Highlights

• Electricity competition in the EPPA model is modified to represent technology value.

• Representing the value of technology alongside cost impacts VRE deployment.

• When VRE costs are varied by ∼ 35%, VRE share spans IPCC “lower 2C” scenario range.

• VRE costs affect the demand for electricity, final energy and primary energy.

• Demand for fuels other than electricity is relatively insensitive to VRE assumptions.

Abstract: While rapid deployment of variable renewable energy (VRE) technologies, namely wind and solar PV, is often projected in 2C pathways generated by integrated assessment models, there is a wide range in projected VRE deployment by mid-century. Such differences could be the result of differences in assumptions about future technology costs and/or differences in model approaches for capturing other aspects of technology competitiveness.

Here we introduce a consistent competitiveness metric, profitability-adjusted levelized cost of electricity (or PLCOE), to an integrated assessment model (EPPA) to evaluate the representation of technology competition, including VRE, in low-emission scenarios. We show that representing the value of technology (alongside cost) may significantly impact VRE deployment relative to scenarios without such an adjustment. In addition, we show that varying VRE costs by about 35% in 2050 results in differences in VRE deployment that span much of the range in outcomes (over the same period) observed in likely 2C scenarios assessed by the IPCC, suggesting that both cost and value are key drivers of VRE deployment in such scenarios.

Given the central role that VRE technologies play in the electricity mix across most scenarios, we also find that alternative cost assumptions for VRE technologies can lead to changes in electricity prices, the associated demand for electricity, and total final and primary energy consumption. However, the demand for fuels other than electricity is relatively insensitive to VRE assumptions in the 2C scenarios considered here.

Abstract: We analyze temperature implications of energy security-focused scenarios developed by Shell. The Sky 2050 scenario explores the world developing in increasingly sustainable directions, with the corresponding energy needs for a global net-zero CO2 target achieved by the year 2050.  In contrast, the Archipelagos scenario sees the ongoing energy transition facing a mixture of support and hindrance by geopolitics and security steady technological development continues. Using the MIT Integrated Global System Modeling (IGSM) framework, we simulate 400-member ensembles, reflecting uncertainty in the Earth system response, of global temperature change associated with each scenario relative to pre-industrial (mean of 1850-1900) levels. Our analysis shows that the Sky 2050 scenario is an overshoot 1.5°C scenario (category C2 by the definition of the Intergovernmental Panel on Climate Change). Global surface temperature (ensemble median) in this scenario stays above 1.5°C for 40 years, from 2034 to 2073, reaches its peak of 1.67°C in 2051, and then declines to 1.24°C by 2100. For the Archipelagos scenario, mean temperature passes 1.5°C in 2033, 2°C in 2060, and reaches 2.22°C in 2100. We find that likely (33-66%) range in 2100 is 1.16-1.33°C for the Sky 2050 scenario and 2.10-2.33°C for the Archipelagos scenario. The corresponding very likely (5%-95%) ranges are 0.97-1.56°C and 1.73-2.72°C, respectively.