Arizona, United States [RenewableEnergyWorld.com] The U.S. utility industry will have to invest between US $1.5 and US $2 trillion between 2010 and 2030 to maintain current levels of reliable energy service for customers throughout the country, according to a new report issued by The Brattle Group. The findings are detailed in “Transforming America’s Power Industry: The Investment Challenge 2010-2030”.
According to the report, all types of new generation capacity will be needed, including renewables, natural gas, coal and nuclear. This includes the nearly 40 gigawatts of new renewable capacity that will be needed to meet state renewable portfolio standard and other requirements in the same time frame.
In the base case scenario, which does not account for new climate policies, the total investment needs are projected to reach US $1.5 trillion. Implementation of a federal carbon policy would increase the capital cost and change the mix of new generation capacity. A model of one scenario with carbon controls would require an increase in total capital spending to $2 trillion.
Another finding in the study is a large potential reduction in the need for new generation capacity, due to the faster than previously estimated implementation of energy efficiency and demand response programs. In the preliminary results, energy efficiency was estimated to potentially reduce new capacity by 17%. In the final results, the potential reduction in new capacity is projected to be approximately 38%. However, reductions in new required capacity will not correlate to an equal reduction in total investment due to the offsetting costs of implementing the efficiency programs.
The report was sponsored by the Edison Foundation. For more information about the report, click here.