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A Clean Electricity Future is Affordable and Attainable—It’s Time to Act

GridLab and UC-Berkeley show that a 90 percent carbon-free US electricity grid is both reliable and lower cost

For a decade or more, even as renewables have gained market share within the US power grid, accelerated progress toward a lower-carbon grid has been held up by two dominant–but outdated–narratives.

First, utilities and others have long argued that renewables, in particular wind and solar, are costly compared to fossil fuel resources, and if adopted at scale would lead to increased customer costs. Second, grid operators have contended that wind and solar cannot contribute at scale to the reliable operation of the grid, due to their weather-dependent output.

A new study released this week, using the most up-to-date data on renewables costs and industry-standard modeling tools to assess system reliability, has thoroughly debunked both of these outdated and inaccurate narratives. In the report, researchers at the University of California-Berkeley and GridLab find that 90 percent of US electricity can be supplied by carbon-free sources (mostly new wind and solar, but also including existing hydro and nuclear) by 2035, while maintaining system reliability and decreasing consumer costs compared to today’s system.

This “2035 report” is only the latest addition to the growing mountain of evidence that clean energy is the least-cost, least-risk choice for new investment in the US grid. But the work also breaks new ground in several areas, and contributes new insights and actionable strategies for utilities, regulators, policymakers, and other stakeholders.

Three aspects of the study deserve particular attention from utilities and stakeholders planning the transition to a decarbonized grid:

 

  1. A focus on near-term opportunities avoids “missing the trees for the forest”

Much ink has been spilled in the utility industry on the feasibility of “100 percent clean” electricity grids, with 2050 being a common deadline to achieve this outcome. Such targets can be useful north stars for the industry to anchor discussion around; indeed, the latest climate science suggests a need for the global economy to reach net-zero carbon by 2050, making it imperative that the grid is as close to zero-carbon as possible.

However, the discourse concerning how to achieve a 100 percent carbon-free grid, and in many cases the debate around if it is even possible, has taken attention away from the opportunity at hand and the urgent climate imperative: to move as quickly as practical towards ever-higher levels of carbon-free electricity. In other words, the ongoing debates on net-zero carbon pathways have, in many cases, missed the trees for the forest.

The 2035 report avoids that trap. The authors still acknowledge the uncertainty around technology development through 2050, load growth due to electrification, and other possible confounding factors that may appear 15 years from now that are important for reaching a 100 percent clean grid. But by focusing on what is certainly possible in the next 15 years, not what is hypothetically feasible three decades from now, this study shows it practical and economic to eliminate the lion’s share of electricity emissions quickly.

 

  1. Industry-standard modeling tools and benchmark data sources

Utilities often criticize 3rd party studies of future grid evolution, claiming that they use less rigorous, non-utility modeling software. On the other hand, stakeholders often criticize utility-sponsored planning because it often uses out-of-date clean energy cost assumptions inconsistent with actual project costs today.

The 2035 report avoids both pitfalls. GridLab and UC Berkeley use PLEXOS, an industry-standard grid simulation model widely deployed by utilities, researchers, and system operators around the world, to simulate a 90 percent clean grid. Further, they run this hourly simulation across multiple years of historical data to capture renewable and load variability and ensure that a 90 percent carbon-free portfolio is reliably able to meet load across different weather conditions.

The authors also use the US Department of Energy-sponsored Annual Technology Baseline, which has emerged as the benchmark source for current and future projections of electricity resource costs, including wind and solar. This corrects a major issue with many utility-led studies that often fail to account for actual wind, solar, and storage cost declines.

 

  1. A clear, practical, and affordable roadmap for implementation

The 2035 report starts deliberately from the constraints imposed by today’s US electricity grid, and accounts directly for the steel currently in the ground in arriving at an investment pathway to support a 90 percent clean electricity future by 2035.

The study, and a companion article from Energy Innovation that lays out a policy roadmap to support a 90 percent decarbonized grid, tackles head-on many of the pressing questions facing utility planners, regulators, and policymakers as they grapple with the practicalities of the utility industry’s ongoing energy transition:

  • New gas power plants: The 2035 report, echoing analysis from Rocky Mountain Institute and others, finds strong evidence that new gas-fired power investments are not justified in the near or long term; instead, utilities and grid operators can leverage the sizable fleet of existing gas power plants to provide “backup” power for when renewables’ output is low.
  • Coal retirement: The 2035 report and its accompanying policy brief lay out a clear pathway for minimizing costs associated with existing coal plants, including both their current operations expenses (generally higher than new wind and solar project costs) as well as the minimal “stranded” costs that may remain in 2035 after most operating coal plants have been depreciated on their owners’ balance sheets. Securitization and other tools allow net-positive financial outcomes for consumers and utilities as coal plants retire, while supporting workers and communities currently dependent on coal plants and mines.
  • Transmission expansion: Due to the high level of wind and solar development required to cost-effectively reach 90 percent clean energy by 2035, the study finds that over $100 billion in new transmission investment is justified to help deliver those low-cost renewables to US homes and businesses. That total investment, spread over the 15-year study period, would add only 1-2 percent to current US electricity rates, while enabling a diverse and low-cost supply mix for decades to come.

In short, the Berkeley/GridLab report represents a distinctive new chapter in the evolving discourse playing out around the country regarding the future of the US electricity system. The study will likely be an important benchmark against which individual utilities’ investments are evaluated for compatibility with least-cost and feasible decarbonization outcomes.

Investors, utilities, regulators, and policymakers should take advantage of the wealth of insight and information contained within this body of work, and plan accordingly for their own role in accelerating the decarbonization of the US power grid.