Third IEA-ESAP/EPRI Annual Expert Workshop: Challenges in Electricity Decarbonisation | Optimising the Path to 2050 - Event

Background

The IEA created the Electricity Security Advisory Panel (ESAP) to focus on the challenge of ensuring reliable delivery of electricity during the transition to low-carbon sources for generating power.

This workshop explored the technological and economic challenges of different pathways to 2050 decarbonisation. It raised the question, in short, what combination of technologies could meet decarbonisation objectives at the least cost? In addressing this question, the workshop sought insights from regulators, system operators, industry and academia in various OECD/non-OECD countries facing similar issues regarding electricity sector decarbonisation.

Third IEA-ESAP/EPRI Annual Expert Workshop: Challenges in Electricity Decarbonisation | Optimising the Path to 2050 - Programme and Presentations

SESSION 1 - THE FUTURE OF GAS AND COAL-FIRED POWER GENERATION

A combination of technological change and policy developments are creating financial pressures and are transforming the fossil fleet in many parts of the globe. In the US, low natural gas prices and the Clean Air Act (including the Clean Power Plan) are hastening the retirement of coal and encouraging new gas builds as well as new renewables. For example, EPA regulations require that any new coal facility employ carbon capture and sequestration. In Europe, renewable incentives and nuclear retirements have created uncertainty for fossil generators. Gas and coal plants face increasing needs to provide power to replace retiring nuclear as well as to balance renewables—but in many cases there are limited economic incentives for maintaining the fleet.

This panel explored the financial picture facing the fossil fleet in the US and Europe, expected near- and long-term retirements and builds as well as the potential for CCS.

Moderator: Tom WILSON, Senior Technical Executive for Strategic Analysis, Electric Power Research Institute (EPRI)

Panellists:

• Scott A. WEAVER, Manager, Strategic Analysis, American Electric Power | Challenges for the US Fossil Fleet
• Graham WEALE‌, Honorary Professor of Energy Economics and Politics, Ruhr-University Bochum | Challenges for the EU Fossil Fleet‌
• Alberto PONTI, Strategy and Market Analysis Department, TERNA | Are We Making the Right Investment Decisions for 2050?

SESSION 2 - AGEING NUCLEAR CAPACITY AND ITS ROLE IN DECARBONISATION

Over the next 25 years almost 40% of installed capacity is expected to close down, half of all nuclear reactors will reach the end of, their technical lifetime and around 610 GW of coal capacity will be phased out for environmental reasons, according to the World Energy Outlook Investment Report 2014. The eventual retirement of this existing fleet – in particular in countries that choose not to replace ageing nuclear facilities or accelerate their retirement schedule – will create additional demand for new low-carbon installations. What are the challenges linked to decarbonisation in consideration of this ageing fleet? What broader impacts will this have for other generation sources, as well as their subsequent integration into the grid?

Moderator: Tomi MOTOI, Economics and Investment Office, International Energy Agency (IEA)

Panellists:

• Kathleen L. BARRÓN, Senior Vice-President Regulatory and Wholesale Market Policy, Exelon Corporations | US Perspectives and Experiences
• Marco COMETTO, Nuclear Energy Agency (NEA) | Nuclear Energy in Electricity Decarbonisation: Long-Term Operation of Existing Reactors‌‌
• Jean-Pol PONCELET, Director-General, Foratom | European Perspectives and Experiences

SESSION 3 - IMPLICATIONS OF HIGH PENETRATION OF RENEWABLES FOR DECARBONISATION

There has been significant debate recently about the level of penetration of renewables, with some authors arguing that 100% reliance on renewables is feasible. However, as more variable renewable energy sources are integrated into the electricity system, the return on investment will decline, making it increasingly challenging to recover the cost of new investment. Technological advancements, such as demand response and storage, has the potential to solve this challenge—but at uncertain cost. This panel will explore high-level renewables penetration and associated economic and technological hurdles.

Moderator: David HUNTER, Senior Government Representative, Electric Power Research Institute (EPRI)

Panellists:

• Matthew NELSON, Chief of Strategic Initiatives, Office of Energy Efficiency and Renewable Energy, US Department of Energy | Renewable Scenarios for 2050 Decarbonisation
• Simon MÜLLER, Head of the Systems Integration of Renewables Unit, International Energy Agency (IEA) | Decarbonisation at High Shares of Variable Generation
• Steve BRICK, Senior Policy Adviser, Clean Air Task Force, and Senior Fellow | Implications of High Penetration of Renewables for Decarbonisation
• Laurent SCHMITT, Smart Grid Strategy Leader, General Electric (GE) | Smart Networks and Demand Response

SESSION 4 - OPTIMISING THE PATH TO 2050 DECARBONISATION

As previous panels have suggested, many technological pathways can lead to a decarbonised electric sector by 2050. However, each low-carbon approach has unique technological, economic, environmental and public acceptance challenges. Decision-making for deeply decarbonised futures requires an integrated-systems perspective given the complex trade-offs, uncertainties and interactions among the portfolio of technological options. This session addressed several question: how will, or should, this balance be reached while accounting for region- and country-specific constraints? What are the implications of pathways that do not achieve this balance? Which near-term investments enable progress towards long-term objectives and which ones create barriers towards effective and affordable solutions? What are the roles of policy, market design and innovation to facilitate this systemic transformation by 2050 in the electric sector and beyond?

Moderator: Manuel BARITAUD

Panellists:

• John BISTLINE, Technical Leader, Energy and Environment, Electric Power Research Institute (EPRI) | Finding the Optimal Path
• Carla FRISCH, Director of Climate and Environmental Analysis, US Department of Energy | The US Perspective
• Tom HOWES | The EU Perspective

This workshop, the third in the EPRI/IEA-ESAP Challenges in Electricity Decarbonisation series, explored the technological and economic challenges of different pathways to 2050 decarbonisation. It explored the question, iIn short, what combination of technologies would be able to meet decarbonisation objectives at the least cost? In addressing this question, the workshop sought insights from regulators, system operators, industry and academia in various OECD/non-OECD countries facing similar issues regarding electricity sector decarbonisation. The workshop focussed on the following areas:

• The Future of Gas, Coal and Oil Challenges in Electricity Decarbonisation
• Nuclear Outlook
• High-Level Renewables Penetration and Associated Technologies
• Finding the Optimum Pathologies

The meeting, which formed part of the IEA’s Electricity Security Advisory Panel, was informal in nature and was held under "Chatham House Rule". Each session was introduced by the Moderator and was followed by a roundtable discussion.