1. Ultra Low Carbon Electricity Systems: Intermittent (Renewables) or Baseload (Nuclear and CCS)? By: Jared Moore, Ph.D. Independent Energy Tech/Policy Advisor jared@meridianenergypolicy.com Commissioned by the Energy Innovation Reform Project 1

2. 1) For cost effective modest decarbonization goals ( 80% low carbon), less RE because generators with highest utilization generally dominant 2 How much renewable energy should be on the grid?

3. Why is deep decarbonization different? Deep decarbonization ( > 80% low carbon):  Exclusive reliance on capital intense generators increases importance of utilization  Lack of coincidence between supply and demand on seasonal and diurnal basis creates utilization challenge  Nuclear/CCUS + solar offer highest utilization 3 Dispatchable Low Carbon (DLC)

4. Seasonal Mismatch between Supply and Demand (ERCOT) Wind (left axis) Solar (left axis) Average Demand (right axis) 4

5. Utilization maximizing Wind/Solar combination to meet 80% of load: Average Demand 5 Seasonal Mismatch between Supply and Demand (ERCOT) Seasonal Oversupply: Low utilization of renewable energy Seasonal Undersupply: Low utilization of “conventional” capacity

6. Wind Solar Four Example Days in MarchFour Example Days in August 6 Resolving persistent periods of oversupply and undersupply would require seasonal utilization of storage or demand response. 1 Tesla Powerwall/home, 25% peak demand, 60 GWh, and saturates at 3 am on first day. Storage depletes at 4 am on the first day.

7. Utilization maximizing wind/solar combination no storage + 1 Powerwall/home + 2 Powerwalls/home + 6 Powerwalls/home + 3 Powerwalls/home DLC and solar no storage 7 More storage can increase utilization of low carbon energy, but then takes on problem of low utilization itself 6 th Powerwall is about an order of magnitude less effective at increasing utilization than the first.

8. Four Days in AugustFour Days in March Utilization Maximizing Combination of Low Carbon Energy: 90% DLC, 10% Solar, and 0% Wind 8 Dispatchable Low Carbon (DLC) Solar Demand

9. Cases with storage Cases without Storage 9 Renewable deployment, especially if dominated by wind, decreases utilization of future DLC generators Storage increases utilization of DLC generation

10. Which Combination of Wind, Solar, and DLC Minimizes Costs? 1)Scale wind, solar, or baseload output within an Excel-based, hourly economic dispatch model using hourly (8760) demand from ERCOT 2)Assume: – Value of reliability or Equivalent load Carrying Capability (ELCC) @ $330/MW-day – Wind LCOE @ $80/MWh, ELCC starting at 25% – Solar LCOE @ $90/MWh, ELCC starting at 50% – DLC LCOE @ $100/MWh, ELCC of 95% 10

11. 11 Wind ($80/MWh) Solar ($90/MWh) DLC ($100/MWh) Contribution of Generators Dependent on Decarbonization Desired Without Storage

12. 12 Wind ($80/MWh) Solar ($90/MWh) DLC ($100/MWh) With Storage (1 Tesla Powerwall/home) Without Storage Contribution of Generators Dependent on Decarbonization Desired

13. Policy Implications: Cost effective modest decarbonization is not necessarily the path to cost effective deep decarbonization Weak carbon price does not send adequate price signals to incent DLC generation. Instead, may create low utilization problem for these generators. Policy intervention, such as “Capacity Portfolio Standard”, may be more cost effective for deep decarbonization 13

14. Thermal inertia of earth drives diurnal and seasonal mismatch between low carbon supply and electricity demand Peak electricity demand occurs during minimum wind supply and later than peak solar supply. Peak solar supplyMinimum solar supply 14 Peak wind supply: Temperature delta between North Pole and equator is greatest