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Integrated Energy System Analysis
# Introduction
Integrated Energy System Analysis TSC will help guide the establishment of LCRI research priorities needed to achieve specific decarbonization targets. The LCRI team will use enhanced models—with low-carbon technology cost and performance data as additional inputs—to evaluate the impact of low-carbon options on energy usage, the economy, the environment, and consumers. Multiple scenarios and sensitivities will be studied with input from LCRI sponsors and advisors, with a primary focus on net-zero economy-wide greenhouse gas emissions by 2050.
Analysis results are expected to provide insight into the tradeoffs and impacts of low-carbon technologies and pathways. LCRI stakeholders will be able to identify key areas of value for low-carbon solutions within the context of the overall integrated energy system.
The Integrated Energy System Analysis approach for LCRI includes:
Establishing detailed cost and performance data for low-carbon technologies;
Enhancing EPRI's US-REGEN energy-economy model to include AEC production, delivery, and end use; and
Conducting economy-wide deep carbon reduction scenario analyses using the detailed data and enhanced model.
# Detailed Cost and Performance Data
Because many emerging technologies and pathways are potential candidates in a future low-carbon economy, detailed cost and performance data are needed. The LCRI seeks to coordinate, gather, and facilitate development of standardized detailed cost and performance data for key technologies, including:
Hydrogen, ammonia, and synthetic fuel production;
Bioenergy feedstocks/inputs to fuel production;
Delivery infrastructure, including interactions with existing gas networks;
End-use applications of AECs; and
CO2 removal systems, including DAC.
The evaluation is expected to cover technical performance parameters, costs (including capital, operations and maintenance, and levelized cost analysis), descriptions of the technologies, and assumptions. Once the initial data are established, cost projections through 2050 will be provided for each technology, including storage and delivery costs.
The cost and performance data will be used as inputs the energy-economy model. As cost and performance data are refined over time, additional iterations and revised inputs to modeling efforts are expected. More details on LCRI cost and performance activities are provided in the Technology Cost and Performance Modeling section below.
# Enhanced Energy-Economy Model: US-REGEN
EPRI maintains an energy-economy model of the U.S. called the U.S. Regional Economy, Greenhouse Gas, and Energy (US-REGEN) Model. First developed in 2011, the model combines a detailed electric sector model with an energy end-use model disaggregated by sector and activity. This makes US-REGEN capable of modeling a wide range of environmental and energy policies in both the electric and non-electric sectors, including natural gas. More information about US-REGEN can be found at https://us-regen-docs.epri.com (opens new window).
Under the LCRI, the model is being enhanced with new features to simulate interactions of AECs and technologies within a single comprehensive analytical framework. These new features will include:
Addition of hydrogen production, storage, and conversion to end-use fuels, such as ammonia and synthetic hydrocarbons;
Addition of bioenergy feedstock supply, conversion, and potential;
Enhanced representation of fuel delivery networks, including natural gas pipelines;
Expansion of end-use technologies to include low-carbon options such as fuel cells, advanced industrial processes, and carbon capture utilization and storage; and
Addition of CO2 removal systems, both terrestrial and technological (for example, DAC).
While the application of the US-REGEN model is focused on the U.S. energy system, the insights gained on the value and applicability of low-carbon resources and technologies to decarbonization goals will be useful to other countries.
# Scenario Analyses
Using both the detailed cost and performance data as inputs, and the enhanced energy-economy model, LCRI will conduct scenario analyses to identify technologically sound and cost-effective pathways to economy-wide decarbonization. This will also help inform and guide research priorities for the LCRI. The first release, planned for 2022, will provide a national-level low-carbon scenario analysis for the U.S.
# Modeling Considerations and Assumptions
Scenario development considers both policy targets and technology availabilities/costs. Policy targets will have a primary focus on net-zero economy-wide CO2 emissions by 2050 while also taking into account energy-related CH4 emissions. Technology considerations will have different impacts on pathways to achieve specific targets. Scenario analyses are designed to inform LCRI researchers and stakeholders about the technology landscape from a holistic energy-economic perspective.
Certain assumptions may have significant impact on the model's outputs. For example, a scenario in which CCS technologies were not available could result in the deployment of other, more expensive low-carbon technologies. The modeling approach is designed to illustrate trade-offs and interactions between technologies and pathways in an equilibrium context to help showcase how and under what conditions different technologies could contribute to a least-cost economy-wide decarbonization strategy.
# Scenarios Considered
The primary scenario context for LCRI is net-zero economy-wide carbon emissions by 2050, with scenarios designed around key technology uncertainties. For the first analysis, the focus will be on a relatively small set of scenarios chosen to provide a framework to discuss the key trade-offs and interactions between technologies under consideration. Subsequent LCRI analyses will conduct more detailed sensitivity cases for particular technologies. The initial scenarios are described below.
Reference Scenario
- Uses the U.S. Energy Information Administration Annual Energy Outlook 2020 case for growth and energy service demands
- Technology cost and performance improvements, including end-use efficiency
- Existing government policies and targets are included as of 2021
Net-Zero by 2050 Scenario
- Same growth and technological change as Reference scenario
- Adds U.S. net-zero economy-wide CO2 emissions target
- Endogenous adoption of technologies and pathways to achieve target at least cost
Technology Sensitivity Scenarios
- Variations of the Net-Zero by 2050 scenario
- Costs and availability of geologic storage of carbon, which enables CO2 removal (CDR) and strongly influences least-cost pathway to achieving net-zero emissions
- Resource supply curve for bioenergy crop production, which can provide cost-effective substitutes for fossil-based end-use fuels and facilitate CDR
# Technology Cost and Performance Modeling
# Introduction
EPRI and GTI have a long history of performing technoeconomic analyses across the electric and energy system value chains. The results of these analyses are used to inform stakeholders and decision makers while also serving as vital inputs into energy system modeling tools, thereby providing fundamental insights regarding the cost and performance of policy alternatives for both the electric sector and the overall economy. The technologies being investigated under this effort are wide-ranging, as shown in Figure 26.
Within this effort LCRI will develop an integrated cost and performance assessment which will include production, transportation, storage, and delivery of low-carbon energy carriers. The development of credible and independent cost and performance estimates is a vital step in understanding the baseline of today's technology and moving beyond the current market technologies. Foundational cost and performance data will enable the identification of potential cost reductions in the future as well as the magnitude of those reductions relative to delivering low-carbon energy.
# Methodology
To deliver these learnings, LCRI will apply EPRI's Technology Assessment Guide (TAG) process, which is a highly regarded standard for developing consistent technology cost and performance estimates. Currently, the cost and performance inputs for traditional electric sector generation technologies that are used within the EPRI US-REGEN model are developed within this framework. Applying this framework to LCRI technologies will ensure a consistent basis of input for technology cost and performance data.
The TAG guidelines were introduced over 40 years ago and have been continuously updated to account for advancements and technology trends. The framework provided by TAG ensures that when developing cost and performance estimates design assumptions and cost boundaries are established consistently, creating an accurate basis for technology and scenario comparisons across all technologies. Key categories within the TAG framework include geographical and ambient conditions definitions; facility design basis; capital cost data elements, including process equipment, engineering design and construction, contingency assumptions, owner's development costs, and financing charges; cost boundaries including feedstock delivery, product offloading and storage, and process waste stream management; fixed and variable operations and maintenance; and performance and emissions data. Figure 27 provides an example of capital cost estimate framework utilized in the TAG methodology.
LCRI has brought together a wide array of stakeholders from across the low-carbon industry value chain. The collaborative nature of LCRI enables expert contributions from researchers, technology developers, end users, and other stakeholders with relevant knowledge and results in the development of reliable cost and performance data from which an accurate set of technoeconomic analyses can be established.
The Cost and Performance effort will include gathering data and inputs through engagement with market leading engineering and construction firms; academic and industry literature review; engagement with leading technology researchers; collaboration with original equipment manufacturers and technology developers; and EPRI and GTI expertise that will be combined and distilled to develop engineering cost estimates for each of the technologies being investigated. In addition to a baseline data across the various low-carbon energy value chain, LCRI will also investigate future cost reductions of low-carbon technologies. This effort includes the projection of costs of AEC production technologies through the year 2050 based upon technology learning rates for major components of the production technologies. A summary of activities is presented in Table 2.
| Activity | Expected Result | Anticipated Impact |
|---|---|---|
| Independently develop cost and performance estimates of AEC production and power generation technologies | Foundational data sets established | Independent and accurate cost and performance estimates of low- and no- carbon AEC production and power generation technologies |
| Independently develop cost and performance estimates of AEC delivery and storage infrastructure | Foundational data sets established | Independent and accurate cost and performance estimates of delivering and storing AECs |
| Independently develop cost and performance estimates of biofuels and synthetic hydrocarbons production technologies | Foundational data sets established | Independent and accurate cost of producing biofuels and synthetic hydrocarbons |
| Independently develop cost projections for future AEC production technologies | Forward looking cost curves for AEC production technologies | Increased fidelity in future planning efforts and insights into technology |
| Delivery of results | Interactive display summarizing results | Perform screening level comparisons of various low-carbon pathways |
# Current Status
The cost and performance team has completed an initial analysis of various low-carbon technologies to support the initial modeling efforts within the LCRI. Multiple efforts are underway to compile and communicate the various preliminary cost estimating results. A summary of completed preliminary cases are shown in Table 3.
| Technology | Product | Primary Feedstock(s) |
|---|---|---|
| PEM, Alkaline, and SOEC Electrolysis | Hydrogen | Water + Electricity |
| SMR with and without CCS | Hydrogen | Natural Gas |
| Ammonia Synthesis | Ammonia | Water/Hydrogen/Natural Gas |
| DAC (solvent & sorbent) | CO2 | Air + Electricity/Natural Gas |
| Hydrogen Storage: Geologic & Cryogenic | ||
| Hydrogen Transportation: Pipeline, Truck, and Ships | ||
| Ammonia Transportation | ||
| Ammonia Conversion | Hydrogen | Ammonia |
| Synthetic Fuels | CHx | Hydrogen + CO2 |
| Biomass to Fuels | CHx | Biomass |
An initial low-carbon technology cost and performance study has been completed. This study investigated 14 different low-carbon technologies including various pathways of low-carbon energy production like electrolysis, steam methane reformation with carbon capture, coal gasification with carbon capture, biomass gasification with carbon capture, and ammonia synthesis from natural gas with carbon capture. The study also included cost and performance estimates for various low-carbon energy fueled power generation technologies such as combustion turbines, reciprocating combustion engines (RICE), and fuel cells. Additionally, a second study was completed which focused on determining future cost pathways for electrolysis technologies. This study provides a breakdown of component level learning rates for PEM and alkaline electrolyzers. These component-level learning rates were paired with various electrolyzer deployment scenarios to generate a range of future cost trajectories. In addition to the technical research, a learning curve model was also developed that allows users to input their own assumptions to evaluate the impact of various factors could potentially influence future costs.
# Next Steps
Efforts are currently underway to expand and continue the development of low-carbon technology cost and performance estimates. The goal is to continually update model input data as new technology assessments are completed with the final goal being the assembly of a robust set of AEC production, conversion, transportation, storage, and delivery technoeconomic analyses that can be used to inform decision making and guide research prioritization in achieving economy-wide decarbonization. A proposed list of technologies on which cost and performance studies would be conducted under LCRI is presented in Figure 28. However, it is important to note that as new technologies emerge and potential technologies limitations are identified, this list will be continuously updated.
To develop a forward-looking view of technology cost and performance, it is vital that independent and accurate baseline cost and performance are understood. Once that is established, the LCRI team will apply learnings obtained from work performed under the initiative to identify cost effective and efficient pathways for producing and transporting AECs. Understanding cost and performance at a detailed resolution also provides an avenue to develop cost projections that identify which areas of improvement within an individual technology could result in the greatest impact. This more detailed understanding of the potential trajectories of technology cost and performance over time allows for increased modeling fidelity and a consistent basis to compare various low-carbon technologies. The ultimate goals of the Technology Cost and Performance Modeling effort under LCRI are to identify the current and projected cost and performance of each of the technologies within the initiative at a fidelity that allows for identification of key research areas for each of the technical TSCs and informs the Integrated Energy System Analysis TSC in identifying promising pathways for economy-wide decarbonization.