Two years ago, the U.S. announced the goal to reduce greenhouse gas emissions by 50% below 2005 levels by 2030, and achieve net-zero, economy-wide emissions by 2050. As emissions have recently rebounded as pandemic restrictions eased, EPRI updated its initial analysis of potential pathways to achieve the 2030 target. The updated analysis shows that the rate of decarbonization may now need to increase above the rate previously identified to meet the 50% reduction goal.Â
The new analysis found that achieving the 2030 economy-wide carbon emissions reductions will need to quadruple compared to historical rates. Deployment of clean energy technologies, energy efficiency, and rapid electrification will need to accelerate, and deployment of solar, wind, and battery storage, for example, will need to accelerate and more than double last year’s deployment levels. Achieving this target will also involve rapid deployment of a newer and emerging technologies. The advancement of technologies like hydrogen, advanced nuclear, carbon capture utilization and storage - and others that may play a significant role to achieve economy-wide net zero – will need to occur in parallel with current clean energy technologies to meet 50% reductions by 2030.Â
This accelerated rate of clean energy deployments and emissions reductions, however, will require energy system improvements and a robust analysis of energy production, transmission, delivery, use, and oversight to ensure the clean energy transition is reliable, affordable, and equitable. Achieving these goals will also require paying close attention to additional challenges such as increased cost of materials shipping, labor, and fuel, as well as other supply chain constraints.
Policy’s Impact on 2030 Pathways
The Inflation Reduction Act (IRA) of 2022 and other policies have increased incentives for deploying decarbonization technologies and may narrow the gap to reach the 2030 target. The IRA adopts an investment-based approach to climate policy using tax credits to support technologies, such as wind and solar power, energy storage, and other clean energy technologies. These incentives are estimated to supply more than $350 billion for clean energy investments across the energy sector.
The IRA could also drive growth in building and vehicle electrification, offering credits for homes, businesses, transportation, and energy efficiency. EPRI’s updated analysis shows that, driven by IRA’s incentives, nearly half of new passenger vehicle sales will likely be electric by 2030, contributing to reduced emissions. Plus, the resulting electrification may decrease average annual net energy costs by $180 per household and contribute to air quality improvements.Â
However, the analysis found that existing government incentives and other existing policies alone are insufficient to reach the 2030 target. Delays from policy implementation, siting, and permitting, among other issues, are complicating the transition. The IRA incentives could help reduce economy-wide emissions by 33% by 2030 but achieving 2030 goals requires an additional billion metric tons of carbon reductions per year. Filling this gap will require a combination of actions, including regulation, state and federal policy, private sector planning, and changes in consumer behavior.
Key considerations for stakeholders and decision-makers are to:
- Prepare for low-carbon resources beyond 2030
- Strengthen electric system reliability and resiliency
- Develop the clean energy workforce with increased training
- Overcome technology supply chain constraintsÂ
- Adapt grid design for changing climate and weather extremes
Reflecting Current Realities
EPRI completed the initial analysis in 2021 and since then multiple factors changed the challenge and affected the near-term 2030 target. These variables include:
- Inflationary drivers and supply chain constraints
- Federal incentives in IRA and updated state-level policies
- Uncertainty in mid- and long-run fuel prices
- Post-pandemic emissions uptick
The need to update so many variables over a short time is a reminder of the value of regular re-assessments. EPRI completed the update using its U.S. Regional Economy, Greenhouse Gas, and Energy (REGEN) energy-economic model to examine how recent changes could impact the U.S.’s ability to reach the 2030 target (https://us-regen-docs.epri.com/). This framework integrates a detailed model of power sector capacity expansion and an economic model of non-electric sectors.
EPRI’s updated analysis shows how factors over the past year have changed the nature of the challenge ahead. Understanding the challenges and limitations in reaching the 2030 goal is key to keeping the reliable, equitable, and affordable clean energy transition on track. Reaching bold goals and overcoming challenges will require innovation and collaboration.