Variable renewable energy deployment in low-emission scenarios: The role of technology cost and value

Angelo Gurgel, Bryan Mignone, Jennifer Morris, Haroon Kheshgi, Matthew Mowers, Daniel Steinberg, Howard Herzog, Sergey Paltsev

Research output: Contribution to journalArticlepeer-review

6 Scopus Citations

Abstract

While rapid deployment of variable renewable energy (VRE) technologies, namely wind and solar PV, is often projected in 2C pathways generated by integrated assessment models, there is a wide range in projected VRE deployment by mid-century. Such differences could be the result of differences in assumptions about future technology costs and/or differences in model approaches for capturing other aspects of technology competitiveness. Here we introduce a consistent competitiveness metric, profitability-adjusted levelized cost of electricity (or PLCOE), to an integrated assessment model (EPPA) to evaluate the representation of technology competition, including VRE, in low-emission scenarios. We show that representing the value of technology (alongside cost) may significantly impact VRE deployment relative to scenarios without such an adjustment. In addition, we show that varying VRE costs by about 35% in 2050 results in differences in VRE deployment that span much of the range in outcomes (over the same period) observed in likely 2C scenarios assessed by the IPCC, suggesting that both cost and value are key drivers of VRE deployment in such scenarios. Given the central role that VRE technologies play in the electricity mix across most scenarios, we also find that alternative cost assumptions for VRE technologies can lead to changes in electricity prices, the associated demand for electricity, and total final and primary energy consumption. However, the demand for fuels other than electricity is relatively insensitive to VRE assumptions in the 2C scenarios considered here.

Original languageAmerican English
Article number121119
Number of pages13
JournalApplied Energy
Volume344
DOIs
StatePublished - 2023

Bibliographical note

Publisher Copyright:
© 2023 ExxonMobil Technology and Engineering Company, National Renewable Energy Laboratory

NREL Publication Number

  • NREL/JA-6A20-82531

Keywords

  • climate change
  • computable general equilibrium model
  • decarbonization
  • power sector
  • renewable integration

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