2.6 Other Assumptions
2.6.1 Technology-Specific Constraints
There are a variety of constraints placed on new additions of individual technologies at both the regional and national level in the base scenario. These constraints are summarized here and in the subsequent table.
New hydro additions are limited to those projects already planned or underway as of 2015
There are no limitations on new additions of fossil generation in the base case scenario. Limitations may be applied in specific scenarios.
New additions of co-firing capacity are limited to 5 GW per region per time period (in some scenarios this constraint is relaxed)
New additions of nuclear are constrained at the national level
- Before 2021: Watts Bar Unit 2 and Vogtle Units 2 & 3
New additions of "brownfield" nuclear are constrained at the regional level (see Table 2‑6)
Some states have regulations that effectively prohibit the construction of new nuclear units, including California, Kentucky, and West Virginia, to name a few. US-REGEN uses data from the National Conference of State Legislators to inform which states prohibit new nuclear units.[1]
| State | Brownfield Capacity (MW) |
|---|---|
| Alabama | 5600 |
| Florida | 5250 |
| Georgia | 2234 |
| Idaho | 1600 |
| Illinois | 1400 |
| Indiana | 2800 |
| Louisiana | 1500 |
| Massachusetts | 1400 |
| Maryland | 1600 |
| Michigan | 1500 |
| Missouri | 1600 |
| Mississippi | 4300 |
| North Caroline | 3300 |
| Nebraska | 1400 |
| New Hampshire | 1400 |
| New Jersey | 1400 |
| New York | 2900 |
| Ohio | 5600 |
| Oklahoma | 2800 |
| Oregon | 2800 |
| Pennsylvania | 3000 |
| South Carolina | 7034 |
| Tennessee | 11800 |
| Texas | 14190 |
| Utah | 1500 |
| Virginia | 8600 |
| Washington | 5600 |
Finally, the model has an option to include a "public" cost for nuclear power that rises as the share of nuclear generation rises. This is designed to encapsulate possible public unease with the risks posed by increasing reliance on nuclear power. By default this cost is turned off. If applied, then in each region, whenever the share of nuclear exceeds the base year share, generation in excess incurs an additional cost of $10/MWh, up to the point when the share is twice the base year share. Above this point, generation in excess incurs a cost of $20/MWh.
2.6.2 Auxiliary Markets
US-REGEN includes auxiliary markets for capacity reserves, and for spinning reserves. US-REGEN does not currently represent other auxiliary markets such as black start, regulation, or other reliability services.
The optimization algorithm is designed to ensure that sufficient reserves and capacity are built to cover any event occurring within the model's time horizon. However, many investment decisions are made to hedge against the possibility of a stochastic shock to the system. Such shocks are covered, in practice, by the imposition of a reserve margin. By default, US-REGEN adds a reserve margin to all regions equal to 7% above peak residual load. The peak residual load is calculated as the greatest hourly demand net of the intermittent renewable generation within that hour. The residual peak hour is often distinct from the absolute peak hour, which in some cases coincides with high renewable generation. Dispatchable technologies located within the region contribute their full nameplate capacity to the reserve margin, while variable resources, such as wind and solar PV, contribute their modeled output in the hour with the peak residual load. Rooftop PV does not contribute to the reserve requirement. Imports or import capacity do not contribute to the reserve margin by default. In practice, the model increases capacity of flexible generation such as natural gas relative to scenarios without a reserve margin.
US-REGEN also has a representation of spinning reserve markets. Because this is computationally taxing, it is not deployed by default; only where spinning reserve revenues may be significant for new generation capacity investment decisions.
2.6.3 Policies
US-REGEN has the capability to model diverse energy, electricity, and emissions policies. By default, the electric sector model includes a suite of current policies including emissions constraints, regional greenhouse gas targets, taxes and subsidies, and state renewable portfolio standards (RPS) and clean energy standards (CES). The model has also been configured to represent a variety of other proposed policies, such as the Clean Power Plan, national carbon constraints, CO2 taxes, clean energy standards, and emission intensity standards. These can be enabled or disabled, reconfigured, or replaced entirely.
Non-CO2 Emissions Constraints
A variety of policy scenarios covering emissions of non-CO2 pollutants are considered. In addition, the model can simulate regional or national caps on CO2 emissions as well as price-based carbon policies. These policies can be linked with non-electric abatement through iteration with the end-use model. The complete list of current policies changes frequently with announcements, and the below documented policies may not be the full list implemented in the reference current policy scenario.
Tax and Subsidy Policies
The US-REGEN base case includes the following tax incentive programs, and the model can easily incorporate additional tax incentives, restricted by year or region:
The Federal Production Tax Credit (PTC) for wind generation. This is phased out over time per the Consolidated Appropriations Act 2016 (Title III; Sec. 301)
The Federal Business Energy Investment Tax Credit (ITC) currently available for solar generation. This is reduced over time per the Consolidated Appropriations Act (Title III: Sec 303)
The 45Q tax credit for CO2 capture and storage applies a $50/tCO2 tax credit on plants under construction before 2024 with installed capture and storage equipment.
Regional Greenhouse Gas Policies
Regional greenhouse gas policies
The Regional Greenhouse Gas Initiative (RGGI) places a cap on CO2 emissions from the electric sector in nine Northeast states.
The existing California Cap and Trade scheme, informally known as 'AB32', caps CO2 emissions on the whole California economy. In electric-model only scenarios, the California cap can only be represented as a price on CO2.
California's SB100 sets a target of 60 percent generation from renewables by 2030 and 100 percent "clean" generation by 2045.
New York has committed to a goal of 100% GHG reduction from the electric sector by 2050.
State Renewable Portfolio Standard Policies
The model includes a representation of state-level renewable portfolio standard (RPS) requirements as of mid-2019. The renewable targets by state by year are aggregated to regions by taking the load-weighted average. Although exact translation of state targets to those regions containing multiple states is not possible, the key aspects of these policies have been included to the extent possible. In each region there is a minimum for non-hydro renewable generation as a percentage of retail sales based on the targets adopted by individual states within the region and the relative size of that state's load. In states such as New York where the target includes hydro, expected generation from hydro is removed and only the portion of the target likely to be satisfied by non-hydro renewables is included. The resulting renewable minimums for 2030 in each region are shown in Figure 2‑19.
In addition to the targets themselves, there are many implementation details relevant to the compliance with state RPS policies. These include restrictions on trade of renewable energy certificates (RECs); whether RECs must be bundled (i.e. purchased along with physically delivered power from a renewable generator) or can be unbundled (i.e. purchased on a national market); whether an alternative compliance payment (ACP) is allowed and at what price; and carve-outs for particular technologies such as solar PV and offshore wind. Many state RPS policies contain carveouts for solar PV and offshore wind, and these mandates are included as part of the overall standard—as one example, New York currently requires 6GW of rooftop solar PV and 9GW of offshore wind. Each of these features has been incorporated into the model as specified in the various statutes.
Technology Standards
In addition to existing state-level renewable standards, the model can simulate other regional or national standards, such as a clean energy standard including non-renewables such as nuclear and CCS technology. The reference scenario includes state-specific prohibitions on new nuclear construction. Specific design details such as technology crediting or flexibility through trade can also be represented.