EPRI Study Points to Significant Electrification Potential in Georgia and AlabamaPosted to Electric Power Research Institute (EPRI) in the Utility Management Group
- Mar 31, 2021 4:00 pm GMTMar 31, 2021 2:43 pm GMT
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As director of operational excellence and new technology at Georgia’s Oglethorpe Power Corporation, Richard Clark continually seeks a better understanding of the emerging trends and technologies that could impact the electric power industry. As part of his ongoing research, Clark read EPRI’s 2018 U.S. National Electrification Assessment and was struck by its load growth projections. The report noted that annual load growth between 1990 and 2000 was 2.7% and then dropped to just 0.8% from 2000 to 2010. In the assessment, EPRI projected that load growth could reach 1.2% each year through 2050 under a scenario with a stringent price on carbon emissions and aggressive electrification of transportation.
“What caught my attention were the electric load trends, which were significantly different from what the norm has been,” said Clark of Oglethorpe, a generation cooperative that serves about 4.3 million people in Georgia. “Historically, load had been growing at about 2% per year, and many believed that level of load growth would return after the 2008/2009 recession, and we planned our energy resources accordingly. However, EPRI showed that recent load growth was minimal due to efficiency improvements and other factors and projected that load growth without electrification would continue to be flat.”
EPRI’s national electrification assessment made it clear to Clark that myriad policy and technology factors have the potential to upend both traditional load growth scenarios as well as hourly load shapes. Impressed by the nuance and complexity of the assessment, Oglethorpe and Southern Company partnered with EPRI to conduct an electrification assessment focused on Georgia and Alabama.
As in the national assessment, the state-level analysis used EPRI’s U.S. Regional Economy, Greenhouse Gas, and Energy (US-REGEN) model, which provides insights on how various policies and regulations, market dynamics, and technological innovations can affect and shape energy industry fundamentals such as the price of electricity, end-use technology adoption, revenues, and greenhouse gas emissions. For the Georgia/Alabama study, the data fed into the model benefitted from state-level expertise provided by Oglethorpe and Southern.
“When we can collaborate with people with a lot of regional knowledge about the electric grid, existing generation capacity, and power plant retirement plans, that knowledge helps us refine the model to run at the state level,” said John Bistline, a principal project manager in EPRI’s Energy and Environmental Analysis Group, which led the assessment. “For example, one of our data sources may not have the right heat rate, which is an important measure of the fuel used by a power plant to generate a unit of electricity. Technology adoption trends and drivers of change in the energy industry can vary a lot from state to state, so it’s important to have good state-level data.”
The study’s objective was to evaluate the potential for efficient electrification in Georgia and Alabama and to identify the drivers of, challenges to, and opportunities presented by greater electrification. To do that, EPRI ran dozens of scenarios with different assumptions about policies, fuel prices, technology costs and performance, and many other factors. EPRI also is modeling how various scenarios impact regional air quality.
In addition to the modeling work, EPRI experts held webcasts with Oglethorpe and Southern Company about electric technologies that may be economically attractive to commercial and residential customers in Georgia and Alabama, such as heat pumps and electric vehicles (EVs). The webcasts were meant to provide education about how different electric technologies work as well as the financial payback they can deliver.
Under all the modeled scenarios, carbon dioxide emissions fell in Georgia and Alabama as a result of increased efficient electrification in the building, transportation, industrial, and other sectors. One key insight was that electric transportation could account for between 20% and 27% of electricity demand in Georgia by 2050, more than any other sector. In fact, the model’s reference scenario (which considers economic factors and consumer preferences but does not include new policies to support electrification) found that EVs could account for 75% of light-duty vehicle miles traveled in Georgia by 2050, with electricity providing 43% of final energy use for passenger vehicles.
The amount of EV-related load growth depends on the speed at which battery costs decline. For example, when the model assumes slower cost declines, the proportion of EV vehicle miles in 2050 falls to 60%. Accelerated cost declines could lead to more than 80% of light-duty vehicle miles driven by EVs in 2050.
Peak load in Georgia and Alabama historically has occurred in the summer, when air conditioning is in high demand. The EPRI assessment revealed that increased adoption of electric space heating by residential and commercial customers could potentially shift the peak to winter. In the reference scenario, for instance, the share of residential square footage heated by electricity rose from 47% today to 73% in 2050. Other potential contributors to the seasonal peak shift include a rise in electric-powered water heating and lower summer electricity use due to efficiency improvements in air conditioning units, which are prevalent in the south.
Another takeaway from the study: as end-uses electrify, nuclear power can support emissions reductions by lowering the emissions intensity of electricity generation. Researchers found that the decline in emissions is particularly steep with national carbon pricing starting in 2025. All scenarios assumed that the two new nuclear units of Georgia’s Plant Vogtle currently under construction come online. The extent of decarbonization also rests heavily on whether existing nuclear capacity in Georgia and Alabama remains online. Without a carbon tax, the economic viability of nuclear plants largely depends on the price of natural gas.
“In a world of low natural gas prices, you may see nuclear plants retire early, and that has important implications for emissions,” said Bistline. “Even if you electrify, if nuclear units are replaced by a combination of gas and solar, the result is higher emissions than if the nuclear plants were running.”
“The EPRI study opened my eyes to the importance of the transportation sector, and it has informed us as we consider new approaches to reduce emissions and improve air quality while keeping costs down,” said Clark.
Though Oglethorpe doesn’t set rates or provide incentives to promote the use of electric technologies among the customers of its 38 cooperative members, Clark and others at Oglethorpe are using insights from the study to inform the members about implementing new technologies. “The study has increased our interest in accelerating the adoption of EVs,” said Clark. “It has also caused us to look at ways to promote other electric end-use technologies like heat pumps and to provide information to members about which specific technologies might be of interest among their customers, given Georgia’s climate and market.”
The results are informing four divisions at Southern Company: end-use research and development, environmental affairs, load forecasting, and long-range planning. “These groups decided to support the EPRI analysis because they thought that they could gain something useful that would help them do their jobs better,” said Charles Rossmann, Southern Company’s forecasting and model development manager.
According to Rossmann, a particularly helpful outcome of the study was a detailed breakdown of how a wide range of industries uses energy, including electricity and other fuels. It also assessed the economic potential of existing electrification technologies and end uses that could become economically viable in the future, such as indoor agriculture and autonomous vehicles.
“For our end-use R&D staff, the study helps clarify how much electrification potential there is,” said Rossmann. “It also helps us understand which end uses we should be promoting for electrification and which end uses have less potential.”
That understanding will help inform the utility’s long-term planning, investment decisions, and communication with regulators. In fact, Southern Company has incorporated the study’s various scenarios into its load forecasting and long-term planning efforts. “Having a solid analysis like this is important to support internal decision-making and as we develop scenarios for long-term planning over the next couple of decades,” said Rossmann. “This is already helping as we look at what aggressive electrification would mean for load growth and the steps we would have to take to be ready for it.”