- Dec 16, 2022 3:43 pm GMT
There are three closely-followed energy sector megatrends: decarbonization, electrification and grid modernization. While all three are related, the connection between decarbonization and electrification warrants a closer look as they are inextricably linked.
Decarbonization refers to reducing the reliance on carbon-based fuels, thereby reducing overall carbon dioxide (CO2) released into the atmosphere. Electrification is the conversion of non-electric end-use equipment to electric end-use equipment. These conversions may take place in transportation, industrial, commercial or residential settings. For instance, it might look like driving an electric car rather than a gas-powered car, or it could be transitioning an industrial belt-drive powered by steam to one powered by an electric motor.
Decarbonization and electrification go hand in hand. In general, when consumers use electrical equipment (also known as “demand side”), it has greater energy efficiency than its corresponding fossil-fuel counterpart. This is particularly true in the transportation sector. The energy efficiency of a typical gasoline car is in the range of 20–30%, meaning only 20–30% of the fuel’s energy is delivered as power to the wheels. The remaining energy is primarily lost as heat from the engine. In contrast, electric vehicles (EV) transfer over 75% of the electric energy to power the wheels. With that increased efficiency, even EVs charged with electricity generated by fossil fuel have far lower “beyond tailpipe” greenhouse gas (GHG) emissions than gasoline-powered vehicles.
For example, a 2021 Chevrolet Bolt emits 140 grams (g) of CO2 per mile traveled if the vehicle is charged using the average U.S. electricity generating fuel mix [i]. A comparable gasoline-powered vehicle, the 2021 Chevrolet Spark, is able to achieve a combined city/highway fuel economy of 33 miles per gallon, roughly 266 g of CO2 per mile. In comparison, the “beyond tailpipe” emissions of the electric Bolt are approximately 47% lower than that of the gas-powered Spark.
These trends also apply to heating and cooling systems. New high-efficiency gas-fired furnaces may boast 95% efficiency—meaning 95% of the fuel’s energy is converted to useful heat. Sounds great, right? Consider, however, that a typical electrical “resistance” heater offers 100% energy efficiency, meaning all of the electrical energy is converted to useful heat. Electric heat pumps are able to far exceed that by using refrigerants to move heat from the outside air to the inside (yes, heat even exists at air temperatures below freezing). This increases the efficiencies to more than 100%—even up to 300% and more in some conditions. Heat pumps can also move heat from the inside to the outside, providing extremely efficient cooling as well. The decarbonizing result is that demand-side applications offer significantly more efficiency, resulting in lower system-wide GHG emissions.
Consider this scenario: a home in the northern U.S. uses an older propane-fired boiler for heat. This boiler has an efficiency rating of 85%. The boiler uses approximately 800 gallons of propane each year, resulting in 10,000 pounds of CO2 emissions. To replace the propane-fired boiler, the home is electrified with a multi-zone heat pump system. The high-efficiency heat pump uses about 9,000 kilowatt-hours of electricity per year to provide the same heating capacity. Assuming the electricity comes from an average U.S. fuel mix, the new system adds 8,500 pounds of CO2 emissions annually, meaning the overall CO2 emissions from the electrified heating system are about 15% lower than the boiler.
Electric Power Generation Sources
Now that demand-side electrification has been explained, let’s look at how it impacts energy generation. The National Renewable Energy Laboratory (NREL) conducted an Electrification Futures Study [ii] and determined that in order to meet the needs of a high electrification scenario, power generation capacity needs to double between now and 2050. While electrification will undoubtedly cause an increase in overall electricity consumption, the significant increase in the magnitude of peak demand loads will drive the need for additional generating capacity. Further complicating the issue as we increasingly invest in and rely on renewables sources of electrical generation is their variable and intermittent reliability—the sun doesn’t always shine and the wind doesn’t always blow. Consequently, even with significant additions of renewable generating capacity, we must also increase other forms of generating capacity, as well as energy storage capacity.
Another result of electrification is the shift of fossil fuel usage away from residential and commercial end users (particularly natural gas). This shift away from this end-user consumption will increase the amount of natural gas available for industrial and utility-scale power plants, making natural gas generation more cost competitive. In addition to this cost-competitiveness, additional natural gas-fired power plants will be necessary to support electrification. Looking at the big picture, natural gas generating capacity is projected to increase as older, higher-emitting generating sources such as coal retire.
Peak Power Demand and Flexibility
A major factor to consider when discussing electrification is demand-side flexibility. This refers to the portion of the overall electrical demand that can either be reduced, increased or shifted in time or duration. Increased demand-side flexibility can result in reduced demand on power at peak times, which can then reduce the amount of future generating capacity additions. The same NREL Electricity Futures Study [ii] has shown that demand-side flexibility in a high-electrification scenario may reduce future needs for power generating capacity by nearly 100 gigawatts.
Demand-side flexibility can be incorporated into newly electrified end-use equipment. For example, smart EV chargers don’t automatically start recharging when initially connected. Instead, they recharge during an optimal, low energy demand time. Similarly, smart thermostats in homes and businesses may allow for temperatures to be more variable, helping reduce peak demand based upon regional conditions. Some grid operators already have the ability to control smart thermostats, and several utilities are offering smart thermostats for demand response purposes.
Additionally, demand-side flexibility could allow for a lower carbon-intensity level from the power generation sector. This reduction comes from both implementing various renewable energy sources and improving energy storage technology. NREL’s study [ii] concluded that high demand-side flexibility in a high electrification scenario could result in a 5–8% reduction in CO2 emissions from the energy system as a whole. In short, to fully utilize variable renewable generating sources to meet decarbonization goals, electricity consumers will need to be more flexible.
Environmental Benefits of Electrification
Electrical generation in the U.S. is already at a point where electrification alone helps lower CO2 emissions from the overall energy sector. As the electricity generating fuel mix shifts to lower-carbon fuels and renewables, the benefits of electrification on decarbonization further increase. The NREL Electrification Futures Study predicts that with high electrification, total annual CO2 emissions from the overall energy system can decrease significantly—up to 25% decrease in 2050 from current levels. Further reductions of up to 8% are possible with greater demand-side flexibility.
These emission reductions are not solely attributed to electrification. Rather, emission reductions will be the result of the electrification, decarbonization and grid modernization working together. Electricity will need to continue to be delivered to customers efficiently and reliably as we convert to electrical end-use equipment and reduce the reliance on carbon-based fuels. Each component relies on the others and we cannot support energy demand and move toward sustainability goals if any one component is removed.
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[i] United States Department of Energy (2021) Office of Efficiency & Renewable Energy Fuel Economy Calculator, https://www.fueleconomy.gov/mpg/MPG.do.
[ii] National Renewable Energy Laboratory (2021) Renewable Electricity Futures Study,https://www.nrel.gov/analysis/electrification-futures.html.
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