Energy Systems and Climate Analysis (ESCA) Decarbonization Research
ESCA HISTORY
EPRI’s Energy Systems and Climate Analysis (ESCA) group and its predecessors have been conducting climate change and decarbonization research for nearly five decades, publishing many seminal peer-reviewed journal articles, reports, and books during this time.
ESCA timeline 1976 to present
1976—1996
1997—2010s
2014—present
Decarbonization Trends
Decarbonization rates may need to increase five to six times their historical pace to reach the 2030 U.S. climate target.
In 2023, greenhouse gas (GHG) emissions across the U.S. economy fell by 1.9% from 2022, while GDP grew by 2.4%, according to data from Rhodium. Since 2005, U.S. emissions declined by 18%, with the electric sector cutting emissions by 41%.
To reach the 2030 goal under the Paris Agreement to reduce GHG emissions by 50-52% from 2005, the U.S. may need to increase its decarbonization rate from 1 percentage point (p.p.) to 5-6 p.p. annually—a pace previously only seen during the 2009 recession and 2020 pandemic. The 5-6x speed is greater than the 3x acceleration EPRI highlighted in its 2021 report. This accelerated pace would need to continue to reach net-zero emissions around 2050.
Power sector CO2 declined 8% from 2022 to 2023. Coal generation was roughly 60% lower than its peak in the mid-2000’s (with a 17% share in 2023). Over 80% of economy-wide GHG reductions came from the power sector relative to 2005.
Transport emissions rose 2% in 2023, though they declined 3% from 2005. Electric vehicles were nearly 10% of 2023 sales and up 50% from 2022.
Residential and commercial buildings emissions dropped 4% in 2023 (down 9% from 2005) due to the mild winter.
Industrial emissions increased 1%.
Electrification—adopting electric end-use technologies instead of fossil-fueled alternatives—is a pillar of decarbonization pathways.
Early research by EPRI and others pointed to the role of direct electrification in reducing emissions from transport, buildings, and industry.
EPRI’s 2018 U.S. National Electrification Assessment and 2021 Canadian Assessment highlighted how electricity could grow from about 20% of final energy today to over 50% in 2050.
EPRI’s Net-Zero 2050 analysis showed the role of electrification and low-carbon fuel switching in reaching net-zero emissions.
Electrification lowers CO2 and improves air quality, which yields immediate and localized benefits. Decarbonization policy can amplify these trends.
Decarbonization opportunities and costs vary significantly between global regions and within the U.S.
Regional differences in resources (e.g., renewable and CO2 storage resources, inter-regional transmission, and gas systems) and future low-carbon alternatives lead to different decarbonization opportunities and costs.
Current conditions are not reliable indicators of decarbonization opportunities or risks.
Variable renewable energy—especially land-based wind and photovoltaic solar generation—is expected to play a large role in decarbonizing electricity systems, given dropping costs and growing policy support.
However, the economic value of additional wind and solar capacity decreases as their penetration rises. What matters is system costs and not levelized costs for single plants, which is why studies of deeply decarbonized power systems generally find a mix of low-emitting resources.
Unique economic characteristics of variable renewables, energy storage, and clean firm resources require detailed modeling to evaluate.
Supplying the same end-use services while using less energy
Improving
energy efficiency
Many low-emitting electricity generation, energy storage, transmission, and demand-side options can decarbonize power systems
Decarbonizing the power sector
Switching from fossil fuels to electricity for transportation and heat for buildings and industry
Electrifying end uses
Including bioenergy, carbon capture, hydrogen, advanced nuclear, and long-duration storage
Accelerating the innovation/deployment of emerging technologies
Mitigation opportunities include using productive lands for agriculture, reducing food waste, shifting diets, and improved management of croplands and pasture
Reducing land-related emissions
Decarbonization 101
There are several key takeaways from ESCA research on reaching net-zero emissions
Reaching Net-Zero Emissions:
Drivers
Inflation Reduction Act
Recent EPRI-led analysis of the Inflation Reduction Act (IRA) indicates that it can roughly double the economy-wide emissions reductions and clean electricity generation over the next decade.
Models suggest that economy-wide emissions may decline 43-48% by 2035 with IRA from 2005 levels (compared with 27-35% without IRA).
In addition to reducing emissions, IRA aims to make the clean energy transition more equitable and affordable—lowering energy costs by up to $400 annually per household by 2035.
IRA could accelerate clean energy deployment: Wind and solar capacity increases up to four times the pace without IRA; electric vehicles are 30-82% of new vehicle sales in 2035.
Electric Company Voluntary
Net-Zero Targets
Many electric companies have announced voluntary CO2 reduction targets, including goals to reach net-zero emissions from their generating units.
Approximately 90% of 2005 power sector emissions are subject to either a utility target or state emissions policy.
Company Targets
State Policies
Federal Policies
Performance Standards & Regulations
Stakeholder Advocacy
Electric companies set increasingly ambitious goals while coordinating between state and federal policies and responding to increased stakeholder and procurement pressure.
Renewable portfolio standards, clean electricity standards, and emissions targets at the state level are constantly being updated, adding pressure, funding, and a variety of interim targets to coordinate with on the path to long-term goals.
Major federal climate legislation via the Inflation Reduction Act and Bipartisan Infrastructure Law provide incentives for clean energy investments across most segments of the energy sector, including power, buildings, industry, fuels, and transport.
Federal performance standards and regulations can alter company and household purchases and operations.
Customers and shareholders increasingly expect companies to reduce emissions and provide options for clean energy procurement (e.g., growing interest in 24/7 Carbon-Free Energy).
Challenges
3 of 7
Reliability
How can net-zero pathways meet reliability and resiliency requirements?
How can operational capabilities be expanded to control dynamic, decentralized resources?
How can regulatory and planning processes support the requirements of future energy systems?
2 of 7
Advanced technology
What is the technical and economic potential for advanced technology to enable decarbonization?
What advances can be made to support the production, transport, storage, and utilization of low-carbon fuels?
1 of 7
SUpply Chain
How can the existing system be maintained while expanding clean energy deployment and workforce?
How can a robust supply chain be maintained to provide components and equipment in a safe, reliable, and environmentally responsible manner?
4 of 7
electrification
How could stakeholder networks (utilities, regulators, technology vendors, market operators) coordinate to reduce barriers to electrification?
How can grid planning and operations improve to integrate electric transportation networks through smart charging, fast charging, and storage?
5 of 7
demand side participation
What are the economic and emissions impacts of including flexible demand and distributed resources in capacity expansion, transmission, and distribution planning?
What will drive the adoption of flexible end-uses, and which market signals will customers respond to?
6 of 7
load forecasting
How can forecasts incorporate synchronized renewable/load profiles, weather-to-load dynamics, and probabilistic forecasting?
How can data be updated to include distributed resources, end-use technology adoption, and historical or future weather?
7 of 7
climate resilience
What are the gaps in existing climate-related data, and what variables and metrics can be effectively applied to the power system?
How can we effectively apply climate trends and projections when designing new assets?
Balancing Objectives
There are several objectives that decision-makers are trying to balance in the clean energy transition, including affordability, sustainability, reliability, resiliency, and equity.
Navigating these tradeoffs is situation- and context-dependent. There may be cases where actions can improve system performance across multiple goals at the same time.
For instance, efficient electrification can lower household energy spending while also lowering CO2 and improving air quality.
But in other cases, improving performance in one area means decreasing performance in another. For instance, policy costs may increase at deeper decarbonization levels.
Affordability
Optionality enables affordability
Achieving economy-wide decarbonization while maintaining reliable delivery of energy and energy services across the economy will require a broad set of low-carbon technologies.
Imposing greater limitations on resource and technology options could significantly increase the overall cost of reaching emissions goals, whether that is reaching net-zero emissions across the economy or in the power sector.
Full portfolios and advanced technologies lower the costs of future emissions reductions.
Optionality
Innovations
There are many pathways to reach net-zero emissions; some are lower cost than others.
Target definitions and timing matter for investments and costs. An economy-wide target with the flexibility to allocate positive and negative CO2 emissions allows each sector and region to follow their own decarbonization path while minimizing overall costs.
While there are many potential low-carbon technology scenarios, there remains significant uncertainty around future cost and performance.
The path to net-zero energy requires innovation in many forms—from technology to market and regulatory structures to customer behavior and business models.
Robust research, development, and demonstration are essential to advance the technologies poised to make net-zero possible.
Target Definitions
Target definitions impact costs and technology mixes.
In a conversation about emissions targets, it is important to be clear about the target definition.
Electric sector targets must be distinguished from economy-wide targets. The electric sector is poised to play a major role in decarbonization pathways, but it is not the only opportunity to decarbonize across the entire economy.
Target definitions can shape power sector and economy-wide decarbonization.
Resources
EPRI’s Program 178 offers insights to improve the robustness of electric company resource planning, fuels planning, and asset risk management; develops technology cost and performance data for input into company resource planning practices; and provides analysis on integrated system modeling.
EPRI’s Program 201 analyzes the implications of energy and environmental policies, the value of technological advances in achieving energy and environmental goals, and guidance for evaluating and communicating climate risk and resilience.
The Low Carbon Resources Initiative (LCRI) advances the development and demonstration of low- and zero-carbon energy technologies.
EPRI’s Climate READi (REsilience and ADaptation initiative) is developing a comprehensive and consistent approach to physical climate risk assessment.
EPRI Programs & Initiatives
ESCA Research Summaries
ESCA Reports on Decarbonization Pathways
2021
2022
2023
Powering Decarbonization
LCRI Net-Zero 2050
50x30
Net-zero electric sector scenarios considering how a traget is defined, the timing of the target, the costs of the transformation, and the interactions with the end-use sectors
Scenarios to evaluate alternative technology strategies for achieving economy-wide net-zero emissions by 2050
Pathways to a 50% economy-wide emissions reduction by 2030, updated with Inflation Reductin Act incentives and increased fuel and technology costs
EPRI
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Renewables
Social Cost of GHGs
Climate Risk & Resilience
Energy & Climate Policy
Energy Storage
Nuclear
GHG Accounting
GHG Offsets
Primary and final energy in net-zero 2050 scenarios. Source: EPRI (2022).
Change in the net present value (NPV) of electric sector costs (including capital, fuel, operations and maintenance, transmission) under a 95% CO2 cap by 2050 relative to a “Full Portfolio” reference. Source: Bistline and Blanford (2020).
Economic impacts across different electric sector CO2 reduction targets (% 2005 levels) and assumptions about carbon dioxide removal (CDR) availability. Panels show incremental policy costs and CO2 allowance prices. “RPS Only” limits the choice set of eligible technologies to renewables and energy storage only. “Breakthrough” scenarios assume lower technological costs. Source: Bistline and Blanford (2021).
Historical greenhouse gas emissions trends by sector relative to 2030 U.S. target. Values through 2021 come from U.S. EPA’s “Inventory of U.S. Greenhouse Gas Emissions and Sinks,” and 2022/2023 values come from Rhodium.
Sectoral CO2 changes over time (% reductions from 2005 levels). Values through 2021 come from U.S. EPA’s “Inventory of U.S. Greenhouse Gas Emissions and Sinks,” and 2022/2023 values come from Rhodium.
There are many options for reducing economy-wide emissions.
For more information, see the National Climate Assessment “Mitigation” chapter.
Costs of renewable electricity generation and batteries in the U.S. have fallen as deployment has increased. Source: Fifth National Climate Assessment “Mitigation” chapter.
Installed electricity generation and energy storage capacity in 2020 and 2050 across different economy-wide net-zero scenarios. Source: EPRI (2023).
Cross-model comparison of U.S. emissions reductions across the economy (left) and power sector (right) under IRA and reference scenarios without IRA. Source: Bistline, et al. (2023).
Electric company voluntary net-zero targets. *denotes the inclusion of environmental justice and/or equity in net-zero goal. Source: EPRI (2023).
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1976
1991
1992
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1992
1992—now
1996
1996
1996—2005
1992
1997—2001
1998
1999
2001
2007—2009
2009—2011
2010s
2010s
2010s
2010s
2014—2016
2014—now
2018
2023
2023
2022—2023
ESCA HISTORY
Decarbonization Trends
Decarbonization 101
Drivers
Challenges
Balancing Objectives
Resources
For additional information, please contact:
John Bistline (jbistline@epri.com)
David Young (dyoung@epri.com)
EPRI establishes Energy Modeling Forum (EMF) at Stanford University to improve the accuracy and capabilities of energy-economic models and to apply them to investigate decision-relevant questions.
ESCA leads international consortia (MECCA and ACACIA) with industry, government, and academia to improve global climate simulation models and quantify uncertainties in regional climate forecasts.
ESCA and Stanford coauthors collaborate in Buying Greenhouse Insurance (MIT Press). This book explores the fundamental challenges of greenhouse gas reductions.
ESCA contributes seed funding to create the climate research programs at the Massachusetts Institute of Technology, Carnegie Mellon University, and Pacific Northwest National Laboratory.
ESCA participates in the first multi-model study of global climate change mitigation (EMF 12).
ESCA experts serve as authors of the Intergovernmental Panel on Climate Change (IPCC) with 12 authors in various roles beginning in the Second Assessment Report.
ESCA convenes its first Energy and Climate Research Seminar.
ESCA coauthors study in Nature “Economic and Environmental Choices in the Stabilization of Atmospheric CO2 Concentrations,” which is a seminal paper in climate policy design.
ESCA initiates one of the largest programs on climate impacts in the world, identifying the importance of considering adaptation options when assessing climate impacts, which leads to the publication of three books on national and regional climate impacts.
ESCA starts collaborative Vegetation-Ecosystem Modeling and Analysis Project (VEMAP) with NASA, USDA Forest Service, and U.S. Department of Energy to simulate and understand ecosystem dynamics.
Development and application of international versions of EPRI’s REGEN model in Canada, European Union, Japan, Mexico, South Africa, South Korea, and Taiwan.
ESCA leads research on GHG offsets and emissions accounting.
Prism 2.0 analyzes converging climate, air, water, and waste regulations using the newly created U.S. Regional Economy, Greenhouse Gas, and Energy (US-REGEN) model.
ESCA’s social cost of carbon (SCC) research advances relevant sciences and educates stakeholders on technical issues for SCC estimation and use, including participation on the National Academies SCC Committee.
ESCA leads several prominent studies and model comparison projects on renewables and energy storage modeling for deep decarbonization.
ESCA’s Prism/MERGE analysis helps further the U.S. dialog on carbon reductions as Congress considers legislation, providing a roadmap for electricity sector decarbonization.
Started EPRI-IEA-IETA Workshop on Greenhouse Gas Emissions Trading.
ESCA, Stanford, and Resources for the Future organize a workshop that leads to the seminal book Discounting and Intergenerational Equity (RFF).
ESCA and the Pacific Northwest National Laboratory start the Global Energy Technology Strategy project to highlight the critical role of technology advances in addressing the climate change.
Analyses of the Kyoto Protocol using EPRI’s MERGE model contributes to domestic policy discussions and international negotiations.
ESCA conducts analysis of EPA’s Clean Power Plan using US-REGEN to understand policy impacts in detail at the state level.
ESCA experts participate as authors of the U.S. National Climate Assessment (NCA) for chapters on economics, adaptation, supply chains, energy, and mitigation.
EPRI’s U.S. National Electrification Assessment explores strategies to reduce economy-wide emissions using cleaner electricity. A 2021 report, Canadian National Electrification Assessment, examines decarbonization opportunities in Canada.
ESCA coauthors the first multi-model study of reaching net-zero emissions in the U.S. (EMF 37) and publishes Low-Carbon Resources Initiative Net-Zero 2050 report.
EPRI publishes the Integrated Strategic System Planning (ISSP) framework report for more comprehensively planning reliable, low-carbon portfolios across electric power system supply, delivery, and end-use.
ESCA leads multi-model studies of the U.S. 2030 climate target and Inflation Reduction Act published in Science, contributing to the U.S. government’s stocktake to measure progress toward its Paris Agreement pledge.
Options for
Reducing Emissions
Adopting Electric
End-Use Technologies
Variable Renewable
Energy
Decarbonization Opportunities & Costs
EPRI’s Integrated Strategic System Planning (ISSP) Initiative presents a framework and analytical toolbox for more comprehensive planning across generation, transmission, distribution, and end-use systems.
