Heat is arguably the most important form of energy in the United States and the world. Without it, we could not forge steel to build our infrastructure, we could not process raw materials, we could not generate most utility-scale electricity, recycling would not be possible, and our food and water would be unsafe. In its various applications, commercial and industrial heat are central to the economy and our quality of life. This also makes heat-generating sectors concentrated sources of greenhouse gas emissions, as process heat is primarily generated through combustion of hydrocarbons.
These hydrocarbons have built the modern world and continue to run it today. In pursuit of decarbonization, there are some wishing to see the entire economy electrified and to completely depart from hydrocarbons. When these goals are set forth, they often overlook or reject fundamental realities about the scale of our energy dependence, state of our infrastructure, and our true reliance on hydrocarbons. While many present arguments on the economic viability of hydrocarbon alternatives like renewables, very few advocates provide a holistic framework for evaluating an economy-wide decarbonization scheme. We do so here, with a limited approach to the sector producing commercial and industrial heat.
This framework presents a new cumulative cost-benefit analysis that reveals a ballooning effect to the costs and logistical difficulties of going too fast and too far with renewables without well-planned infrastructure build-outs and economic investments. The model differs from a traditional cost-benefit analysis by viewing permitting and regulatory compliance as their own cost (most cost-benefit analyses are conducted within the regulatory process) and by demonstrating that time has a value and cost, so large projects awaiting approval for a decade are more costly than projects able to be implemented sooner.
Finally, the cumulative cost-benefit analysis presents the need to conduct entire top-to-bottom cost-benefit analyses for every needed component of a nationwide strategy (e.g., a CBA for the solar farm, a CBA for the new transmission lines, a CBA for any battery storage facilities, etc). The cumulative nature captures necessary infrastructure not yet in place, even though it may be a different project owner or builder responsible for building them. From a policymaker standpoint and a national, economy-wide vantage point, it is necessary for the holistic cumulative cost-benefit analysis to include these things, because policymakers can often favor or prioritize one project (e.g., a wind farm) without considering the state of infrastructure, costs, and timing needed to effectively bring all relevant infrastructure into place.Â