MIT Energy Initiative

Strategies for a Low-Carbon Electricity Grid with Full Use of Nuclear, Wind, and Solar Capacity to Minimize Total Costs

Published: August 2015


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The world requires economic variable electricity production to match demand by industrial, commercial, and residential customers. Historically, this has been provided by fossil fuels, where the capital costs of fossil generating plants are low relative to fuel costs, and fossil fuels are easy to store. Variable electricity production has historically been achieved by varying fuel input into fossil plants. The economic cost of operating fossil plants at part load is acceptably small because the largest cost is the cost of the fuel. In a low-carbon world with restrictions on carbon dioxide emissions, electricity would be generated by nuclear, wind and solar technologies with high capital and low operating costs. The economic cost of operating these power plants at partial load to meet variable electricity demand is large. In addition, wind and solar are non-dispatchable, where output depends upon wind and solar conditions, not electricity demand. New technologies are required to match electricity production with demand to enable full utilization of capital-intensive nuclear, wind, and solar plants to minimize the cost of electricity.

This paper examines how the electricity markets change as one transitions from electricity markets based on fossil-fuel electricity generation to electricity markets based on capital intensive nuclear, wind, and solar electricity generation. Five classes of options have been identified to address the mismatch between electricity production and demand based on their thermodynamic characteristics in terms of storing heat versus storing electricity (work). In some of these classes there are dozens of technical options, but from the perspective of the electricity grid all the options in a class can be considered as a black box with similar input and output characteristics. This classification strategy enables an understanding of the option space, helps define roles for nuclear and renewables, and enables development of a research and development pathway to a low-carbon electricity grid.

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