VIENNA, Va., June 26, 2024 /PRNewswire/ — The U.S. energy system will continue a significant transition through 2050, driven by new technologies, policies, and consumer choices. These will result in new market dynamics, industry challenges, and changes in energy-related greenhouse gas emissions. OnLocation, a KeyLogic company, produced the U.S. Energy Horizons to 2050 report to explore these issues using its enhanced version of the National Energy Modeling System (OL-NEMS). The Horizons report provides Reference and Advanced Technologies scenarios to illustrate the impacts of clean technology innovation and enabling policies that could lead to deeper decarbonization. OnLocation’s release webinar is on Thursday, June 27 at 2 p.m. (EST).
What is the OnLocation U.S. Energy Horizons to 2050 Report (OL EH)?
OL EH provides a view of the U.S. energy system through 2050 and may be used by various stakeholders to inform policy decisions. If specific actions are taken, it projects potential future effects on energy supply and demand. OL EH considers the impact of existing and potential policies and technologies affecting energy-related greenhouse gas emissions.
OL EH is a series of modeled projections under different sets of consistent input assumptions. Although many input assumptions (e.g., prices, technology development, economic growth, geopolitical developments) are uncertain long-term, OnLocation uses the best judgment of its energy experts, informed by historical trends and expected future changes, to develop quantitative central pathways for model input assumptions. These central pathways produce the OL EH Reference scenario and may be adjusted in sensitivity scenarios to illustrate the impacts of parameter uncertainty on the energy system.
The OL EH Reference scenario serves as a baseline against which policy action may be compared. It assumes current laws and regulations continue throughout the projection period, which allows proposed policy actions or technology improvements to be modeled as a sensitivity scenario. The impact of the OL EH Advanced Technologies scenario is estimated by comparing scenario results with the Reference scenario.
Why is OnLocation Releasing OL EH?
That fact that the energy system is undergoing and will continue rapid and complex change is neither a singular nor recent phenomenon. To assist policymaking in this dynamic environment, the U.S. Energy Information Administration (EIA) routinely captures the existing state of knowledge about the U.S. energy system in its Annual Energy Outlook (AEO). Citing the need for more time to incorporate new features to the underlying NEMS model to reflect recent energy system changes, EIA announced they would not release an AEO for 2024. This is the first year since the early 1980’s that EIA did not produce an AEO.
OnLocation decided to produce the OL EH this year to benefit the energy & climate modeling community. Over its 40-year history, OnLocation has worked with EIA to build and maintain parts of NEMS, the energy-economy model used to produce AEOs. OnLocation developed its own version of the model, OL-NEMS, based on AEO 2023, including new features and policy updates to address energy system issues and CO2 mitigation strategies important to OnLocation’s clients. OL EH brings together the best of OnLocation’s energy system expertise in a modeling framework familiar to users of the AEO.
How Did OnLocation Develop the OL EH?
OL-NEMS is based on AEO 2023. OnLocation updated this model with publicly available data, policy updates, and new capabilities, making OL EH markedly different from EIA’s AEO 2023. OnLocation is solely responsible for OL EH assumptions and results.
A full report will include a full list of OL-NEMS model updates and OL EH scenario assumptions. Key updates include:
Hydrogen production, storage, and trade (including low-carbon hydrogen sources).Improved representation of carbon capture and sequestration (CCS) and carbon markets.Other CO2 mitigation technologies such as direct air capture (DAC) and sustainable aviation fuel.Updated regulations including new EPA greenhouse gas standards for power plants and vehicles.Greater data center electricity demand growth in the commercial sector.Lower cost assumptions for renewables, carbon capture, and electric vehicles.
How Does OL EH Compare to AEO 2023?
Our key modifications lead to greater CO2 reductions in most energy sectors by 2050 compared to AEO 2023, especially in the power and transportation sectors, as shown in Figure 1. These reductions are due to a more rapid phase-out of conventional fossil fuels in favor of clean energy sources such as renewable energy and electric vehicles in EH Ref compared to AEO.
What the EH Scenarios Reveal
While Reference scenario CO2 emissions decline over time, net emissions in the Advanced Tech scenario are much lower than the Reference scenario (Figure 2).
An important contributor to these reductions is that the power sector achieves net zero CO2 by 2040 with a combination of new renewables, battery storage, and CO2 capture including bioenergy with carbon capture (BECCS). Some other sectoral emissions are offset by net negative emissions from both DAC and BECCS in industry, biofuels, and hydrogen production.
Conclusion
OL EH is accessible to organizations aiming to explore potential future projections of the U.S. energy system more effectively and identify strategies for influencing its direction. Additional OnLocation reports on Data Center (AI & Cryptocurrency) Energy Demands, Employment Impacts of the U.S. Energy Transition, and Critical Materials Demands of the U.S. Energy Sector are planned for later this year.
OnLocation helps public and private groups apply quantitative tools to assess structural and regulatory challenges facing the U.S. energy system. For more information or to book a free consultation, please visit our website or email contact@onlocationinc.com.
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SOURCE Keylogic
