Decarbonization Roadmap for the Midcontinent

Written by: Doug Scott, Vice President, Strategic Initiatives, Great Plains Institute and former Chair & Commissioner, Illinois Commerce Commission

Chairman Scott

Doug Scott

By 2050, the midcontinent region of the United States could achieve substantial decarbonization of the electric generation sector through a number of pathways, utilizing existing technologies. That is just one of the key findings of “A Roadmap to Decarbonization in the Midcontinent”, which was released July 24 by the Midcontinent Power Sector Collaborative (Collaborative).

The Collaborative is a diverse group of stakeholders located in the 15 states that comprise the footprint of the Midcontinent Independent System Operator (MISO). The group includes investor-owned utilities (IOU), merchant power producers, power cooperatives, public power, environmental organizations and observing state officials, and is staffed by the Great Plains Institute. The region includes all or part of the following states: Arkansas, Illinois, Indiana, Iowa, Kentucky, Louisiana, Michigan, Minnesota, Mississippi, Missouri, Montana, North Dakota, South Dakota, Texas and Wisconsin.

Participants in the Collaborative, which has been meeting since 2012, believe that the electricity sector will substantially decarbonize by mid-century, due to a number of factors. Consider all of the changes that are occurring in the sector that are leading to a more decarbonized system: lower natural gas and renewable costs; consumer demand for energy efficiency and renewables; investor demand for lower carbon risk; an aging infrastructure which allows for replacement of generation; flat or declining energy demand; and technology that is driving many of the changes. Collaborative members also believe that it is likely that future government policy will require decarbonization.

Against this backdrop, Collaborative participants utilized modeling to demonstrate various pathways to 80 percent and 95 percent decarbonization of the electricity sector by 2050. The goal is to help inform public policy, as stakeholders and policy makers are working to establish their energy futures.

In addition to identifying various pathways to decarbonization by 2050, the roadmap had a number of other key findings. Some of those findings are:

  • Because electrification is likely to play a huge role for transportation and buildings, decarbonization of the electric sector is essential.
  • The region will need to utilize a variety of very low or zero-carbon resources to achieve decarbonization, including natural gas with carbon capture, renewable energy and energy efficiency.
  • It will be necessary to explore in future phases of the roadmap the role that energy efficiency can play in decarbonization, as well as the role that can be played by flexible demand and other distributed energy resources.
  • The region must step up its deployment of renewables to be on a path to decarbonization, but it is not universally agreed upon how much wind and solar resources can be added and remain cost-effective.
  • Investment in research, development and deployment of new zero or low-emission technologies (such as energy storage, new nuclear plants and carbon capture) will be necessary.
  • Waiting to take carbon risk into account may have consequences, including larger costs in later years.
  • There are unique characteristics to the midcontinent region, including the existing large amounts of wind on the system, its current complimentary nature with other generation sources.
  • Transmission plays an important role to lower the overall cost of decarbonization.

While Collaborative participants did not reach agreement on all aspects of the research, the report does contain a number of consensus principles for policy makers and regulators, that the group hopes may be utilized by stakeholders and public officials as they make decision on the future of electricity generation in the midcontinent. Among those consensus principles are the following:

  1. Invest in all cost-effective energy efficiency.
  2. Invest in cost-effective renewable energy.
  3. Very low and zero-carbon resources that are dispatchable and flexible to follow load will be essential on the system.
  4. Preserve existing nuclear power to the extent it makes technical, economic and environmental sense.
  5. Investments in carbon-emitting resources should be evaluated against the genuine risk that substantial decarbonization of the sector will be required by mid-century.
  6. Step changes are not foreseeable, and energy and carbon policies must be flexible enough to accommodate those changes.
  7. Flexible, market-based approaches to reducing carbon emissions have advantages because they do not pick winners among different technology types and allow the market to find the lowest cost solutions. But because there are drawbacks to the flexibility of a market=based policy, policies that support the development of a broader mix of technologies is prudent.
  8. Targeted incentives to spur research, development and deployment of key low-or-zero-carbon technologies will be important just as tax incentives for renewables have been effective at lowering the cost of those technologies.
  9. Wholesale electricity market structures should evolve to value attributes that contribute to a lower-carbon grid.

The Collaborative will continue its work, next addressing the potential impact of electrification of the transportation and building sectors. The group is hopeful that the Roadmap and its future additions will provide a useful resource as policy makers continue to address the rapidly-changing world of power generation, and make the best decisions they can for their residents.

The full roadmap may be found at roadmap.betterenergy.org.

 

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