Cutting gas-powered generation, carbon tax are keys to net-zero in the US by 2050: NAS

A new report by the National Academy of Sciences (NAS) mapping a path to net-zero US carbon emissions by 2050 calls for "modest reductions" in natural gas-fired generation additions and a US power plant fleet that is 75% fossil free by 2030 while also warning that policies that achieve only incremental emis­sions reductions could make deep decarbon­ization by mid-century "unattainable."

The report released this week, Accelerating Decarbonization of the US Energy System, also says the nation must increase overall electrical transmission capacity by approximately 40% by 2030 to bring low-cost wind and solar to load centers, and aim for 50% of new vehicle sales across all classes to be zero-emission vehicles within 10 years.

And in an equally ambitious energy efficiency goal, the panel of 17 scientists and energy experts who issued the study said total energy use by new buildings should be reduced by 50% by 2030, and that 20% or more of fossil fuel-burning furnaces should be replaced with electric heat pumps. The report also called for policies requiring all new construction to be electric except in the coldest climate zones.

To spur investment and innovation, NAS said the government should set a cumulative, economy-wide greenhouse gas (GHG) emissions budget, with separate benchmarks for all sectors, such as industry, buildings, transportation, electricity, and agriculture. "A national emissions budget provides an unambiguous metric to assess whether policies are on track [for 2050 net zero]," according to the report.

The government should impose an economy-wide price on carbon emissions, starting at $40/metric ton and increasing by 5% annually. This idea has been promoted by a range of major US companies, former government officials, leaders in academia, and environmental groups. The industry-led Climate Leadership Council is one of the more prominent advocate groups for a national carbon tax, complemented with a rebate system.

NAS said that a carbon tax would "unlock innovation in every corner of the energy economy, send appropriate signals to myriad public and private decision makers, and encourage a cost-effective route to net zero."

Mirroring Biden plan

The report is especially interesting and timely because—while initiated in mid-2019—its recommendations mirror many of the key policies being pursued by President Joe Biden to reach his goals of a fossil-free electric grid by 2035 and net-zero economy by 2050.

Most notably, the report echoes Biden's contention that bold, near-term action is needed to cut emissions. It warns that failure to move quickly on the deployment of new clean energy technology could effectively lock the country into energy systems that will not achieve sufficient emissions reductions.

"A net-zero emissions economy is very different from an economy with more modest carbon reduction," the study says.

Along those lines, the study says the nation's approximately 250 remain­ing coal plants must close by 2030, and solar and wind resources must meet half of the nation's electricity needs a decade from now.

On the increasingly contentious issue of gas-fired generation, the NAS study appears to straddle the political divide. While envi­ronmentalists are campaigning against production and combustion of natural gas as a growing source of GHGs, utilities say retaining some dispatchable gas plants is vital to reliability—that is, to ensure delivery when renewable power is inadequate at certain time of the day, in certain seasons, or weather conditions.

The NAS report appears to largely back the utilities' position, though it says gas plants must be run less. "Existing natural gas capacity may be maintained through 2050 to provide firm capacity, if operated much less frequently and if hydrogen is blended with—or replaces—natural gas to fuel these plants when they do operate to reduce (or elimi­nate) carbon emissions intensity," the report says, while adding that this will require the addition of another firm resource like nuclear or geothermal energy to balance intermittent renewable sources.

Utilities also argue that a crash program to replace existing gas plants with renewables would be too costly for ratepayers. Again, NAS provides some support for that argument, saying that early retire­ment of gas plants and other existing infra­structure would result in too many stranded costs for ratepayers.

"A transition to net zero is far cheaper if long-lived components are allowed to reach the end of their useful lives before being replaced by non-emitting alternatives, and studies have found that a 30-year horizon for a net-zero transition leverages the normal pace of asset replacement and avoids significant premature retirement of existing assets," NAS wrote.

The study also acknowledged that its rec­ommendation for a 40% expansion of transmission lines, or by 120,000 "gigawatt miles," by 2030 would be hugely expen­sive. It said the price tag would come to an estimated $356 billion over the next decade. And by 2050, such high-voltage transmission capacity may need to triple as power demand grows and geographically remote renewable energy facilities become the dominant power sources for the grid.

The study also said that, given the long time it normally takes to site and permit new transmission lines, policy reforms will be needed to make the process more efficient. It proposed amendments to both the Federal Power Act and Energy Policy Act of 2005, as well as the establishment of a new national transmission policy that would support national and state efforts to reduce emissions from the power sector.

Auto sector changes

On motor vehicles—now the nation's larg­est source of carbon emissions (because of electric power and renewables replacing much of the nation's coal-fired power)—the study says that by 2030, half of all new vehicle sales, including heavy-duty trucks, should run on electric batteries, which means 15% of the on-road fleet would consist of electric vehicles (EVs).

With EVs only making up 2% of new vehicle sales in 2020 and just 2% of all cars now on the road, that's an aggres­sive goal. But California, Massachusetts, and New York have pledged to end sales of gasoline-powered cars by 2035, and General Motors announced last week it will produce only light-duty EVs by then.

Still, even with electric vehicles expected to reach price parity with gasoline cars by 2025, broad adoption will not occur without a major build-out of charging infrastructure, the report said.

By 2030, the nation needs up to 3 mil­lion new regular AC chargers and at least 100,000 DC fast chargers, the study says. Biden has pledged to install 500,000 new chargers nationwide by 2030.

Energy storage

Another huge piece of the net-zero puzzle is energy storage. No less than 60 GW of storage capacity is needed by 2030, NAS estimated.

The US market for utility-scale storage reached just 2.3 GW in 2020, but is expected to reach nearly 48 GW by 2030, accord­ing to IHS Markit. That would still leave a significant gap to where the NAS experts say the nation must reach over the next decade, although forecasts can change.

"If battery cost declines continue to beat our expectations and renewable additions build on their current momentum, then our outlook could increase," noted Sam Hun­tington, a director at IHS Markit.

Other recommendations

The report makes other recommendations that also would fit comfortably into the Biden administration's playbook:

• Promoting equity and inclusion. "Policies should work to eliminate inequities in the current energy system that disadvantage historically marginalized and low-income populations," it said. "For example, the US should increase funds for low-income households for home electrification and weatherization and for broadband Internet access for low-income and rural areas, and increase electrification of tribal lands."
• Providing transitional funding. "Policies should promote fair access to new long-term employment opportunities and provide financial and other support to communities that might otherwise be harmed by the transition," it said, as it recommends three national task forces to study employment, training, and related issues.

Overall, putting the United States, the world's second-largest carbon polluter, on a path to net-zero emissions by 2050 will cost about $2 trillion in capital investments over the next 30 years, the report estimates. But it stressed that most of that cost will be offset by lower operating expenses because of lower fuel costs and increased efficiency.

"Taking into account the extensive savings from new technology deployment," it notes, "estimates of the net cost for the energy transi­tion during the 2020s are on the order of $100-$300 billion rather than trillions of dollars."

Includes reporting by Jeremy Rakes, OPIS.