Going Local with Electrification

Expanding on Its Landmark U.S. National Electrification Assessment, EPRI Investigates Opportunities at the State and Provincial Level

By Chris Warren

EPRI’s U.S. National Electrification Assessment concluded that electrification is likely to increase in the future, leading to various potential benefits including cost-effective, economy-wide CO₂ reductions—and it has now emerged as something of a launch pad for 17 utilities in 13 states and 1 province to assess electrification’s potential for their region. The trend is clear: Electrification in the United States has increased from 3% of final energy use in 1950 to more than 20% today. The assessments are bringing a local focus to the big questions that have emerged with respect to electrification, cost, efficiency, emissions, and other areas of broad social concern.

As part of the National Electrification Assessment, researchers used the U.S. Regional Economy, Greenhouse Gas, and Energy (US-REGEN) model to examine four scenarios regarding the role of electricity in America’s future energy system. The study varied assumptions for technology costs and performance (such as the pace of electric vehicle price declines) and carbon prices reflecting potential climate policies. In the “conservative” and “reference” scenarios, no price is levied on CO₂ emissions. The “progressive” scenario put an energy-system-wide price of $15 per ton on CO₂ beginning in 2020, with the price rising 7% per year. The “transformation” scenario priced CO₂ at $50 per ton beginning in 2020—also with a 7% annual increase—and estimated that electricity would account for nearly 50% of final energy use by 2050.

U.S. National Assessment key insights:

• While final energy use has generally risen throughout history and most analyses project increasing final energy consumption for decades to come, all four scenarios in EPRI’s assessment show a sustained decrease as a result of enhanced energy system efficiency and electrification. This is driven by improved efficiency in end use technologies, such as lighting and internal combustion engines, along with a shift from non-electric to electric technologies that tend to use one-quarter to one-half as much energy to provide the same or better service.
• All four scenarios demonstrate how electrification can curb carbon emissions. The reference scenario, with no carbon policy, projects a near 20% reduction in CO₂ emissions between 2015 and 2050 as a result of efficiency gains and increased electrification. In the transformation scenario, emissions over the same time period decrease by about 70%.
• Increasing natural gas, wind, and solar generation have lowered the carbon intensity of electricity generation in the United States by 28% since 2005. All four scenarios project continued growth of wind and solar generation, driven by price declines and current state and federal policies.
• To enable electrification, manufacturers will need to innovate and lower technology costs, and companies will need to provide the charging and other electric infrastructure.

The assessment includes a menu of policy, research, regulatory, and market actions that are needed to harness the societal benefits outlined in the scenarios.

To expand on the national assessment and provide practical and actionable insights for the power industry, EPRI has embarked on similar analyses at the state level. “Power companies operate at the state level, which can have varying energy market dynamics, energy resources, building stock, climate, air quality, emissions policies, and economics,” said Francisco de la Chesnaye, the EPRI senior program manager who directs energy system analysis. “Targeting these in our next round of assessments will lead to more actionable results.”

EPRI has launched assessments with 17 utilities in 13 states and 1 Canadian province, including California, New York, Georgia, Alabama, Pennsylvania, and Ontario. Research questions include:

• What is the value of efficient electrification?
• What are the drivers of efficient electrification?
• As electrification expands, how will electricity demand change across various sectors, geographic areas, and end uses?
• At the state level, what will electricity generation, transmission, and end-use energy consumption look like in the future?
• What research is needed to enable efficient electrification and inform effective electrification policies and utility programs?

Research participants can draw on their knowledge of state attributes and dynamics to inform more effective modeling. “We work collaboratively with the participants to customize our models so that they more accurately represent their state’s electricity and energy end-use systems,” said de la Chesnaye. “Within EPRI, this effort crosses research boundaries. We’re involving our experts in energy and environmental analysis, air quality, energy utilization, and grid operations.”

How Assessments Are Done

The two-year state-level assessments are quantifying unique local characteristics that can impact electrification opportunities. These include end-use energy demand in the transportation, industrial, commercial, and residential sectors. “You need to understand each state’s economic makeup,” said de la Chesnaye. “For example, how does consumption in manufacturing compare with that of the service sector? How are buildings heated and cooled? Is natural gas available? It very much matters where you are in the country because the performance and economics of heat pumps versus natural gas furnaces vary by climate zone.”

The assessments consist of four tasks:

1. Use the US-REGEN model to quantify the potential extent of efficient electrification in participant-defined scenarios with various assumptions for technology cost and performance, policies (such as greenhouse gas emissions targets), and other factors.
2. Examine the impacts of various electrification levels on air quality, greenhouse gas emissions, and water quality. This can inform environmental policies.
3. Assess how new loads and resources associated with electrification could impact transmission system operations and planning.
4. Provide utility-specific guidance on how to implement technologies and programs cost-effectively to realize benefits of electrification.

With the first task already completed for several state-level assessments, a significant takeaway has emerged. “The power sector in a state can help drive down CO₂ emissions from that state’s economy in a cost-effective manner,” said de la Chesnaye. “That is a key message and insight for policymakers, the public, and power industry stakeholders.”

Another early insight: While many differences are emerging among state analyses, the national finding that electrification can provide significant value to society remains consistent across current projects. State-level electrification can reduce greenhouse gas emissions, final energy consumption, and energy costs.

“As in the national assessment, the state-level studies are showing that transportation is the most cost-effective, near-term opportunity for efficient electrification,” said de la Chesnaye. “The potential contribution of the building and industrial sectors varies widely by state and tends to occur later.”

A key factor for each state is its climate zone (or zones) and the related impact on electric technologies’ performance. “Temperature affects not only the efficiency of heat pumps, but also the performance of batteries for electric vehicles,” he said. “Battery performance in turn affects the economics of operating an electric vehicle and its cost-competitiveness with vehicles powered by internal combustion engines.”

EPRI aims to expand the assessments to more states and more countries. “We hope to offer this cutting-edge capability to as many power companies as we can so that they and their customers can realize the many benefits of efficient electrification,” said de la Chesnaye.

Artwork and chart by David Foster Graphics

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