Firm low-carbon energy resources

On the origins of the paper:

Nestor Sepulveda: I was doing a Master’s in Nuclear Science and Engineering here at MIT in the Technology and Policy Program, something that Jesse and I share in our backgrounds. I had this question. Actually, one of my professors, we were talking about how you decarbonize power systems, and we were wondering how you actually determine what will be the most beneficial way of doing it. The way that will maximize social welfare. That’s how I ended up building on this for my Master’s thesis. And then, at some point, after I was done, Jesse and I were talking about the findings and we decided to move this forward, improve the experimental design, take a closer look at the assumptions that I was making, and we came up with this topic.

Jesse JenkiNS: What really drew me to Nestor’s findings and to the idea of expanding it into a broader paper, was that he was exploring the potential role of nuclear power amongst the overall low-carbon mix. And this is at a time when we only had four nuclear power plants under construction in the United States, and they were facing setback after setback and cost overruns. And at a time when wind and solar were getting increasingly cheap and competitive. Despite that, across the wide range of different tests that Nestor ran, he kept seeing nuclear energy show up in the final mix. That raised, for me, a question of, what’s going on here? Is this specific technology something that’s essential? Or is nuclear an example of a broader class of low-carbon energy resources that we might need to get to a zero-carbon grid, and to complement wind, solar, and batteries, like lithium-ion batteries. So we designed a broader experiment and worked on it together to really look at the role of what eventually we dubbed “firm low-carbon energy resources.”

On the definition of firm low-carbon energy resources:

JJ: Firm resources, which is really the focus of this paper, are technologies that can supply electricity reliably, on demand, and sustain that output for weeks or months at a time. These are really the reliable backbone of an electricity system. In today’s power system, that role is filled primarily by fossil fuels, by coal and natural gas-fired powered power plants. In a zero-carbon power system, the challenge is to replace those technologies with other firm resources that can supply that reliability and pair with variable renewable resources like wind and solar, with energy storage, demand-side flexibility, and other resources. But to do so without CO₂ emissions. That includes technologies like nuclear power, carbon capture and storage, which could enable us to continue using fossil fuels but capture and permanently store the CO₂ emissions. And potentially biomass, if we can harvest it at a sustainable scale or in a sustainable manner. And also other technologies that are at an earlier stage, like engineered geothermal energy systems, which would be a way to tap into hot rocks deep below the earth and harness that energy to produce steam and electricity across a wider area of the world.

On the role of other energy resources:

JJ: In our paper we present a new taxonomy to think about the role of different resources in the electricity system, in a low-carbon context, especially. Those three categories are, first, the firm low-carbon resources that we just talked about, which provide reliability and can reliably meet electricity demand at different times of the year. Then we have fuel-saving variable renewable resources, like wind and solar energy, which are variable throughout different time scales, from hours to days to seasons. But when they are available, they’re very affordable, and can help displace the use of other resources that consume fuel at a higher cost. So we dubbed them “fuel-saving resources,” because they help back off or reduce the consumption of fuels and other variable costs associated with those other resources in the mix. The final category is what we call “fast-burst resources.” These are technologies like energy storage batteries, demand flexibility, so moving around our consumption in time, or reduction of demand or demand response or curtailment when prices go very high, we might want to consume less in those periods for short periods of time. All those technologies are very well-suited to providing fast or quick bursts of power, but not sustaining them over a long period of time. They provide high-value flexibility at the times that it’s most important and most valuable, but we can’t rely on them to sustain that output over long periods of time. That’s a role best suited for firm resources.

NS: One of our findings in the paper is that we see that these three different resources play a very distinct role in the mix. One of the most important findings of the paper is that even if you might be able to fulfill demand, and subject to constraining emissions, without one of these particular type of resources, the cost and uncertainty faced in order to get to that point is going to go higher. It would be like trying to play soccer with just a goalkeeper and the defenses without the midfielders. Why would you do that if you have this particular set of people or participants that are trained? They know how to play their role.

On policy support:

NS: We see today a lot of support, but this support is usually designed to be technology-specific. What we need today is a set of policy support measures that go for zero-carbon technologies. Because we might analyze some technologies, but we don’t know what we don’t know. It might be that if you implement something that is aiming for zero-carbon, some other technology that we haven’t even spoken about will come up.

JJ: That’s one of the reasons that we focused so extensively on uncertainty analysis in this paper. We model almost 1,000 different combinations of technology assumptions, about what their cost or availability, and combinations thereof. […] What we find is that the things that are robust are the sort of role of individual categories of resources, but not individual technologies. […] We really need to think about, as Nestor said, focusing on ends, not means. Focusing on the class of resources within the power system, or the midfielders and defenders and strikers on your team, rather than really focusing solely on means or specific technologies.

On the misconceptions about firm low-carbon energy resources:

JJ: I think one of the main misconceptions, which is what we’re trying to address, largely, with this paper, is that firm low-carbon resources are optional. That they can be substituted for by a combination of increasingly cheap wind, solar, and batteries. I think those of us who follow the energy or electricity space have probably read a dozen headlines in the last few years about how cheap batteries are the holy grail for variable renewable resources for wind and solar. If we can store the energy from wind and solar, then the variability doesn’t really matter anymore and we can rely on these resources to play a dominant role in the electricity mix, and therefore don’t need to tackle the challenges associated with trying to scale up nuclear or geothermal or biomass or carbon capture. What we show in the paper is that they’re really not substitutes. That wind and solar, as fuel-saving resources, and energy storage as a fast-burst resource, they’re weak substitutes at best for firm resources.

NS: Most people think that storage will solve our problems, or that demand flexibility will solve our problems. They tend to think about that in terms of getting rid of low-carbon firm resources. But, in reality, what happens is, if I can make the system operate better, more efficiently, with demand flexibility or storage, I can do the same with firm resources. Our results show that it’s not that you get some value from demand flexibility or storage only when firm resources are not there. You get value out of them when firm resources are there as well. In some cases, you might get even more value than if you only have solar, wind, and storage.

On the paper’s takeaways:

JJ: I think that the main message is that wind and solar and battery storage are making dramatic progress, and that is going to fuel a lot of the decarbonization we see in the power grid over the next decade or so. But to complete the and get all the way to a zero-carbon grid, and to do so affordably, we need to round out the rest of the team with firm low-carbon energy resources like nuclear, carbon capture, biomass, or geothermal energy as well. These are all complementary technologies.

NS: Climate change is a very, very complex issue, but it’s not the only one. If we could get there with a higher certainty and cheaper cost, or lower cost, then we will have some extra resources to address some other of mankind’s problems. I think that is important. Because sometimes we forget about the big picture. Climate change, again, is a very important, very complex issue, but we have so many others. Some people in this world, they don’t have healthcare access, they don’t have education, they don’t have water. If we can save that dollar to spend on one of those other problems, I think that’s worth it.