific non-additive innovation and environmental pathways for power systems

• An earlier and more aggressive carbon price may be a preferred strategy compared to a gradual increase to produce cost effective decarbonization regimes

• These results have important implications for the means that carbon prices may be set regionally or globally

http://rael.berkeley.eduERG

Daniel Kammen, Juan Pablo Carvalloand Patricia Hidalgo-Gonzalez

Energy and Resources GroupRenewable and Appropriate Energy Laboratory

University of California, Berkeley

July 10, 2015

A framework to manage national decarbonization regimes