Commodity Market Report
North America power & renewables long term outlook: Charting the likely energy transition path - the 'Federal Carbon' case
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Report summary
The Global Energy Transition, now under way, will move energy markets from the "Age of Oil & Gas" to the "Age of Power & Renewables". The pace of transition, in large part, is now leveraged to technology costs and the ability of power markets to incorporate emerging technologies like storage, electric vehicles on top of a rapid increase in renewables saturation.
Table of contents
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Executive summary
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Introduction
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The 'Federal Carbon' case explained
- US Carbon Tax Assumption
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Power market key takeaways H1 2018
- Regional Carbon Policy: more regions looking to pricing carbon or increase carbon targets in the absence of federal legislation
- Demand – grows by roughly the rate of population growth @0.7% p.a. implying flat per capita demand. Electrification starts introducing a new demand paradigm by the end of the study period
- Renewables (utility scale and distributed Solar + onshore and offshore Wind): from 8% of generation in 2018 to 40% of generation by 2040
- Coal retirements: By 2040, Canada has no coal capacity left while only 22% of the current US coal fleet survives
- Nuclear: Significant nuclear capacity exit post 2032 as many plants reach their 60 year life
- Natural Gas: Natural Gas capacity growth continues largely to replace coal power plants and to backstop renewables. Battery storage beats out new peakers by a 3:1 ratio
- Battery Storage (Grid scale): 150 GW of battery storage capacity by 2040, from negligible levels
- Hybrid Systems
- Battery Cost
- Renewable Technology LCOEs
- Fuel prices: below $3/mmbtu until 2026, below $4/mmbtu until early 2030s, approaches $5 by 2040
- Resource Adequacy: shift away from traditional baseload supply putting strain on existing generation fleet
- Transmission
- Power prices – long term carbon assumptions and higher overall gas prices in this period provide room for both price and renewables
- Power Plant Economics
- Conclusion
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The 'Federal Carbon' case explained
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Introduction
Tables and charts
This report includes 7 images and tables including:
- Chart 1: Power Sector decarbonization 7 – 12 years faster than anticipated
- Chart 2: 'Federal Carbon Case' Does not comply with soft INDC targets
- Chart 3: The case for electrification
- Chart 3: Battery Cost Forecast
- Executive summary: Image 5
- Chart 4: H1 2018 vs H2 2017 Forecast Henry Hub ($2018/mmbtu)
- Chart 5: Real $/MWh Average Market Price vs Real $/MWh technology-weighted prices
What's included
This report contains:
