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U.S. energy technology and policy needs an all-of-the-above approach, experts say

Dec 14, 2020
Precourt Institute

By Kate Gibson

With a new year approaching, which promising technologies and policy priorities are needed to reduce carbon emissions across U.S. energy systems? The answer may be all of them, according to a panel of Stanford University experts. Certainly, no silver bullet will solve the energy and climate challenge.

In its last session of 2020, Stanford’s Global Energy Dialogues hosted a wide-ranging conversation that explored a plethora of potential solutions that could help the United States achieve a clean energy transition. The nine-person panel discussed the need for improved energy efficiency, grid-scale reliability and flexibility as we rely much more on renewable energy, and the importance of additional electrification. They also considered policy measures needed to support new technologies, including regulations, market structures and financing.

“There is no such thing as a plug-and-play solution,” said Thomas Jaramillo, associate professor of chemical engineering. Rather than looking for one, we should ask ourselves what the future looks like from a variety of perspectives, including technology, business, finance and public policy. 

“That's what we should be aligning our efforts towards as opposed to trying to just simply replace what we've got in the ground now,” he said.

Grid-scale reliability and flexibility

Deep reductions in the cost of wind and solar electric power generation have made it possible to deploy those resources at large scale, and that contribution will continue.  As we increase our renewable energy resources and electrify many more energy services, we will need to ensure the reliability of our electricity supply.

Energy storage can help, though the current cost of batteries needs to decline 90 percent to provide year-round reliability for the grid affordably, according to Yi Cui, professor of materials science and engineering.

“We don’t know how to do that yet,” he said.

Natural gas also has a critical role to play as an enabler for renewables, said Mark Zoback, director of the Stanford Natural Gas Initiative. 

 “The intermittency of renewables is a real fact,” said Zoback, who is also a professor of geophysics. We will need daily and seasonable back up for renewables at a massive scale, he added.

Renewables coupled with storage cannot yet give us the “24/7/365 reliability” we need, agreed Sally Benson, professor of energy resources engineering. Benson and Zoback concurred that carbon capture and storage technologies can be paired with natural gas to reduce emissions.

“Natural gas isn’t the end game,” said Zoback, but is likely to be with us for a couple of decades.

The panel also discussed energy flexibility opportunities, such as technologies that allow electric vehicles to provide backup power to the grid and smart devices for buildings that automatically run when electricity supplies are plentiful and low-cost.

“Overall, we will need to move from supply-meets-demand paradigm to one of flexible matching of resources,” said Ram Rajagopal, associate professor of civil and environmental engineering.

Such smart buildings can be connected to the grid to create a building block for renewables and storage demand response, said Dian Grueneich, an energy scholar at the Precourt Institute for Energy.

Next-level electrification and decarbonization

The electrification of the U.S. transportation sector is particularly important, as it accounts for about 28 percent of U.S. greenhouse gas emissions, according to Deborah Sivas, professor of environmental law.

Over the past decade, the cost of battery packs for EVs has decreased eightfold, leading to an explosion in new EV models. Cui called this a reason to celebrate, but noted that we need to see a significant increase in production and decrease in cost for lithium-ion batteries. Such breakthroughs are coming, Cui and Sivas agreed.

We will also need technologies that will decrease or abate the emissions of sectors that are currently hard to decarbonize. For example, a massive market for hydrogen exists, explained Jaramillo, but it is largely produced using fossil fuels. Developing sustainable hydrogen production methods can open it to future uses like transportation and grid-scale energy.

Carbon capture and storage could also play a key role by reducing the emissions of hard-to-carbonize sectors like cement and steel, said Benson. 

“We just don’t have good substitutes for those technologies today and we can’t afford to wait,” she said.

The role of policy

“Technology is crucially important,” said Lynn Orr, professor emeritus in energy resources engineering, but equally and possibly more important “is the combination of policy tools that we need to implement” changes to our energy system.

While the United States is unlikely to see a carbon tax soon, according to Orr, the good news is that there are other options, including regulatory systems, market structures and financing.

In transportation, such regulation is largely being driven by the states, most notably California, said Sivas. California’s ability to set its own fuel standards was recently challenged by the federal government, but this is likely to change with the incoming administration.

“Hopefully the federal government is going to step in and really step up on fuel economy standards,” said Sivas.

Wholesale energy markets, which facilitate the transparent buying and selling of utility-scale electricity, can be critical for lowering costs and encouraging renewables.

 “We need a lot of change in our markets,” said Grueneich, who also served on the California Public Utilities Commission. Wholesale markets do not exist everywhere and can be hard to establish. Furthermore, such markets were not designed with renewable energy in mind.

 In a carbon-constrained world, we need to think about how "markets evolve so that they're working in sync with our climate policies and not at odds,” she said.

Finance and risk

The United States and other countries are doing a good job at building clean power plants, but are “not closing down the fossil infrastructure at nearly the pace which is necessary,” said Thomas Heller, director of The Precourt Institute’s Sustainable Finance Initiative. Climate action has increasingly become a question of measuring and managing risk.

Finance is “really about the structuring and distribution of risk,” said Heller, who is also a professor emeritus at Stanford Law School.

Short-run physical climate risks – from fires and hurricanes, for example – are basically locked in due to our already warming climate, Heller said. Because of this, we need to prioritize transition risks, like the value of assets and the know-how of workers.

“The long-run physical risk is a function of how we manage the mid-term transition risks,” he said. “They are not separate.”

The Stanford Global Energy Dialogues series will return in 2021.

The Global Energy Dialogues are funded by the Stanford Global Energy Forum.