Factors hindering the US from achieving a net-zero power sector by 2035

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Although US President Joe Biden has set an ambitious target to have a net-zero power sector by 2035, a wide range of factors are likely to hinder the country from achieving the goal, according to research firm Wood Mackenzie.

“We believe the US will struggle to achieve its ambitious goals,” states the research firm in a new paper, citing factors including technological limitations, policy design, market structures, and political and constitutional foundations.

Brian McIntosh, director of North America Power Services at Wood Mackenize, said: “Based on our understanding of technologies, market policies, the challenges of quickly building transmission lines, and the electrification of energy, we believe that 66% clean generation by 2035 is more feasible.”

Efforts to be implemented by the US to achieve the goal will only enable the country to greatly reduce its carbon footprint but not achieve a net-zero emissions power sector.

In addition, the US will witness a decrease in wind and solar power prices owing to proposed policies and financial incentives and the continued competitiveness of renewables, states Wood Mackenzie in the One giant leap: President Biden’s vision for repowering America report. This will follow a 2021 increase in prices across all solar segments due to supply chain constraints.

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To achieve the 2035 goal, “wind and solar power would have to become the largest sources of generation by 2035, alongside massive expansion in carbon capture and zero-carbon hydrogen,” according to David Brown, head of Markets and Transitions at Wood Mackenzie. “The remaining gas-fired power plants will need to be fitted with carbon capture and storage, but the technology’s ability to deal with large-scale carbon emissions in the power sector needs to be proven.”

Solutions such as energy storage and demand-side management that help ensure grid reliability and resilience are still expensive and will need to be inexpensive for the 2035 goal to be a reality, according to the study.

The US will need to increase its storage capacity for captured carbon from 25 million tonnes per annum today to 1 billion tonnes per annum by 2050 to achieve a net-zero economy. The captured carbon will be required to back up renewables, even in a net-zero scenario, according to Wood Mackenzie. Increased investments from the public and private sectors are vital in hydrogen infrastructure development for the US to meet the 2035 net-zero power sector goal.

McIntosh added: “A multi-day storage solution is needed in a net-zero world, but we think we can expect no more than 10 to -15-hour durations from battery storage by 2035.”

However, the goal set by the US Department of Energy to reduce the cost of long-duration energy storage technologies by 90% by 2030 might help expand available solutions and deployment.

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Total energy demand would have to peak at the end of 2021 and the electrification of buildings and deployment of energy efficiency accelerated to meet the 2035 target, states Wood Mackenzie.

Speeding up electric vehicle adoption will also be vital although an increase in EV use will expand consumer energy usage by 20-30% by 2030. However, optimised EV charging can be used to reduce EVs straining grid networks. This is where solutions such as demand response, Time of Use tariffs, and Vehicle-to-Grid can be used to ensure grid resilience.

Wood Mackenzie reiterates that to achieve a net-zero power sector by 2035 and a zero-emissions economy by 2050, the US will need to add $10 trillion to its proposed spending on climate mitigation in areas including:

  • cross-state infrastructure for high-voltage power transmission; 
  • a carbon abatement-cost fund to support carbon removal capacity, such as CCUS, DAC and low-carbon hydrogen; 
  • energy storage technologies for both long-duration solutions in the power sector and for distributed, behind-the-meter, demand-side management. 

Find out more about the Wood Mackenzie report.