Water Availability for Shale Gas Development in Sichuan Basin, China.

Unconventional shale gas development holds promise for reducing the predominant consumption of coal and increasing the utilization of natural gas in China. While China possesses some of the most abundant technically recoverable shale gas resources in the world, water availability could still be a limiting factor for hydraulic fracturing operations, in addition to geological, infrastructural, and technological barriers. Here, we project the baseline water availability for the next 15 years in Sichuan Basin, one of the most promising shale gas basins in China. Our projection shows that continued water demand for the domestic sector in Sichuan Basin could result in high to extremely high water stress in certain areas. By simulating shale gas development and using information from current water use for hydraulic fracturing in Sichuan Basin (20,000-30,000 m(3) per well), we project that during the next decade water use for shale gas development could reach 20-30 million m(3)/year, when shale gas well development is projected to be most active. While this volume is negligible relative to the projected overall domestic water use of ∼36 billion m(3)/year, we posit that intensification of hydraulic fracturing and water use might compete with other water utilization in local water-stress areas in Sichuan Basin.

Residential Solar PV Systems in the Carolinas: Opportunities and Outcomes.

This paper presents a first-order analysis of the feasibility and technical, environmental, and economic effects of large levels of solar photovoltaic (PV) penetration within the services areas of the Duke Energy Carolinas (DEC) and Duke Energy Progress (DEP). A PV production model based on household density and a gridded hourly global horizontal irradiance data set simulates hourly PV power output from roof-top installations, while a unit commitment and real-time economic dispatch (UC-ED) model simulates hourly system operations. We find that the large generating capacity of base-load nuclear power plants (NPPs) without ramping capability in the region limits PV integration levels to 5.3% (6510 MW) of 2015 generation. Enabling ramping capability for NPPs would raise the limit of PV penetration to near 9% of electricity generated. If the planned retirement of coal-fired power plants together with new installations and upgrades of natural gas and nuclear plants materialize in 2025, and if NPPs operate flexibly, then the share of coal-fired electricity will be reduced from 37% to 22%. A 9% penetration of electricity from PV would further reduce the share of coal-fired electricity by 4-6% resulting in a system-wide CO2 emissions rate of 0.33 to 0.40 tons/MWh and associated abatement costs of 225-415 (2015$ per ton).

The impacts of wind power integration on sub-daily variation in river flows downstream of hydroelectric dams.

Due to their operational flexibility, hydroelectric dams are ideal candidates to compensate for the intermittency and unpredictability of wind energy production. However, more coordinated use of wind and hydropower resources may exacerbate the impacts dams have on downstream environmental flows, that is, the timing and magnitude of water flows needed to sustain river ecosystems. In this paper, we examine the effects of increased (i.e., 5%, 15%, and 25%) wind market penetration on prices for electricity and reserves, and assess the potential for altered price dynamics to disrupt reservoir release schedules at a hydroelectric dam and cause more variable and unpredictable hourly flow patterns (measured in terms of the Richards-Baker Flashiness (RBF) index). Results show that the greatest potential for wind energy to impact downstream flows occurs at high (∼25%) wind market penetration, when the dam sells more reserves in order to exploit spikes in real-time electricity prices caused by negative wind forecast errors. Nonetheless, compared to the initial impacts of dam construction (and the dam's subsequent operation as a peaking resource under baseline conditions) the marginal effects of any increased wind market penetration on downstream flows are found to be relatively minor.

Environmental implications of United States coal exports: a comparative life cycle assessment of future power system scenarios.

Stricter emissions requirements on coal-fired power plants together with low natural gas prices have contributed to a recent decline in the use of coal for electricity generation in the United States. Faced with a shrinking domestic market, many coal companies are taking advantage of a growing coal export market. As a result, U.S. coal exports hit an all-time high in 2012, fueled largely by demand in Asia. This paper presents a comparative life cycle assessment of two scenarios: a baseline scenario in which coal continues to be burned domestically for power generation, and an export scenario in which coal is exported to Asia. For the coal export scenario we focus on the Morrow Pacific export project being planned in Oregon by Ambre Energy that would ship 8.8 million tons of Powder River Basin (PRB) coal annually to Asian markets via rail, river barge, and ocean vessel. Air emissions (SOx, NOx, PM10 and CO2e) results assuming that the exported coal is burned for electricity generation in South Korea are compared to those of a business as usual case in which Oregon and Washington's coal plants, Boardman and Centralia, are retrofitted to comply with EPA emissions standards and continue their coal consumption. Findings show that although the environmental impacts of shipping PRB coal to Asia are significant, the combination of superior energy efficiency among newer South Korean coal-fired power plants and lower emissions from U.S. replacement of coal with natural gas could lead to a greenhouse gas reduction of 21% in the case that imported PRB coal replaces other coal sources in this Asian country. If instead PRB coal were to replace natural gas or nuclear generation in South Korea, greenhouse gas emissions per unit of electricity generated would increase. Results are similar for other air emissions such as SOx, NOx and PM. This study provides a framework for comparing energy export scenarios and highlights the importance of complete life cycle assessment in determining net emissions effects resulting from energy export projects and related policy decisions.

Fuel prices, emission standards, and generation costs for coal vs natural gas power plants.

Low natural gas prices and stricter, federal emission regulations are promoting a shift away from coal power plants and toward natural gas plants as the lowest-cost means of generating electricity in the United States. By estimating the cost of electricity generation (COE) for 304 coal and 358 natural gas plants, we show that the economic viability of 9% of current coal capacity is challenged by low natural gas prices, while another 56% would be challenged by the stricter emission regulations. Under the current regulations, coal plants would again become the dominant least-cost generation option should the ratio of average natural gas to coal prices (NG2CP) rise to 1.8 (it was 1.42 in February 2012). If the more stringent emission standards are enforced, however, natural gas plants would remain cost competitive with a majority of coal plants for NG2CPs up to 4.3.

Reducing the energy penalty costs of postcombustion CCS systems with amine-storage.

Carbon capture and storage (CCS) can significantly reduce the amount of CO(2) emitted from coal-fired power plants but its operation significantly reduces the plant's net electrical output and decreases profits, especially during times of high electricity prices. An amine-based CCS system can be modified adding amine-storage to allow postponing 92% of all its energy consumption to times of lower electricity prices, and in this way has the potential to effectively reduce the cost of CO(2) capture by reducing the costs of the forgone electricity sales. However adding amine-storage to a CCS system implies a significant capital cost that will be outweighed by the price-arbitrage revenue only if the difference between low and high electricity prices is substantial. In this paper we find a threshold for the variability in electricity prices that make the benefits from electricity price arbitrage outweigh the capital costs of amine-storage. We then look at wholesale electricity markets in the Eastern Interconnect of the United States to determine profitability of amine-storage systems in this region. Using hourly electricity price data from years 2007 and 2008 we find that amine storage may be cost-effective in areas with high price variability.

Cost of wind energy: comparing distant wind resources to local resources in the midwestern United States.

The best wind sites in the United States are often located far from electricity demand centers and lack transmission access. Local sites that have lower quality wind resources but do not require as much power transmission capacity are an alternative to distant wind resources. In this paper, we explore the trade-offs between developing new wind generation at local sites and installing wind farms at remote sites. We first examine the general relationship between the high capital costs required for local wind development and the relatively lower capital costs required to install a wind farm capable of generating the same electrical output at a remote site,with the results representing the maximum amount an investor should be willing to pay for transmission access. We suggest that this analysis can be used as a first step in comparing potential wind resources to meet a state renewable portfolio standard (RPS). To illustrate, we compare the cost of local wind (∼50 km from the load) to the cost of distant wind requiring new transmission (∼550-750 km from the load) to meet the Illinois RPS. We find that local, lower capacity factor wind sites are the lowest cost option for meeting the Illinois RPS if new long distance transmission is required to access distant, higher capacity factor wind resources. If higher capacity wind sites can be connected to the existing grid at minimal cost, in many cases they will have lower costs.

Economic and environmental costs of regulatory uncertainty for coal-fired power plants.

Uncertainty about the extent and timing of CO2 emissions regulations for the electricity-generating sector exacerbates the difficulty of selecting investment strategies for retrofitting or alternatively replacing existent coal-fired power plants. This may result in inefficient investments imposing economic and environmental costs to society. In this paper, we construct a multiperiod decision model with an embedded multistage stochastic dynamic program minimizing the expected total costs of plant operation, installations, and pollution allowances. We use the model to forecast optimal sequential investment decisions of a power plant operator with and without uncertainty about future CO2 allowance prices. The comparison of the two cases demonstrates that uncertainty on future CO2 emissions regulations might cause significant economic costs and higher air emissions.

Should a coal-fired power plant be replaced or retrofitted?

In a cap-and-trade system, a power plant operator can choose to operate while paying for the necessary emissions allowances, retrofit emissions controls to the plant, or replace the unit with a new plant. Allowance prices are uncertain, as are the timing and stringency of requirements for control of mercury and carbon emissions. We model the evolution of allowance prices for SO2, NOx, Hg, and CO2 using geometric Brownian motion with drift, volatility, and jumps, and use an options-based analysis to find the value of the alternatives. In the absence of a carbon price, only if the owners have a planning horizon longer than 30 years would they replace a conventional coal-fired plant with a high-performance unit such as a supercritical plant; otherwise, they would install SO2 and NOx, controls on the existing unit. An expectation that the CO2 price will reach $50/t in 2020 makes the installation of an IGCC with carbon capture and sequestration attractive today, even for planning horizons as short as 20 years. A carbon price below $40/t is unlikely to produce investments in carbon capture for electric power.