RENEWABLES AND GAS POWER CAN RAPIDLY CHANGE THE TRAJECTORY ON CLIMATE CHANGE - ACCELERATED GROWTH OF
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ACCELERATED GROWTH OF RENEWABLES AND GAS POWER CAN RAPIDLY CHANGE THE TRAJECTORY ON CLIMATE CHANGE To read more about GE’s view on climate change visit: www.ge.com/power/future-of-energy
INTRODUCTION
Addressing GE also believes that
decarbonization actions will
climate change be determined locally, based
on resource availability, policy, GE believes that
must be an urgent current infrastructure, and the accelerated and
global priority, demand for power. There are many strategic deployment of
regions in which gas power can be a key renewables and gas power
requiring global enabler to further renewables penetration,
specifically in regions with high current gas
can change the trajectory
action, national capacity and/or substantial dependence
on coal. In those regions, gas power can
for climate change
commitments, and serve as a backbone for greater renewables
penetration and accelerate the retirement of
consistent policy coal assets, both of which will have significant
positive impact on overall emissions.
and regulatory New sources of abundant and
Renewables are the fastest affordable natural gas have
frameworks. growing source of new power driven the economic shift of
generation capacity and coal-to-gas switching in several
Too often, the dialog around climate change
can be mired in defining and debating an electricity. This dramatic growth regions. With less than half the
ideal future state and the timeline by which has been propelled by a combination of CO2 of coal generation, natural
factors including public awareness about
society would achieve that end-state. In gas is contributing significantly
the meantime, insufficient global progress climate change, steep cost declines,
advances in wind and solar technologies, to decarbonization in these
is being made with each passing day.
Paraphrasing an old adage, “Perfection and favorable policies that incentivize regions. Yet globally, coal still accounts
investment in renewable technologies. for nearly 40 percent of electricity generated
is the enemy of progress.”
Yet despite the progress, today wind and and it is expected to remain the largest
Decarbonization* of the power sector solar together account for just 8 percent single source of electricity generation for
and electrification of energy-use sectors of global electricity generation and with decades to come unless significant changes
(e.g., transportation, industry and heat) all renewables considered (predominantly in the power sector fuel mix occur.
as quickly as possible will have the most hydropower) it grows to nearly 27 percent.1
substantial impact on global carbon Viewed separately, renewables and
emissions. Based on our extensive To put the challenge of relying solely on gas generation technologies each have
analysis and unique experience across the increased deployment of wind and solar PV merits and challenges as a means to
breadth of the global power industry, to combat climate change into perspective, address climate change and optimum
in the International Energy Agency’s (IEA) solutions will differ regionally. Such
GE believes that accelerated Stated Policies Scenario, their reference solutions will depend upon factors such
and strategic deployment of scenario, wind and solar account for nearly as fuel availability and security, land use
renewables and gas power 75 percent of global net capacity additions constraints, renewable resource availability,
can change the trajectory between now and 2040. This results in more and the emphasis a particular region is
than a 3X increase in wind, and 6X increase placing on climate change. Together, their
for climate change, enabling in solar installed capacity. Despite the rapid complementary nature offers tremendous
substantive reductions in growth and significant investment in wind potential to address climate change with
emissions quickly, while in and solar PV postulated in this scenario, the speed and scale the world requires.
parallel continuing to advance their combined generation contribution only Key attributes of these technologies are
increases to 28 percent of the global total in summarized on the following page.
the technologies for low or near 2040 and they are roughly on par with coal at
zero-carbon power generation. 22 percent and gas power at 21 percent.2
*Decarbonization in this paper is intended to mean the reduction
of carbon emissions on a kilogram per megawatt hour basis.
Accelerated Growth of Renewables and Gas Power Can Rapidly Change the Trajectory on Climate Change 2
INTRODUCTION
T A B L E 1 : The complementary attributes of renewables and gas power
WIND, SOLAR & STORAGE GAS POWER
Flexible, dispatchable power whenever needed,
FUEL Limitless, free fuel that is variable
utilizing abundant & affordable natural gas or LNG
Less than half the CO2 of coal generation
with a pathway to future conversion to low
CO2 Carbon-free generation
or near-zero carbon with hydrogen and
Carbon Capture and Sequestration (CCS)
Competitive Levelized Cost of Electricity (LCOE) Competitive LCOE with lowest CAPEX,
COST
with no lifecycle uncertainty (mostly CAPEX) providing affordable, dependable capacity
Dispatches first in merit order… Most affordable dispatchable technology…
DISPATCH
extremely low variable cost fills supply/demand gap
Battery storage economical for short duration Gas economical for longer-duration peaking needs
PEAKING
peaking needs (90% capacity factors when needed,
FACTORS (wind and solar often complementary) runs less based on variable costs & renewables
Utilizes abundant land with good renewable
Very small physical footprint for dense
LAND resources (multi-purpose land use);
urban areas with space constraints
Offshore wind is not land constrained
HYBRID Extends renewable energy to Carbon-free spinning reserve peaking plants
SOLUTIONS align with peak demand using onsite battery storage
Technologies other than wind, solar, not an either/or We have been a key player
battery storage and gas will contribute proposition in the power industry
Attributes of
as well to the longer-term power mix, but between
renewables and gas since its inception and
the focus of this whitepaper renewables
and natural power are complementary, have a suite of complementary
is to elevate the emphasis on making them a powerful renewable, gas-fired, nuclear,
gas, but
renewables and gas power as combination to address grid and digital technologies
rather a
climate change needed for the transformation
an urgently needed solution multi-pronged
to a decarbonized energy
to change the near-term approach to
future. This industry experience
decarbonization
trajectory on climate change. coupled with technological know-
with renewables
how enables GE to help policy makers
and natural gas power
The power industry has a responsibility, and to make effective decisions that deliver
at its core. GE as a company is
the technical capability to take significant the desired decarbonization results while
uniquely positioned to play a role through
steps to quickly reduce greenhouse gas avoiding unintended consequences.
its scale, breadth, and technological depth.
emissions and help address climate change
at scale. The solution for the power sector is
Accelerated Growth of Renewables and Gas Power Can Rapidly Change the Trajectory on Climate Change 3
FRAMING THE CLIMATE Emission reductions are needed across Continuing these energy efficiency efforts
CHALLENGE all sectors, but the power sector can will help to reduce the need for additional
and should make whatever reductions generation across the power sector.
There is broad scientific consensus that the it can by deploying as much renewables The “Future is Electric” scenario from the
concentration of CO2 in the atmosphere is as possible supported by a combination IEA’s 2018 World Energy Outlook4 postulates
increasing, that the increase is due primarily of coal-to-gas switching, deployment of that widespread deployment of currently
to anthropogenic (man-made) sources, and new gas-fired power plants and efficiency available technologies could take the
that the higher concentration is causing an upgrades to existing gas-fired plants. proportion of electricity in final energy use
increase in global average temperatures. from 19 percent to a maximum technical
Although other greenhouse gases (GHGs) Another method for reducing power sector potential of around 65 percent. This would
including methane, nitrous oxide, and emissions is through reduced electricity happen, for example, if heat pumps become
fluorinated gases are also contributing to consumption. Demand-side energy efficiency widespread in industry and buildings, if
the increase in global temperatures, CO2 is is sometimes called the first fuel, or the fuel electric vehicles (EVs) become the vehicle of
the largest single contributor, accounting for you don’t need to use, and is often expressed choice, if induction stoves become the sole
more than 75 percent of all GHGs. in terms of electrical intensity. This metric choice for cooking, and so on. The potential
is defined as the amount of electricity for higher electrification therefore is very
consumed per unit of gross domestic product large, even though around 35 percent of final
THE POWER INDUSTRY
(GDP), and it has been on a steady global consumption would still require other energy
CAN’T DO IT ALONE: CROSS
decline for several decades due to things such sources, including most shipping, aviation
SECTOR SOLUTIONS NEEDED
as more efficient home appliances, LED light and certain industrial processes.
bulbs, and energy conservation measures.
Forty one percent (13.7 Electrification by itself will not deliver on
Gigatonnes or Gt) of the sustainability goals. Although switching from
global CO2 emissions from fuel combustion of fuels to electricity has clear
combustion are attributable CO2 Emissions by Sector environmental advantages at the point of
use due to reduced emissions of local air
to the electricity and heat (33.7 Gt Total)
pollutants, the overall environmental impact
production sector. This is followed by needs to be considered at the system level.
the industry and transport sectors, with 26 Simply shifting from tailpipe
percent and 25 percent respectively.3 See
9%
Figure 1. Although there has been significant
emissions from an internal
attention, and some progress addressing combustion engine to smokestack
41%
CO2 emissions in the power sector, there has 25% emissions from a coal power
not been as much focus or progress in other plant providing electricity to an
sectors. As an example of non-power sector
initiatives, GE supports the aviation industry’s
EV does not necessarily reduce,
plan to achieve a net reduction in aviation and in some locations could
CO2 emissions of 50 percent by 2050, relative 26% increase, system CO2 emissions.
to 2005 levels. GE invests $1 billion annually For electrification to be most effective at
to accelerate technology innovations needed reducing CO2 emissions there needs to be
to drive reduction in carbon emissions that Power Transport a concurrent shift in the makeup of the
help make flying increasingly sustainable. Industry Buildings fuel sources of the power sector such as
coal-to-gas switching immediately and
If power sector CO2 emissions continuing the pursuit of low or zero-carbon
sources. This concurrent shift, combined
could somehow be brought F I G U R E 1 : The power sector
with electrification, would then enable
immediately to zero—an produces the largest amount of CO2
significant reductions across the largest CO2
impossibility—that would not emissions, but all sectors need to
emitting sectors of the economy, namely
address CO2 emissions.
realize the COP 21 Paris Agreement power, transportation, and industry.
goal of keeping the global average
temperature increase to less than 2ºC.
Accelerated Growth of Renewables and Gas Power Can Rapidly Change the Trajectory on Climate Change 4
AFFORDABLE, RELIABLE and the power density of gas power makes
AND SUSTAINABLE ENERGY it well suited to providing power at scale, in
IS A BASIC HUMAN RIGHT close proximity to demand. As people join
Energy Trilemma the middle class, they purchase more energy
Access to affordable, reliable, and sustainable ELECTRICITY GENERATION, intensive products such as air conditioners,
energy is critical to growing economies and refrigerators and other home appliances,
is fundamental to the quality of life in the
DELIVERY & CONSUMPTION
thereby increasing electricity demand. The IEA
modern world. According to the IEA, roughly projects that total electricity demand will rise
770 million people lack access to reliable globally by nearly 50 percent through 2040.7
electricity, and more than 2.6 billion do not
have access to clean cooking fuel, relying The most effective way to ensure
primarily on biomass (wood, charcoal, dung,
etc.). Universal access to modern energy by
power system reliability and
2030, including electricity and clean cooking, energy security is through a mix of
AFFORDABLE
is one of the key pillars of the United Nations’ generation sources. No single form of
Sustainable Development Agenda (SDG 7).5 power generation is optimal in every situation
See Figure 2. or economy. For example: wind and solar
are variable but consume no fuel and emit
In addition to the challenge of addressing no CO2; natural gas-fueled generation emits
basic energy access, the global middle RELIABLE SUSTAINABLE CO2 but is dispatchable (i.e., has output that
class is now more than half of the world’s can be readily controlled between maximum
total population—more than doubling since rated capacity or decreased to zero) to help
2010—and is expected to reach 5.3 billion F I G U R E 2 : The energy trilemma balance supply and demand; hydro power
by 2030. Most of this growth is expected to is the challenge of providing affordable, often requires dedicating significant amounts
occur in Asia.6 The continent has some of the reliable and sustainable energy. of land area but is zero-carbon, renewable
most densely populated cities in the world, and dispatchable, and can provide long-term,
low-cost energy storage.
A mix of
generation sources
is the most effective
way to provide system
reliability and
energy security
Accelerated Growth of Renewables and Gas Power Can Rapidly Change the Trajectory on Climate Change 5
THE AGE OF RENEWABLES
Renewable power is carbon-free, uses an energy. In some locations with abundant Global installed capacity of
infinite supply of free fuel that is not subject wind and solar resources, renewable renewables has grown from
to price fluctuations, and produces very low technologies have become cost-advantaged
cost electricity. These attributes make the relative to thermal power generation on an approximately 1 GW of solar PV
deployment of renewables the core element LCOE basis. The biggest perceived drawback and 17 GW of wind in 2000 to
in combatting climate change, leading to of wind and solar, the fact that they are approximately 650 GW of each
tremendous growth in capacity additions variable, is mitigated by the fact that with
today.8 2019 was an unprecedented
since the turn of the century—especially in modern weather forecasting methods they
year for global renewable capacity orders,
wind and solar PV. This explosive growth are largely predictable.
eclipsing the 200 GW mark for the first
has been driven primarily by reductions in time.9 The cumulative effect of nearly two
cost, technology advancements to improve decades of renewables orders growth
capacity factors, favorable policies and resulted in 27 percent of global electricity
positive public sentiment around zero-carbon
Despite supply coming from renewable sources in
2019.10 This growth is expected to continue
massive renewables
investment, coal
generation is down only
~10% and gas generation
CAPACITY ADDITIONS is up ~33% through
2040. ~40,100 TWh
FORECAST AND
RESULTING GENERATION
EVOLUTION
~5,900 GW
Other
47% Renewables
28% Wind + Solar
~26,900 TWh
27% Renewables
Solar 8% Wind + Solar
85% Renewables
74% Wind + Solar
23% 21%
Gas Gas
Wind
Hydro 37% 22%
Nuclear Coal Coal
Gas
Oil
Coal 2019 2040
Net Capacity Additions
Electricity Generation
2019–2040
F I G U R E 3 : Net capacity additions and resulting change in electricity generation 2019 to 2040...despite aggressive
renewables net additions, they are insufficient to result in a meaningful reduction in absolute global coal generation by 2040.
Source: IEA World Energy Outlook 2020 Stated Policies Scenario
Accelerated Growth of Renewables and Gas Power Can Rapidly Change the Trajectory on Climate Change 6
LCOE reductions
The cost drivers behind the rapid growth at up to 35 percent capacity factor and new
in wind and solar are in renewables deployment are expected to offshore wind farms at up to 55 percent
expected to continue, continue. Figure 4 demonstrates how the capacity factor.13
driven by lower LCOE of onshore wind and utility scale solar
CAPEX and improved PV are expected to continue to drop between Offshore wind energy holds the promise of
2020 and 2040. As examples, the LCOE for significant environmental and economic
capacity factors onshore wind in Brazil is expected to drop benefits. It is an abundant, low-carbon energy
31 percent during this period and solar PV resource located close to major coastal
in Germany is expected to drop 50 percent. load centers, and in many cases provides an
In fact, the average reduction in onshore alternative to long-distance transmission
wind LCOE for the five diverse countries or development of electricity generation in
and accelerate, with solar PV capacity shown is 32 percent, and for solar PV it is 49 these land-constrained regions. Moreover,
growing approximately 6X to more than percent.12 A main driver for these reductions offshore wind LCOE keeps dropping yearly,
3,600 GW, and wind capacity more than in LCOE is a reduction in CAPEX as supply with GE’s most efficient designs achieving a
3X to 1,900 GW by 2040, according to the chains benefit from increasing scale and an capacity factor of 63%.
IEA’s reference Stated Policies Scenario. An accelerating learning curve. A key outcome
additional two decades of renewables growth of the reduction in CAPEX is the ability to Offshore wind is an affordable, renewable
will result in more than a 2.6X increase accelerate renewables deployment because source of energy that can be deployed at a
in electricity generation from renewable a fixed amount of investment purchases scale capable of providing as much capacity
sources, accounting for 47 percent of the more capacity. as thermal and nuclear power plants. The IEA
total global electricity supply in 2040.11 has highlighted its almost limitless potential,
Advances in technology have also and the Ocean Renewable Energy Action
Yet despite wind and solar
contributed to the reduction in LCOE. Wind Coalition (OREAC) estimates the world can
accounting for nearly 75% of turbines are getting more efficient at low deploy 1.4TW by 2050.14 Offshore wind is
global net capacity additions wind speeds. The towers are getting taller an undeniable pillar in the energy mix, a
between now and 2040, the and blade diameters larger, enabling them here-and-now technology contributing to
to produce more energy from a given piece decarbonization and limiting increases in
industry needs to do more to
of land. Capacity factors are also improving, global average temperatures.
reduce global generation from with new onshore wind farms now operating
coal to meet decarbonization
goals. See Figure 3.
Onshore Wind LCOE, Solar PV Utility Scale LCOE,
$/MWh, 2018 Real USD $/MWh, 2018 Real USD
70 140
60 120
50 100
40 80
30 60
20 40
10 20
0 0
2015 2020 2025 2030 2035 2040 2015 2020 2025 2030 2035 2040
United States Brazil Germany India Egypt
F I G U R E 4 : LCOE of Onshore Wind and Utility Scale Solar PV are expected to continue to drop.
Source: IHS Markit, Global Renewable Levelized Cost of Electricity Outlook Part 1, February 2020. ©2020 IHS Markit. All rights reserved. The use of this
content was authorized in advance. Any further use or redistribution of this content is strictly prohibited without prior written permission by IHS Markit.
Accelerated Growth of Renewables and Gas Power Can Rapidly Change the Trajectory on Climate Change 7Strong grids and energy storage systems The CAPEX of Li-ion batteries has the sun is shining but demand is low to a
are key to compensating for the variable come down substantially in recent weekday when demand is higher will reduce
nature of wind and solar generation. the number of charge/discharge cycles over
Although in some locations wind and solar
years and this cost reduction which to monetize the battery CAPEX. The
generation are complementary, i.e., solar trajectory is expected to continue. relationship of CAPEX to the Levelized Cost
generation is available during the day See Figure 5. Utility-scale battery systems of Storage (LCOS) is such that if the number
and wind generation is more prevalent have benefited from the massive build-up of charge/discharge cycles is cut in half, the
at night, modern power systems must of battery capacity to support the electric
LCOS doubles. Battery storage will
match supply and demand in real time and vehicle market, and the CAPEX of a 4-hour
BESS is expected to drop an additional 50 not be competitive on an LCOS
provide 24/7/365 reliability.
percent between 2020 and 2040.15 basis for durations greater than
Very high penetration of renewables 8 hours until there is a significant
generation could lead to system Li-ion battery storage has become an
technology breakthrough
instability if grid operators don’t attractive and economical approach for
intra-day (typicallyCOAL IS DOWN, part to utilities responding to the negative Coal in 2040: 22% of total
BUT NOT OUT public perception of coal, and reductions in
available sources of finance from entities
global electricity and 68%
As the international community moves such as export credit agencies, pension funds, of power sector CO2
toward a decarbonized future, the ideal and private equity. Despite the retirements
generation mix will depend on an individual and recent orders slowdown, there remains SOURCE: IEA WEO 2020
country’s available fuel resources, its point a large installed base of coal power plants
in the journey to a decarbonized future, globally and it is expected that there will
and the often-competing goals of providing still be nearly 2,000 GW of coal plants in
reliable, affordable and sustainable energy operation at the end of this decade.17 China and the rest of the world (ROW),
to a growing population that aspires to however, have experienced increases in coal
improved standards of living. Global CO2 emissions from coal power power CO2 emissions since 2010. Coal power
has been increasing for decades, but CO2 emissions in China are up approximately
Coal is the largest fuel source with a leveling off of coal power generation 44 percent since 2010 and the ROW is up 27
due to coal-to-gas switching, increased percent. Coal power emissions are expected to
for electricity generation in the
renewables generation, reduced operation level off in China and ROW near the end of this
world today, accounting for 37 percent and retirement of coal power plants, policy decade, leaving both with enormous potential
of the total.16 Despite well publicized mandates, and the impact on demand due to further reduce CO2 emissions from coal.
retirements of coal-fired capacity in the to the COVID-19 pandemic, global coal
United States and Western Europe, power CO2 emissions likely have already Looking out a decade further, to 2040, coal
there are still more than 2,000 reached their peak. Since 2010, coal power power is expected to provide 22 percent
GW of coal power plants CO2 emissions have come down more than of global electricity generation and be
46 percent, and 31 percent in the USA and responsible for 68 percent (8.5 Gt) of power
installed globally, making up
Europe, respectively. See Figure 6. These sector CO2 emissions, according to the IEA.19
nearly 30 percent of global trends are expected to continue, and in the
installed capacity, and nearly IEA’s Stated Policies Scenario the USA’s coal
Emissions from coal at this
400 GW in the United States power CO2 emissions come down 77 percent
by 2030 relative to the 2010 baseline year and level are inconsistent with
and Western Europe alone.
Europe’s come down 74 percent.18 Despite the achieving the goal of reducing
Approximately 1,400 GW of new coal-fired
gains in these regions, there is the potential to global warming and more
power plants have been put on order globally
reduce coal power CO2 emissions even further
since the turn of the century, mostly in China aggressive actions are needed,
by running the installed gas power fleet more
during the 2000-2010 timeframe. In recent including deployment of carbon capture,
and strategic deployment of new gas power
years there has been a dramatic slowdown in utilization and storage (CCUS) at coal power
and renewables.
orders for new coal power plants due in large plants, increased utilization of existing gas
power, and increased deployment of new gas
power and renewables.
POWER SECTOR COAL EMISSIONS TRAJECTORY
5% -2%
150%
-4% 5%
44%
1,858 Mt CO2 1,131 Mt CO2 3,402 Mt CO2 2,551 Mt CO2 27%
100%
-31%
-46% ~5,000 Mt ~3,300 Mt
additional additional
50% -32% potential potential
-22% -9%
-11%
435 Mt 292 Mt
additional potential additional potential
0%
2010 2019 2025 2030 2010 2019 2025 2030 2010 2019 2025 2030 2010 2019 2025 2030
USA Europe China ROW
F I G U R E 6 : The USA and Europe are on a trajectory to reduce coal power CO2 emissions significantly through retirements and
decreased operation, but there is an opportunity for further reductions. China and ROW are still on a trajectory of increasing coal
power emissions and need to reverse course. Source: IEA World Energy Outlook 2020 Stated Policies Scenario
Accelerated Growth of Renewables and Gas Power Can Rapidly Change the Trajectory on Climate Change 9The world is
better served by
accelerating renewables
deployment, running
existing gas plants more,
and adding new gas
capacity as the industry
reduces coal
generation
A POWERFUL COMBINATION –
RENEWABLES PLUS GAS-FIRED POWER
GE believes in and promotes IEA, given the time it takes to build up The United States is a powerful
additional renewables capacity, new renewables and to implement energy example of the pace and scale
efficiency improvements, coal-to-gas
augmented where needed with switching represents a potential quick win
that renewables and gas power
natural gas generation to provide for emissions reductions. There is potential in can lead to decarbonization of
system flexibility and dependable today’s power sector to immediately reduce a power sector that was heavily
up to 1.2 Gt/yr of CO2 emissions by running
capacity, as the most effective dependent on coal. Since the peak
existing gas-fired plants harder and reducing in 2007, power sector CO2 emissions in the
near-term action to decarbonize coal use commensurately. There is additional United States have dropped 33 percent while
the energy sector. Despite the massive opportunity to reduce coal emissions total electricity generation remained fairly
deployment of wind and solar capacity in by retiring existing coal-fired capacity constant at approximately 4,300 TWh. During
recent years, increases are not occurring and replacing it with new, high efficiency this time, coal generation dropped roughly in
at the pace or scale needed to decarbonize combined cycle capacity. Doing so would half, from 50 percent to 24 percent, while gas
the electricity sector and meet the goals almost immediately bring down global power generation increased from 20 percent to 37
of the Paris Agreement. According to the sector emissions by 10 percent and total percent, and wind and solar grew from less
energy-related CO2 emissions by 4 percent.20 than 1 percent to 9 percent.21 The emissions
reduction attributed to coal-to-gas switching
was greater than that from any other fuel
source. See Figure 7 on the following page.
Given the time it takes to deploy new renewables and to implement
energy efficiency improvements, coal-to-gas switching represents a
potential quick win for emissions reductions.
SOURCE: IEA SPECIAL REPORT, THE ROLE OF GAS IN TODAY’S ENERGY TRANSITIONS, JULY 2019
Accelerated Growth of Renewables and Gas Power Can Rapidly Change the Trajectory on Climate Change 10US POWER SECTOR CO2 (Million Metric Tons)
2,500 Total US CO2 Emissions 33% reduction in CO2
~30% Other sources
of reduction
Gas
Gas enabled
2,000 Oil ~40% net reduction
Avoided
CO2 from Renewables
Coal renewables ~30% contribution
1,500
1,000 US power sector CO2 ↓ 33% from Peak:
Coal: From 50% of TWh to 24%
500 Gas: From 20% of TWh to 37%
Wind + Solar: From 2% to 9% of TWh Source: US Energy Information
Administration, Monthly Energy
Review, June 2020
0
‘91 ‘95 ‘99 ‘03 ‘07 ‘11 ‘15 ‘19
US ELECTRICITY GENERATION BY FUEL
TWh by Fuel TWh Total US
2,500 5,000
Total US Generation 4,500
2,000 4,000
Coal 3,500
1,500 3,000
2,500
Gas
1,000 2,000
Nuclear 1,500
500 1,000
Hydro
Other Wind 500
Solar
0 -
‘91 ‘96 ‘01 ‘06 ‘11 ‘16
Source: GE Gas Power Global Power
Outlook 2020
F I G U R E 7 : Coal-to-gas switching is contributing more to power sector carbon
reduction in the US than any other generation technology.
Accelerated Growth of Renewables and Gas Power Can Rapidly Change the Trajectory on Climate Change 11POTENTIAL FOR REDUCING COAL EMISSIONS
BY USING RENEWABLES PLUS GAS POWER CO2 Reduction Potential
25–45%
Reduces 100% of the carbon… 25–45% of the time…
coal must run when wind and sun are not available based on average capacity factors
50–60%
Reduces 50–60% of the carbon…100% of the time…
gas runs base load and the coal plant can be shut down
62–78%
Renewables reduce 100% of the carbon...25–45% of the time...
and gas reduces 50–60% of the carbon the rest of the time.
COAL WIND + SOLAR PV BATTERY COMBINED
CYCLE GAS 68–80%
Renewables plus 4-hr batteries reduce 100% of the carbon...35–50% of the time...
and gas reduces 50–60% of the carbon the rest of the time
F I G U R E 8 : Replacing baseload coal with a combination of renewables and gas yields the quickest carbon reduction at
scale. Note that CAPEX and required land are not addressed in the above analysis.
On a global scale, replacing coal approximately 25–45 percent of the coal CO2 cycle gas turbine plants making up any
with a combination of variable emissions. That said, the coal plant would remaining energy needs. This results in
still need to provide energy, and thereby emit approximately a 62–78 percent reduction
renewables and batteries CO2, when wind and solar are not available. in overall system CO2.
plus dispatchable gas yields
greater carbon reduction than Replacing the coal plant with base load Replacing the coal plant with a
renewables alone. An analysis natural gas alone would reduce CO2 complementary mix of wind, solar, and
done by GE and summarized in Figure 8 emissions by approximately 50–60 percent 4-hour batteries, plus natural gas enables
considers the real-time balancing of power for 100 percent of the time due to the lower the wind and solar to provide zero-carbon
supply and demand using a hypothetical CO2 intensity of natural gas. energy for 35–50 percent of the time, with
base loaded coal plant as an example. combined cycle gas turbine plants making up
Replacing the coal plant with a any remaining energy needs. This maximizes
Because of the variable nature of wind and complementary mix of wind and solar plus the energy from the renewables sources and
solar energy, and lower capacity factors for natural gas, however, enables the wind results in approximately a 68–80 percent
these technologies, a direct replacement of and solar to provide zero-carbon energy reduction in overall system CO2.22
coal with wind and solar would eliminate whenever they are available, with combined
Accelerated Growth of Renewables and Gas Power Can Rapidly Change the Trajectory on Climate Change 12GAS POWER
ENABLES MORE Average Dependable Capacity Typical CAPEX Cost $/kW
RENEWABLES Gas 84% Gas – CC ~$700–$1,200
Coal 78% Coal ~$5,000
Nuclear 92% Nuclear ~$8,000
Hydro 63% Onshore Wind ~$1,500
Natural gas-fired power generation is flexible Wind 14% Onshore, 27% Offshore Solar PV ~$1,250
and dispatchable. Plants can come online Solar 20–40% Battery ~$1,200/kW (4-hour)
quickly, adjust power output level, and turn
down to a very low output level to balance
F I G U R E 9 : Average dependable F I G U R E 1 0 : Gas power is the
supply and demand as needed. They can
capacity of various generation lowest cost generation technology
deliver more power or less as supply and
technologies.23 on a $/kw basis.24
demand for electricity vary throughout the
day, over the course of a week or month,
and seasonally—whenever required. This
flexibility is especially important to maintain to illustrate the ability of a technology Gas power is affordable due to its low
grid stability as more non-dispatchable wind to reliably produce electricity during CAPEX requirements and the availability of
and solar resources are deployed. summer or winter daytime and nighttime abundant, cost competitive natural gas. In
peaks considering nameplate capacity, fact, it is currently the lowest cost generation
Gas-fired power plants are degradation due to ambient temperature technology on a $/kW basis. This is especially
available regardless of the time effects, and the coincidence of a renewable important when access to capital is
generation source to peak demand. The constrained or project financing is required.
of day or weather conditions,
values shown are global averages. See Figure 10.
providing dependable capacity
as long as needed, whether for Nuclear remains an important part of Gas can provide affordable
minutes, hours, days or weeks the power generation landscape and is baseload power in developing,
at a time. Wind and solar power are contributing to the transition to cleaner high-growth regions, and then
energy as the most dependable source of
available when the wind is blowing or the transition to economic and
CO2-free power. Today nuclear power delivers
sun is shining. The availability of the wind complementary cyclic or peaking
approximately 10% of the world’s electricity
and solar resources does not always coincide
with more than 400 GW in the global power as needed to accommodate
with demand. Because electricity supply
and demand must always be in balance,
installed base. While there are plans future renewables growth.
to phase out nuclear power in some
renewables require dispatchable backup
countries, forecasts show around
power such as natural gas power plants
10 GW/yr of future demand
or batteries to ensure system reliability.
for new nuclear plants
The Dependable Capacity metric shown
although the timing
in Figure 9 has been developed by GE
is uncertain. Gas power is
affordable, efficient
and dispatchable
as a means to complement
renewables, with less than
50% of the CO2 emissions
compared to coal
Accelerated Growth of Renewables and Gas Power Can Rapidly Change the Trajectory on Climate Change 13LAND USE IS AN land uses. Using the United States as an Significantly less space is required
IMPORTANT FACTOR example, the relatively densely populated for gas-fired generation, enabling
east and west coasts make locating utility
Modern society requires vast amounts scale onshore wind farms a challenge, but in
natural gas power plants to
of electricity to function, and one of the the less populated central plains (e.g., Iowa) be deployed closer to demand
greatest challenges we face today is this is less of an issue. Similarly, solar PV centers and possibly avoiding
providing electricity that is affordable, can be located in the desert southwest (e.g.,
the need for an investment in
reliable and sustainable on a planet with Arizona) where the solar resource is abundant
a growing population that requires more and vast tracts of land are available with little transmission infrastructure. Figure
11 demonstrates the amount of land needed
land. Land is an increasingly scarce or no competing uses. In both examples the
transmission of the electricity from where it is to provide 1,000 MW of power generation
global resource that is subject capacity using different technologies.26
generated to where it is consumed needs to
to competing pressures from be considered and new infrastructure such as
agriculture, human settlement, high-voltage direct current transmission lines Available land could become a barrier to
and energy development. may be required. a 100 percent renewable power sector in
certain locations, particularly major cities,
Renewables sources such as wind
Offshore wind has the potential to address and will become increasingly challenging
and solar PV are less power dense land use challenges in some regions. A recent as the world’s population grows. A more
than natural gas power, meaning analysis by the IEA examined the technical practical approach is to strategically deploy a
that they require more land per unit of potential of all marine areas within 300 combination of wind, solar PV, batteries and
installed generating capacity or unit of kilometers of shore using the newest turbine natural gas-fired power plants that enable
electricity produced. designs. Tapping just the most attractive sites decarbonization at a pace and scale greater
in near-shore shallow waters could provide than can be achieved by renewables alone,
The low power density of wind, solar PV and nearly 36,000 TWh of electricity, nearly 90 while minimizing the amount of valuable
battery storage is not an impediment in parts percent of the total global electricity demand land required.
of the world where land is plentiful and the expected in 2040. Realizing this potential,
demand for electricity is in relatively close however, will require trillions in investment
proximity to the renewable supply. Where dollars, careful planning, efficient supply
this is not the case, there can be a conflict chains, and transmission infrastructure
between electricity production and other capable of bringing the electricity onshore.25
BOSTON, MA, USA ARIZONA AND IOWA, USA
600 ACRES:
BATTERY STORAGE
50,000 ACRES:
WIND
13 ACRES: COMBINED
CYCLE PLANT
5,000 ACRES:
SOLAR PV
F I G U R E 1 1 : Land requirements for 1,000 MW of capacity: gas generation
QUINCY requires a small fraction of the space per MW compared with renewables
MARKET and battery storage. The green and blue boxes on the left and right show
approximately equivalent areas for wind and solar PV in the Boston area and
less populated regions.
Accelerated Growth of Renewables and Gas Power Can Rapidly Change the Trajectory on Climate Change 14Gas power can
be deployed quickly
and at scale
NATURAL GAS IS RENEWABLES AND GAS
ABUNDANT, AVAIL ABLE POWER CAN BE DEPLOYED
AND AFFORDABLE QUICKLY
Natural gas availability has increased nearly 10 percent in global capacity.28 In fact, The key to combatting climate change in
dramatically with the advent of new methods the IEA expects globally traded LNG to grow the power sector is to make significant
for oil & gas production and a sharp increase nearly 80 percent by 2040.29 changes to the generation mix toward
in global gas liquefaction and regasification renewables and gas power quickly and at
capacity. The IEA projects that At the onset of 2020, the International Gas scale. Natural gas power plants can
Union reported that there were 120 Mtpa of
global natural gas production regasification capacity under construction,
be deployed more quickly than
could increase nearly 30 percent which will add about 15 percent to global any other form of dispatchable,
by 2040 from 2019 levels and that capacity. When these facilities become utility scale power. A trailer mounted
USA wholesale prices remain operational, the number of countries with aeroderivative gas power plant rated at 30
regasification capacity will exceed 42.30 MW can be deployed anywhere in the world
below $4.20 ($2019) throughout
in a manner of weeks to months to address
the period.27 The result of the new gas production emergency needs. Simple cycle gas power
methods and expansion of both liquefaction plants can be in commercial operation 6–12
According to IHS Markit, 2019 was a record and regasification capacity is a natural gas months after notice to proceed is received.
year for global liquefied natural gas (LNG) on fuel resource that is expected to be available Combined cycle power plants rated at 1GW
several fronts. Arguably, the most important at relatively low and stable prices for the or more take 24–36 months to be brought
of these is the amount of liquefaction foreseeable future. into commercial operation. Wind and solar
capacity that was sanctioned in 2019, power can also be deployed quickly, typically
reaching a Final Investment Decision (FID). generating power in as little as 6–12 months
70.4 Mtpa (millions of tons per annum) from notice to proceed.
reached FID compared to the prior all-time
high of 20 Mtpa in 2005. Most of this new Globally traded LNG is These short deployment times mean that
liquefaction capacity will be in the US, Russia renewables and gas can be contributing to
and Mozambique. Similarly, a record 38.8 expected to grow nearly CO2 reductions quickly and at scale, while
Mtpa of new liquefaction capacity reached generating revenue, and less capital is tied up
commercial operation in 2019, an increase of
80% by 2040.
during the construction phase of a project.
SOURCE: IEA WEO 2020
Accelerated Growth of Renewables and Gas Power Can Rapidly Change the Trajectory on Climate Change 15Existing
and future gas
GAS TURBINES HAVE A PATHWAY TO power plants can be
decarbonized and avoid
LOW OR ZERO-CARBON EMISSIONS CO2 “lock-in” by using
hydrogen as a fuel or
employing carbon
capture
Natural gas-fired combined
cycle power plants are the
lowest emitting fossil fuel power
Pathway to Low or Near-Zero Carbon with Gas Turbines
Carbon Emissions Intensity (g/kWh)
plants, whether measured
based on CO2, SOx, NOx, CAPABLE TODAY
particulate matter, or mercury. RETROFITTABLE IN THE FUTURE
45%
Going forward, however, there will be a need
to reduce CO2 emissions further and there is ~1,000
60%
69%
a concern that deploying new gas generation
capacity will “lock in” CO2 emissions for the
lifetime of the power plant. Gas turbines
currently in operation or yet to be deployed 97%
have a pathway to enabling decarbonization COAL GAS 100%
and avoiding lock in of CO2 through utilization HA HA HA Combined HA with
Global Global
of hydrogen as a fuel or through carbon Average Average Combined Combined Cycle with 100% H2
capture technologies. See Figure 12. Cycle Cycle with 90% Carbon
50% H2 Capture
One method to reduce CO2 emissions from
gas turbines is to mix hydrogen with natural F I G U R E 1 2 : Gas turbine decarbonization opportunity
gas. “Green” hydrogen, which generates
no carbon emissions, is produced by
electrolyzing water using renewable energy
specific energy of hydrogen, a 50/50 mixture Future cost and technology breakthroughs
as the energy source. The hydrogen produced
of hydrogen and natural gas by volume only may make hydrogen competitive as a
in this manner serves effectively as an energy
reduces CO2 emissions by approximately zero-carbon dispatchable fuel source to
storage mechanism enabling the renewable
25 percent relative to a gas turbine complement renewables. Policies and
energy to be stored in the form of hydrogen
without hydrogen blended with natural incentives are being implemented in several
for later use in a gas turbine.
gas. To achieve a 50 percent reduction in countries to foster development of hydrogen
CO2 would require approximately a 75/25 infrastructure and drive down costs. These
Gas turbines have been running hydrogen/natural gas mixture by volume.31 have the potential to significantly increase
for decades on high hydrogen/ the availability and affordability of hydrogen,
low Btu gases. State-of-the-art HA gas similar to what the wind and solar PV
A potential benefit of using hydrogen as a fuel
turbines are currently capable of burning industries experienced through targeted
in gas turbines, either as a blend with natural
up to 50 percent hydrogen by volume policies and incentives.
gas or at 100 percent hydrogen, is that it can
when blended with natural gas, and work be accomplished either as a new build or on a
is underway to develop capability for 100 Another pathway to net-zero carbon
retrofit basis, with relatively minor changes to
percent hydrogen in these machines by emissions for a gas turbine is through the
the gas turbine and plant auxiliary equipment.
the end of the decade. It should be noted use of either liquid or gaseous biofuels. Gas
Therefore, the decision to build a gas-fired
that mixing hydrogen and natural gas at a turbines are capable today of burning a wide
power plant today does not necessarily lock
50/50 volume ratio does not result in a 50 variety of these carbon-neutral fuels.
in CO2 emissions at the original level for the
percent reduction in CO2 emissions. In fact, entire life of the power plant.
because of the lower density and lower
Carbon capture or using hydrogen as a fuel are currently viable methods
to decarbonize existing and future gas turbine power plants.
Accelerated Growth of Renewables and Gas Power Can Rapidly Change the Trajectory on Climate Change 16CCUS also has the potential to
significantly reduce CO2 emissions
from all fossil fuel burning Land Surface
power generation and industrial
Conventional
processes. The Amine process is the Non-associated Coalbed Methane
most mature CCUS technology, with the Gas
capability to remove up to 90 percent of the Conventional
Associated Gas
CO2 from an exhaust stream. Pilot projects
are in operation today. Drawbacks include
a near doubling of the upfront CAPEX of a Seal Oil
power plant, additional space requirements,
and a reduction in generation efficiency of Sandstone
Tight Sand Gas
almost 10 percentage points. Factoring in
the additional cost and reduced efficiency
results in an increase in LCOE of 30 percent Gas-Rich Shale
U.S. Energy Information Administration
to 50 percent.32 Efforts are underway to
optimize the power plant and CCUS thermal
needs such that the impact on efficiency F I G U R E 1 3 : Geologic formations have stored gaseous natural gas, CO2 and other
is reduced, and a price on carbon could hydrocarbons for hundreds of millions of years and may be feasible for safe and permanent
make CCUS an economic option even CO2 sequestration (image courtesy of the US Energy Information Administration).
with the increase in LCOE. Again, targeted
CCUS policies and incentives, or a price
on CO2 emissions, could be the catalyst
with them. Public perception and political 38 percent. Total oil and gas (O&G) related
needed to foster technological innovation
sentiment are real, however, and need to be methane emissions are about 70 million
leading to reduced costs and widespread
addressed before carbon sequestration is metric tons per year, and are attributed
deployment of CCUS technologies.
employed on a large scale. See Figure 13. to a combination of intentional venting,
incomplete combustion of flared gas, and
Merely separating CO2 is insufficient to reach leaks in the production, processing and
deep decarbonization goals. It must be either METHANE EMISSIONS... distribution of O&G. Natural gas-related
used or stored safely and permanently. AN OPPORTUNITY FOR
methane emissions alone are 42 million
REDUCTION
Public perception that captured CO2 cannot metric tons per year, but only about 40
be sequestered permanently is one of the percent of global gas consumption is used
A concern often raised about natural gas
biggest impediments to CCUS. Based on in the power sector. Gas power sector
power generation is that it is responsible for a
parallels to fossil fuel extraction technologies
significant increase in global methane (natural
there is a strong technical basis that the
methane emissions, at 17 million
gas or CH4) emissions. Methane is about 25X metric tons per year,33 therefore
Earth has the capacity to store more potent as a greenhouse gas than CO2 on
more CO2 than humans can account for just 3 percent of total
a pound-for-pound basis. Nearly 600 million
produce, and there metric tons per year of methane global methane emissions.
are emitted globally, of which
is very strong The IEA estimates that O&G sector methane
40 percent are naturally
evidence that occurring and 60 percent emissions can be reduced by about 70
we can safely are anthropogenic. percent by deploying available abatement
technologies and practices, and about ten
store the CO2 Technology is Methane accounts
for 16 percent of percent of that reduction is possible with no
underground available and should incremental net cost (i.e., the value of the
anthropogenic
for hundreds be deployed to cost greenhouse methane recovered is greater than the cost of
of millions effectively reduce gases on a CO2- the abatement technology.)34 The amount of
no net cost reductions is heavily dependent
of years. Every methane emissions equivalent basis,
while CO accounts on prevailing natural gas prices and also on
CO2 molecule 2
for 76 percent. Twenty regional costs for labor and material. GE
emitted began its
percent of total methane is supportive of policy that would require
journey underground,
emissions are attributed to the power and O&G sectors to implement
so the challenge is to put
fossil fuels, of which coal is 36 available methane abatement technologies
them back when we are done
percent, oil is 26 percent, and gas is and practices.
Accelerated Growth of Renewables and Gas Power Can Rapidly Change the Trajectory on Climate Change 17DIGITAL TECHNOLOGIES
CAN TIE IT ALL TOGETHER
A key element of decarbonization of the power Cost reductions in renewables and advances in digital technologies
sector will be to ensure the entire system,
are opening huge opportunities for energy transitions, while
including generating assets, the grid, and loads
are integrated efficiently in order to optimize creating some new energy security dilemmas.
electricity generation and thereby minimize
carbon emissions. This is where digital SOURCE: IEA WEO 2019
technologies can play an important role.
System operators will need to integrate
and optimize dispatch of all assets after climate change and take actions and invest in
factoring in wind and solar resources a sustainable low carbon future. In alignment
days or weeks ahead, while considering
Policy
with the Paris Agreement, some states,
the actual cost of each generation source municipalities, and utilities have also adopted
reform is needed to
including maintenance costs. Gas power zero-carbon or carbon-neutral pledges. establish a framework
plant component life is largely dictated by for making long-
thermal consumption of parts, whereas wind Meeting the targets of the Paris Agreement
components are driven more by mechanical
term power sector
requires investment in new and upgraded
wear, solar plants by output degradation, and technologies. Companies and innovators
investments
battery systems on the number of charge/ around the world are developing new
discharge cycles. All these factors can be technologies and solutions at an exciting
optimized digitally to ensure the lowest pace. There is a range of decarbonization
carbon/least cost generation solution is solutions that address the differences
achieved in real- time. countries and regions experience in their of technologies that are complementary
energy needs. Governmental policies that in nature, provide energy security, and
Digital technologies can enable define the objectives and foster innovation drive the greatest carbon reductions
should help advance the goals of the Paris in an affordable and practical way.
generation optimization to be
Agreement. • Reward R&D, innovation,
coupled with grid optimization
and private risk taking.
and a real-time understanding of
To achieve these goals, GE • Encourage the free flow of goods and
demand to enable a system that
supports policies that: ideas consistent with the principles
works seamlessly across multiple of the World Trade Organization.
• Measure and incentivize reductions in
generation sources, an intelligent power sector carbon intensity (tons of • Reflect national and local circumstances.
grid, and varying demand, to CO2 per MWh) with an emphasis on both
• Set realistic timelines for reduction efforts
maximize system efficiency, near-term actions that drive the greatest
with periodic reviews as knowledge of the
minimize CO2 emissions, reductions sooner, and a longer-term
science evolves and technology improves.
vision of ambitious carbon reductions
and ensure reliability. leading to deep decarbonization in the
coming decades. GE has set its own goal to
become carbon neutral in its
POLICY: THE • Are transparent and predictable, allowing
MISSING PIECE lifecycle economics to drive investment facilities and operations by
decisions factoring in a cost of carbon in 2030. GE’s goal focuses on its
GE supports the science and goals expressed some form vs. generic mandates picking over 1,000 facilities across the
in the Paris Agreement and the United one technology over another.
globe, including factories, test
Nations Framework Convention on Climate • Establish market structures that value
Change. The Paris Agreement was a landmark sites, warehouses, and offices.
energy, flexibility and dependable capacity
effort by 196 nations to agree to combat separately to encourage the optimum mix
Accelerated Growth of Renewables and Gas Power Can Rapidly Change the Trajectory on Climate Change 18CONCLUSION
Addressing Renewables and gas power have
the capability to quickly make
value energy, flexibility and dependable
capacity separately in order to encourage
climate change meaningful and long-lasting
the optimum mix of technologies
reductions to CO2 emissions from
must be an urgent the power sector. Neither will be as
• Increase funding in Research and
Development and incentive mechanisms
global priority, effective alone at decarbonization at the pace
and scale needed to avoid raising average
to: 1) continue the cost decline and
performance improvements in renewables,
requiring global global temperatures by less than 2ºC as
outlined in the COP 21 Paris Agreement.
2) develop renewables hybrid and storage
technology, and 3) accelerate cost effective
action, national The power industry has a responsibility, and
CCUS, hydrogen, small modular reactors,
and other potential low or zero-carbon
commitments, and the technical capability, to take significant
steps to quickly reduce greenhouse gas
technologies for dependable capacity to
complement renewables
consistent policy emissions. The solution for the power sector
is not an either/or, renewables or natural • Advocate for producers and users of
and regulatory gas proposition. It requires a multi-pronged
approach to decarbonization with renewables
methane to employ the best available
methane capture technology
frameworks. and natural gas power at its core.
• Encourage cross-sectoral cooperation for
CO2 emissions reductions such as providing
Solving the climate change green hydrogen produced from zero-carbon
Recommended steps for the
challenge requires cooperation power industry include:
energy for use in the transportation sector
across national boundaries,
• Invest in a combination of wind,
across sectors of the economy, Addressing climate change will
solar, batteries and gas-fired power
and across the political spectrum. at scale and with urgency require government and consumer
As stated by Fatih Birol, Executive Director of action. GE as a company is
the International Energy Agency, it calls for a • As coal-fired generation declines, uniquely positioned to play a key
“grand coalition encompassing governments, replace this capacity with renewables
role through its scale, breadth,
investors, companies and everyone else who supported by gas power
and technological depth. We have
is committed to tackling climate change.”
• Advocate for policies that align with the been a key player in the power
According to IHS Markit, “gas plants are goals of the Paris Agreement to reduce industry since its inception and
highly reliable—able to fill in long gaps in CO2 emissions, while ensuring a safe, have a suite of complementary
renewable production in ways that today’s affordable and reliable electricity sector.
technology including gas-fired
energy storage technologies cannot—and Such policies should: 1) incentivize
flexible enough to ramp up and down quickly reductions in power sector carbon intensity power, onshore and offshore
depending on the needs of the system, with with an emphasis on both near-term wind, hydro, small modular
the potential to run on low-carbon gas in the actions that drive the greatest reductions reactors, battery storage, hybrids
future. As the value of these characteristics sooner, and a long-term vision of ambitious
and grid solutions needed for
grows over time, new gas plants could carbon reductions, 2) are transparent
be an increasingly attractive option as a and predictable, and allow lifecycle the energy transformation.
complement to intermittent renewables.”35 economics to drive investment decisions,
and 3) promote market structures that
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