Climate-Induced Tradeoffs in Planning and Operating Costs of a Regional Electricity System.

Electricity grid planners design the system to supply electricity to end-users reliably and affordably. Climate change threatens both objectives through potentially compounding supply- and demand-side climate-induced impacts. Uncertainty surrounds each of these future potential impacts. Given long planning horizons, system planners must weigh investment costs against operational costs under this uncertainty. Here, we developed a comprehensive and coherent integrated modeling framework combining physically based models with cost-minimizing optimization models in the power system. We applied this modeling framework to analyze potential tradeoffs in planning and operating costs in the power grid due to climate change in the Southeast U.S. in 2050. We find that planning decisions that do not account for climate-induced impacts would result in a substantial increase in social costs associated with loss of load. These social costs are a result of under-investment in new capacity and capacity deratings of thermal generators when we included climate change impacts in the operation stage. These results highlight the importance of including climate change effects in the planning process.

Effects of Climate Change on Capacity Expansion Decisions of an Electricity Generation Fleet in the Southeast U.S.

The electric power sector in the United States faces many challenges related to climate change. On the demand side, climate change could shift demand patterns due to increased air temperatures. On the supply side, climate change could lead to deratings of thermal units due to changes in air temperature, water temperature, and water availability. Past studies have typically analyzed these risks separately. Here, we developed an integrated, multimodel framework to analyze how compounding risks of climate-change impacts on demand and supply affect long-term planning decisions in the power system. In the southeast U.S., we found that compounding climate-change impacts could result in a 35% increase in installed capacity by 2050 relative to the reference case. Participation of renewables, particularly solar, in the fleet increased, driven mostly by the expected increase in summertime peak demand. Such capacity requirements would increase investment costs by approximately 31 billion (USD 2015) over the next 30 years, compared to the reference case. These changes in investment decisions align with carbon emission mitigation strategies, highlighting how adaptation and mitigation strategies can converge.