Impacts of long-term temperature change and variability on electricity investments

Abstract

Long-term temperature change and variability are expected to have significant impacts on future electric capacity and investments. This study improves upon past studies by accounting for hourly and monthly dynamics of electricity use, long-term socioeconomic drivers, and interactions of the electric sector with rest of the economy for a comprehensive analysis of temperature change impacts on cooling and heating services and their corresponding impact on electric capacity and investments. Using the United States as an example, here we show that under a scenario consistent with a socioeconomic pathway 2 (SSP2) and representative concentration pathway 8.5 (RCP 8.5), mean temperature changes drive increases in annual electricity demands by 0.5-8% across states in 2100. But more importantly, peak temperature changes drive increases in capital investments by 3-22%. Moreover, temperature-induced capital investments are highly sensitive to both long-term socioeconomic assumptions and spatial heterogeneity of fuel prices and capital stock characteristics, which underscores the importance of a comprehensive approach to inform long-term electric sector planning.

Increased energy use for adaptation significantly impacts mitigation pathways

“… 51 , and a 20% increase in total installed capacity in 2050 under the current policy scenario, in line with the 16% increase found by ref. 52 under the RCP 8.5. We expand from the literature by quantifying the global additional investments required to transform the energy system to accommodate the energy use for adaptation.…”

cerf: A Python package to evaluate the feasibility and costs of power plant siting for alternative futures

“…Long-term planning for the electric grid, also referred to as resource adequacy planning, informs decisions about investments in infrastructure associated with policy goals with the ultimate objective to maintain or enhance resilience to potential future vulnerabilities under various natural and human stressors (Alova, 2020;Craig et al, 2018;Jayadev et al, 2020;Khan et al, 2021;Sridharan et al, 2019). Future power plant siting costs will depend on a number of factors including the characteristics of the electricity capacity expansion and electricity demand (e.g., fuel mix of future electric power capacity, and the magnitude and geographic distribution of electricity demand growth) as well as the geographic location of power plants (U. S. Energy Information Administration, 2021).…”

plutus: An R package to calculate electricity investments and stranded assets from the Global Change Analysis Model (GCAM)

“…The development of plutus was encouraged by the importance of assessing the economic implications for the power sector under the long-term trend of energy system transitions from carbon-intensive fuels to low carbon technologies (Feijoo et al, 2020). Khan et al (2021) recently assessed the impacts of long-term temperature change and variability on electricity investments. Turner et al (2017) assessed climate impacts on hydropower and the consequences for global electricity supply investment needs.…”