Open Source Energy System Modeling Using Break-Even Costs to Inform State-Level Policy: A North Carolina Case Study

Area of Science:

• Energy Systems Analysis
• Climate Policy
• Environmental Economics

Background:

• State-level energy and climate policies require rigorous model-based analysis for effective implementation.
• The North Carolina electric power sector faces evolving challenges in electricity generation and carbon emissions.

Purpose of the Study:

• To examine future electricity generation, CO2 emissions, and abatement costs in North Carolina through 2050 using an open-source energy system model.
• To develop and apply a novel method for calculating break-even costs to inform technology investment and policy development.
• To analyze the impact of various policy scenarios, including CO2 caps and renewable portfolio standards.

Main Methods:

• Utilized an open-source energy system optimization model with publicly available datasets.
• Developed a new methodology for calculating break-even costs for energy technologies.
• Simulated multiple scenarios incorporating uncertainties in fuel prices, CO2 caps, and renewable portfolio standards.

Main Results:

• Solar photovoltaics emerged as the most cost-effective low-carbon technology across modeled scenarios.
• Trade-offs in carbon-constrained scenarios primarily involved natural gas and renewable energy sources.
• Break-even cost analysis revealed significant variations across technologies and scenarios, providing insights for policy calibration.

Conclusions:

• Model-based analysis offers crucial guidance for policymakers in the energy sector.
• Break-even cost insights can effectively inform the design of policies like renewable portfolio standards.
• Calibrating tax credits based on break-even costs, such as for onshore wind, may lead to shifts among renewables without substantial CO2 reduction.