energy+environmental economics decarbonizing buildings ......apr 27, 2021 · energy+environmental...
TRANSCRIPT
e Energy+Environmental Economics
Decarbonizing Buildings
Michigan Council on Climate Solutions
4/27/2021
Dan Aas
Energy+Environmental Economics
Agenda
About E3
Building Decarbonization Pathways
Decarbonized Gasses
Electrification
Concluding Thoughts
2
·*·--------.L
~~antee cooper' •9 Advisory and bid evalualion servkes to the State of S::iuth Carolina for tha po1antial sale
of Sontcc Cooper (-S9 cil l,onvoluotion)
Energy+Environmental Economics
lntl!grated Resaurc! ::,lan,i,-g for the CA Public
Ulilili@s C,:Jrr-mission (CPUC) to achieve state
c-le::m energy target~ (SB'OOi
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EVflh1,1tion of o,:i~ pF.RikF.r rFp Rir.f'lmffllt
~mdfOI t1) b1 ir.Jllc."1lio11 'A'ilh l::llll::'l !::JY s .OlclYI::! n New Yor< C fy a.nd Long lsl;rnd
Clearway Pr ce and revenue proJ!chans ard due diligence for GIP acquisition of I\RG re,owablas portfolio (- S 1.4 billion)
••• ---
Multiple studies on costs ar d feasibil ity of high renewables integration ,:lfld low-carbon
transition pat'lWays fro'Tl 2C20a2050
Rehab1l1ty enalysos cf closing Cl'l:t~t.2111 Q.!IIS-fired po·1tP.r plants and assessment of alternatives
[traoomiss o,,, s:oragc, etc :,
About E3
Technical &
Strategic
Consulting for the
Clean Energy
Transition
Expertise in
engineering,
economics,
mathematics &
public policy
75 full-time
consultants
with a wide
variety of
backgrounds
San Francisco New York Boston Calgary
250+ projects per year across a diverse client base
3
Energy+Environmental Economics
E3 has examined building decarbonization pathways in
distinct settings
California Northwest Northeast Minnesota
Cold Day 35F 10F -5F -20F or lower
Temp
Heating Fuels Mostly Gas Gas and Electric Gas and Fuel Oil Mostly Gas
Electric Peak Summer Winter Summer Summer
4
Energy+Environmental Economics
Building Decarbonization Pathways
Energy+Environmental Economics
ElectrificationHeat pumps,induction stoves
How will we heat our buildings?
Decarbonized gas Renewable natural gas or hydrogen
Potential Advantages: repurposes existing infrastructure, minimal consumer
disruption
Potential Drawbacks: cost, not commercial at scale, can require extensive utility
infrastructure retrofits
6
Energy+Environmental Economics
How will we heat our buildings?
Electrification Heat pumps, induction stoves
Decarbonized gas Renewable natural gas or hydrogen
Potential Advantages: commercially available products, complementary to
decarbonized electricity, assists with climate adaptation
Potential Drawbacks: requires building retrofits, upfront consumer costs, electric
peak load impacts, potential for stranded assets and workforce reductions
7
Energy+Environmental Economics
How will we heat our buildings?
Electrification Heat pumps, induction stoves
Decarbonized gas Renewable natural gas or hydrogen
Hybrid Heat pumps paired with gas
Potential Advantages: utilizes existing infrastructure, reduces demand for more
expensive varieties of decarbonized gas, mitigates grid impacts
Potential Drawbacks: this approach is not well studied in the U.S., though it is an
emerging strategy in Europe
8
Energy+Environmental Economics
Electrification Heat pumps,
Decarbonized gas Renewable natural gas or hydrogen
Hybrid Heat pumps paired with gas
How will we heat our buildings?
District heating induction stoves
With geothermal, waste heat, or bio CHP backup
Potential Advantages: multiple input sources enable a diversified decarbonization
approach
Potential Drawbacks: partly requires new infrastructure, expansion is not well studied
in the U.S., though it is an emerging strategy in Europe and being explored in MA
9
Cl Energy+Environmental Economics
Decarbonized Gasses
County Level Biomass Ory tons per square mile annually
0 - 5500
Energy+Environmental Economics
Biomethane is the lowest cost-form of
decarbonized gas, but is limited in quantity
Biomethane can be produced
from wastes
• Forests
• Agriculture
• Landfill
• Manure
And from purpose grown
energy grows
• Lifecycle and indirect emissions
impacts are important
considerations for purpose-
grown crops
• Potential to use lands currently
devoted to ethanol for
alternative energy crops Source: US DOE Billion Ton Report (2016)
11
t ,., I •••• • • • • • • • •
• t
♦
Energy+Environmental Economics
What about hydrogen?
H2
Electrolysis
“Green”
Hydrogen
H2 CO2+
Steam Methane Reforming
Storage
“Blue”
Hydrogen
12
$1,200
_ $1,000
~ --.... ~ $800 .--1 0
: $600 V)
0 u ro
;t: Q. ro u
$400
$200
$-
1400
s 1200 ~
1000 ~ Q. ro
800 ~ Cl)
ro 600 ~
400
200
0
C:
Cl) > +-' ro ::J E ::J u
2020 2025 2030 2035 2040 2045 2050
~ E3 Cost ~ MHPS Cost Cumulative Capacity
Energy+Environmental Economics
$6 - -----------------------
i $ s -· =-_s::::::-------==---------< ~ 00 .... = ~ $4-§ C .9 $ 3 - -----=-.._ ti ::II 'a
SMR SMR with CCS {90%) On-site solar/wind
Curtailed renewables Adv. Nuclear
e -----------~~~---~-~c$2-·- ~----~-~-~-=-=-=-~-~-'------------- ----~~ w- ---a, e 'a :r $1 - -------------------------
$0--·- --~ ---~ ----.-----,-----.----.----2020 2025 2030 2035 2040 2045 2050
E3/UCI 2020 Capital
Costs and Learning
Curves
MHPS 2020 Capital Costs and
E3/UCI Learning Curves
Hydrogen production costs are expected to decline
Alkaline Electrolyzer Cost Projection E3/UCI Hydrogen Production Cost Projection
E3 recently published a report on potential opportunity for renewable hydrogen in a deeply decarbonized future
with Mitsubishi Hitachi Power Systems (MHPS)
Electrolysis with renewable power may be more economic than SMR with CCS if electrolyzer costs fall with an
aggressive learning rate of 25% and curtailed renewables are available at close to zero cost
13
t • • ,., •• I •••• •••• . . . .
• t I t
I
Energy+Environmental Economics
Synthetic Natural Gas (SNG) Production
H2
Electrolysis
Bio-CO2 CO2 from
Direct Air
Capture
Methanation
CH4
SNG production requires a combination of climate neutral hydrogen and climate neutral CO2.
E3 considers two sources of climate neutral CO2: 1) less costly bio-CO2 from biofuels
production, 2) more costly CO2 from direct air capture.
14
90
80
70 .-. :J I- 60 co E E 50 -fA-co T""" 40 0 N ---+-' CJ) 30 0 u
20
10
00 0.25 0.5
Energy+Environmental Economics
SNG with DAC
SNG with bio-C02
7% H2 in pipeline
Bi om ethane
______ .. Optimistic scenario
. EIA forecast for 2050 NG price : Pipeline gas demand
: in 2050 Pipeline gas demand in 2017 : with no electrification
0.75 1.0 1.25 1.5 1.75 2.0 RNG supply (Quads)
2.25
E3 RNG Supply Curve: Conservative vs Optimistic
California Renewable Natural Gas (RNG) Supply Curve, 2050
This plot bounds a
‘Conservative’ and ‘Optimistic’ set of costs for RNG
The quantities of RNG on the x-
axis will be different in MI, but
the relative proportions are
likely to be similar
15
@ Energy+Environmental Economics
Electrification
• CZ 5- Standard HP .. • CZ 5- Cold Weather HP
~ 12 ..
Sacramento-~ • New Standard HP -"'O 10 • co 0 (.)
·;:: 8 -(.)
Q.)
Q.)
0.. 6 E ::::i 0.. - 4 co Q.)
I
2
0 0 20 40 60 80 100
Temperature (F)
Energy+Environmental Economics
Proposals to electrify heating focus on deployment of air-
source heat pumps
Air-source heat pumps are very efficient on
an annual basis, with coefficients of
performance (COPs) of 3 or higher possible ASHP loads for a 2200 ft2 building
in Washington today
However, ASHP COPs fall as the outdoor
air temperature drops. This increases the
amount of electric load required to keep
buildings warm.
Heat pumps are commonly installed with
supplemental heat that is used during the
coldest hours of the year.
• For all-electric homes, supplemental heat is
provided via electric resistance
• “Cold climate” heat pump models require less supplemental heat than traditional systems.
Supplemental heat may not be needed in all
cases.
17
160
140
120
100
$ 80 c.,
60
40
20
0
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Building Thermal Loads Electric System Loads
---------.--------.-------,-----....-----......--------,,--------.--------.----0 1000 2000 3000 4000 5000 6000 7000 8000
Hour of Year
Energy+Environmental Economics
At scale, electrification natural gas end-uses could
have large impacts on electricity systems
Thermal vs electric loads: NY + NE, 2050
18
Energy+Environmental Economics
Potential strategies to mitigate those peaks and open
questions
Building shell improvements
• What are the trade-offs between investments in buildings vs building a bigger grid?
Continued improvements in the cold-weather performance of heat pumps
• How can consumers be incentivized to invest in systems with lower impact on the grid, but that come at a higher
private cost?
Ground source heat pumps
• Are the electric sector savings sufficiently large to overcome the higher installation costs of these systems?
Hybrid (also called dual fuel) heat pumps
• How do the grid benefits of this approach measure against the costs of decarbonized fuels and fuel delivery?
• Is there a viable business model for fuels (e.g. natural gas, propane, kerosene) to serve purely as backup?
Load flexibility
• To what extent (how much, how long) can loads be shiftable?
• What consumer-side costs will be required to enable those shifts?
19
Energy+Environmental Economics
Concluding Thoughts
Energy+Environmental Economics
Final Thoughts
Decarbonized gasses can have an important role in decarbonizing buildings end-uses.
• However, they are much costlier than natural gas, are likely to be limited in scale and are commercially unproven
Heat pumps can efficiently heat buildings during most hours of the year
• But all-electric buildings can cause large electric system impacts during the coldest hours
In cold-climates, lower-cost, lower-risk decarbonization strategies will likely require some
combination of decarbonized fuels and electrification
• Electrification will likely be a lower cost means to provide heating energy during most hours of the year
• Decarbonized fuels may have an important role to deliver heat during the coldest hours of the year
Energy efficiency is needed in all cases
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