The capacity to produce electricity continues to increase unabated as the economies of China, India, Brazil and other developing countries rapidly expands, and rich countries increase their need for electricity to facilitate digital storage and the electric automobile. There is no way to stop energy consumption from growing, as this would put a halt to the march out of global poverty and reduce standards of living even in rich countries. The growth in electricity production has been and continues to be powered by fossil fuels, particularly coal, despite wishes to the contrary. Global coal use is expected to rise by 1.1% annually over the next twenty years; an annual growth of 1.6% in developing countries is expected to be offset by a decline of 0.9% per year in the OECD countries. The reduction in coal use in the OECD will be mainly offset by a 1.2% annual increase in natural gas for power generation, while natural gas consumption is expected to increase 1.7% per year globally. Outside the OECD, however, natural gas is expected to be used more for transportation than power generation.
Renewable energy is also expected to become more important in the future, particularly in rich countries. Power generated from renewable energy sources is expected to grow by 5.8% annually in OECD countries (albeit from a much smaller base than other sources), while nuclear generation is expected to decline slightly and hydropower is expected to expand slightly. Research conducted by myself and my graduate students has focused on the ability to bring renewable energy sources into electricity grids. What policies are needed? How does one address storage requirements in the face of variability in the energy produced from wind, waves, tides and the sun? How neutral is biomass energy?
Along with growing demand for electricity and a desire to reduce carbon dioxide (CO2) emissions, there has been a renewed discussion in some quarters about the role nuclear power in meeting CO2 emission reduction targets. Indeed, a California study concluded that it would not be possible to meet that state’s ambitious emissions reduction targets without major investments in nuclear power. Recent concerns related to the failure of the Fukushima Daiichi nuclear power plant in Japan to withstand an earthquake and tsunami has reduced society’s already low confidence in the safety of nuclear power. As a result, Germany has quietly invested in new coal power plants to retain base-load capacity. But renewable sources of electrical generation, such as wind, are viewed by many as a better alternative to fossil fuel sources of energy for safely generating electricity and reducing CO2 emissions.
Wind poses many challenges for electrical system operators. Wind speeds vary considerably and sometimes unexpectedly within an hour, throughout the day or season, and even from year to year. The intermittent nature of wind requires that wind generation be supplemented by fast-ramping backup generation from open-cycle gas turbine (OCGT) and/or diesel power plants; this results in significant CO2 emissions from these plants due to more frequent starts and stops and operation at less than optimal capacity. This problem is exacerbated by inadequate transmission capacity. The ability to store power could alleviate some of the intermittency problems, but batteries are simply not up to the task at scale needed. However, an ability to store intermittent wind-generated power behind hydroelectric dams, which are also relatively fast ramping, can compensate for variability of wind, solar, wave and tidal energy sources.
Nuclear power plants are an alternative means for reducing CO2 emissions from electricity generation. They have high capacity factors and other operating characteristics that allow them to substitute for coal-fired and closed-cycle gas turbine (CCGT) base-load facilities that meet the bulk of a system’s load. An MIT study recommends that, if significant reductions in global CO2 emissions are needed to stabilize the climate, installed capacity will need to increase from the current 100 GW to 300 GW in the United States by 2050 and from 340 GW to 1000 GW globally. But these are ambitious targets.
From an environmental standpoint, wind and nuclear energy have several drawbacks. Wind turbines are visually unappealing, turbine noise could have a negative impact on health and wind farms kill many birds, including raptors and birds considered species at risk. Because wind farms are scattered across the landscape, the costs of transmission lines and associated externalities (people do not want to live near transmission lines) could be an obstacle to their eventual economic feasibility. However, disposal and transportation of nuclear waste, and fears associated with a potential nuclear accident, terrorist attack and nuclear proliferation, are major drawbacks of nuclear power.
In our research, we developed simple and more complex models of electricity grids. Because market incentives are considered more efficient than regulation, we employ a carbon tax to incentivize decommissioning of coal-fired generating capacity and new investments in renewable energy (wind and biomass in our model), as well as investments in nuclear, natural gas and ‘clean’ coal. In our analyses, we increasingly penalize fossil fuel production of electricity.
We focus on the Alberta electricity system because it has a high proportion of fossil fuel generating assets, the reduction or elimination of which would result in substantial CO2 savings. Further, there is the potential to link to British Columbia via an existing transmission intertie. The advantage of the interprovincial intertie is that BC is dominated by large-scale hydroelectric assets, so that wind power generated in Alberta can be easily stored in BC reservoirs. Currently most of Alberta’s electricity needs are met by plants that burn coal or natural gas, with minor production from hydroelectric, biomass and, more recently, wind sources. In response to an increasing load and growing environmentalism related to the high CO2 emissions from oil sands production, wind and nuclear alternatives to coal and natural gas are increasingly seen as viable options.
Consider first the case where no investment in nuclear power is permitted. Then, when we increase the carbon tax to $50 per tonne of CO2 (tCO2) or higher, coal plants begin to be de-commissioned and more wind is added to the system. As the carbon tax is ratcheted upwards from $50 to $200 per tCO2, coal generation is immediately abandoned replaced entirely by wind and natural gas. There is also activity along the intertie to BC: Any excess wind output produced during low peak hours is sold to BC (at a low price) and stored behind BC hydro dams. During peak hours, the Alberta system operator will ‘buy back’ hydroelectricity from BC as needed (i.e., depending on available wind output at the time), albeit at a higher price than it sold that power to begin with.
Interestingly, while a lot of wind capacity is added to the system, investment in gas capacity begins to rival that of the coal capacity that was displaced. Indeed, despite huge investments in added wind generating capacity, the increase in gas generating capacity equals that of the coal capacity that is displaced. Base-load power previously produced by coal is replaced by natural gas capacity, but additional natural gas capacity is also installed to backstop rapid fluctuations in wind output over and beyond that which can be handled through exchange with the British Columbia system.
By replacing coal-fired power with a combination of wind and natural gas capacity, CO2 emissions in Alberta can be reduced by some 55 to slightly more than 65 percent, depending on assumptions regarding the capacity of the intertie between Alberta and BC (i.e., the ability to store and recover intermittent wind power). These are significant reductions, but they can be partly attributed to ideal trade conditions, a potentially unacceptable carbon tax, and the installation of at 5,000 wind turbines of 2.3-MW capacity across the southern Alberta landscape.
When investments in nuclear power plants are allowed along with wind and natural gas, coal is again driven out of the model. However, there is very little investment in new wind turbines (beyond those already in place). Rather, nuclear power and natural gas replace coal-fired capacity almost one-for-one at carbon prices of $150/tCO2 or less; at a higher carbon tax, some of the original natural gas capacity is actually decommissioned with nuclear capacity entirely replacing coal, but only if the transmission capacity of the intertie to BC is increased.
Nuclear power plants operate at a very low cost, but cannot be ramped up or down. Hence, they are best used as base-load plants. While enhanced storage of electricity through a larger capacity intertie to BC is meant to mitigate intermittency associated with wind power, nuclear power can take advantage of this storage to make it a more attractive option than wind. But the main reason why nuclear outcompetes wind, despite its extremely high construction and decommissioning costs, relates to the amount of natural gas capacity required. With wind, natural gas generating capacity increases in lock-step with increases in the installed capacity of wind despite the availability of storing intermittent energy elsewhere. Thus, while carbon taxes could potentially incentivize CO2 emission reductions of upwards of 65% when wind and gas replace coal as an energy source, emissions could be reduced by 90% or more if nuclear energy was permitted in the same system.
Our research indicates that similar emission reductions are potentially available in Nova Scotia once their power grid is linked to Newfoundland. However, such savings can only be expected in systems that currently rely heavily on fossil-fuel generation, especially coal – it is like picking low-hanging fruit. However, others have likewise found that nuclear power is preferred to wind and other renewables (e.g., see article “Sun, Wind and Drain” in The Economist, July 26, 2014).
Finally, we are investigating the potential for biomass burning to generate electricity, which many jurisdictions are adopting as a means of meeting renewable energy targets. For example, Europe expects that biomass will meet one-third or more of its renewable energy targets. Biomass is considered to be carbon neutral because CO2 emitted at the time of burning is subsequently removed from the atmosphere through sequestration by growing trees. Our research indicates that carbon is far from neutral and is only neutral if global warming is not considered an urgent matter. If there is some urgency to address climate change now rather than delay to the future, using biomass to generate electricity can actually increase the globe’s predicted rate of warming.