Decarbonizing U.S. Electricity by 2035 Could Costs Less Than Expected
Date Posted: December 10, 2020
Posted In: Ideas,
From Energy News Network: Most of the United States’ existing fossil fuel power plant capacity will reach the end of its typical lifespan by 2035, according to new research published this week in Science.
Findings of the Dec. 4 study suggest that a deadline to decarbonize electricity by then will cost less than previously expected. The study follows on the heels of an October report from the Applied Economics Clinic and the Institute for Energy Economics and Financial Analysis that found the risks of investing in natural gas plants in the PJM grid region likely outweigh the financial rewards.
“What this work shows is that it’s probably not going to be a massive problem” to shut down remaining fossil fuel-fired electricity generation, said Emily Grubert, a civil engineer at Georgia Tech and author of the study in Science. Her work focuses on infrastructure engineering and sustainable communities. “Basically, the plants are already pretty old and this gives us a huge leg up in trying to retire carbon-based infrastructure.”
By 2035, her calculations show that only about 15% of capacity-years would remain for power plants powered by fossil fuels. In other words, if you added up all the years of capacity left for all fossil fuel power plants running in 2018, less than one-sixth of the total years would remain.
From a planning perspective, that means states and utilities can probably worry less about the economics of closing down plants early, Grubert said.
Compensation for stranded assets can come into play when “somebody builds something in good faith and then policy or some other occurrence forces it to shut down much, much earlier than expected,” Grubert said. Some plant owners might argue that they would still have outstanding debts or lose income they had reasonably expected.