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Surge in US power capacity needed to decarbonize grid by 2035, DOE says

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Surge in US power capacity needed to decarbonize grid by 2035, DOE says

The Biden administration's goal to achieve a 100% clean U.S. power grid by 2035 would require a massive jump in generating capacity, the U.S. Energy Department said in a new report.

The growth will be needed as transportation and other sectors electrify, and as carbon removal technologies and clean fuels production boost demand. Despite that massive investment, the public health and climate benefits are likely to outweigh the costs, the DOE's National Renewable Energy Laboratory, or NREL, found in its study.

"Decarbonizing the power system is a necessary step if the worst effects of climate change are to be avoided," said Patrick Brown, NREL analyst and co-author of the study. "The benefits of a zero-carbon grid outweigh the costs in each of the more than 100 scenarios modeled in this study, and accelerated cost declines for renewable and clean energy technologies could lead to even larger benefits."

Core scenarios

In each of the four main scenarios the DOE considered to decarbonize the grid by 2035, installed U.S. generating capacity would have to at least triple from 1,362 GW in 2020, the agency said in a press release on the report. Capacity would also be significantly higher than under the DOE's reference case for 2035, which assumes no new policies are added but that electrification of transportation and end-use demand accelerates. Under the reference case, U.S. generating capacity would total 2,326 GW in 2035.

Under all the main carbon-free scenarios, wind and solar energy supply a combined 60% to 80% of generation in 2035. In the "All Options" scenario, in which direct air capture becomes cost-competitive, fossil fuel-fired plants without carbon capture technology hold on to 15% of total capacity. But cost-competitive direct air capture is not available in the other three scenarios, drastically reducing the amount of fossil fuel-based capacity.

Of the pathways the DOE explored, the highest additional capital and operating costs would stem from the "Constrained" scenario. In that scenario, new grid and renewable power expansions are more limited, and nuclear capacity more than doubles. Decarbonizing by 2035 in that environment would cost another $740 billion compared with the reference case with accelerated electrification, nearly double the cost increases of the three other scenarios. But net benefits would still total $920 billion, the DOE said.

The lowest-cost decarbonization option, called the "Infrastructure Renaissance" scenario, assumes that improved technologies and new permitting and siting approaches support greater transmission deployment. Added system costs relative to the reference case under that approach would total $330 billion, with net benefits of $1.25 trillion. The report did not cite a cost for the reference case scenario.

"The scenarios with the highest cost have restrictions on new transmission and other infrastructure development," the DOE's release on the report said. "In the scenario with the highest cost, the amount of wind that can be delivered to population centers is constrained and more storage and nuclear generation are deployed."

Under the carbon-free scenarios explored, total transmission capacity in 2035 would be as much as three times current levels, requiring up to 10,100 miles of new high-capacity lines per year, the DOE said.

'Last 10% challenge'

The study, released Aug. 30, was conducted before President Joe Biden signed the Inflation Reduction Act, a new law that includes nearly $370 billion in clean energy and climate spending. The analysis was limited to relevant federal and state policies as of October 2021, meaning it also excluded consideration of the permitting and clean energy provisions of the bipartisan infrastructure law enacted in late 2021.

Although the two laws are expected to cut emissions and increase clean energy deployment, they are unlikely to decarbonize the power grid on their own, the DOE said.

"While the longer-term implications of these new laws are more uncertain, they are unlikely to drive 100% grid decarbonization and the levels of electrification envisioned by 2035 in the primary scenarios analyzed in this report," the report said.

The study also did not model demand-side mechanisms and instead focused on supply-side infrastructure needs. Technologies currently being deployed at scale, such as wind and solar power, and advanced transmission, can achieve a 90% clean energy grid, the DOE said. But closing the remaining gap will be tough.

"A growing body of research has demonstrated that cost-effective high-renewable power systems are possible, but costs increase as systems approach 100% carbon-free electricity, also known as the 'last 10% challenge,'" the DOE said.

The report noted that most cost variation between scenarios was related to how the last 10% of demand was decarbonized.

To hit the 2035 goal, the DOE identified several key hurdles the U.S. must clear. The report urged further electrification of buildings, transportation and industrial sectors. Infrastructure development also needs to pick up, with renewable resources and storage needing to be sited and interconnected at "three to six times" current levels, while transmission capacity must double or even triple.

In addition, the U.S. must expand clean energy manufacturing and supply chains and continue the research, development, demonstration and deployment of emerging technologies, the report recommended.

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