Decarbonising the US power sector would require investing trillions to bankroll a colossal energy storage effort, according to Wood Mackenzie.
New analysis by the firm estimates achieving a fully renewable US electricity system would cost US$4.5 trillion over the next one to two decades, a “staggering” US$35,000 per household.
Of the overall bill, US$2.5 trillion would need to be spent on installing 900GW energy storage capacity, the volume identified by Wood Mackenzie as the necessary minimum to ensure wind and solar are available exactly when needed.
At US$1.5 trillion, Wood Mackenzie predicted, adding solar and wind at the scale required – 1,600GW – would be a comparatively cheaper effort for the US. Transmission upgrades would set the country back some US$500 billion.
In its present state, the firm argued, the storage supply chain remains inadequate to deliver a zero-carbon power system. Only 5.5GW of battery systems is up-and-running or under construction worldwide and what little is operational is too short-term to balance seasonal swings, it added.
Dan Shreve, Wood Mackenzie’s head of global wind research, said a fully renewable power system entails challenges “far beyond” new generating assets. It will require, he argued, a “substantial” shift from “traditional energy-only constructs” to a capacity-style market.
Opening the door to natural gas, nuclear
Given the scale of the challenge, Wood Mackenzie recommended a patient, flexible approach.
Pushing decarbonisation goalposts from 2030 to 2040 or 2050 would create room for emerging innovations – flow batteries, demand response, renewable hydrogen, carbon capture and storage – to mature and reach commercial scale.
Success with decarbonisation would also be helped along by a lenient stance with natural gas, Wood Mackenzie said. Having existing plants cover 20% of the US’ power mix – rather than opting for a fully renewable system – would make the roll-out of clean energy and storage cheaper by a respective 20% and 60%, the firm added.
According to the analysis, the zero-carbon agenda would also benefit from involving nuclear, which presently accounts for 60% of all US clean energy flows. Including existing installations in a decarbonised mix would save US$500 billion in investment in solar and wind, Wood Mackenzie said.
The focus on decarbonisation costs comes as US clean energy players fight to keep up the momentum towards raising a trillion dollars by 2030. As reported by sister publication PV Tech, the aspiration is threatened by looming policy vacuums.
Incentives to solar have become a particular campaign issue for Democratic candidates vying to unseat Donald Trump at next year’s elections. Elizabeth Warren and 19 other senators recently urged for a continuation of investment tax credits until alternative incentives are found.
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