PNNL

Abstract

Electricity demand is expected to grow rapidly in the coming decades. Although capacity investment requires time horizons over years and decades, planners need to also consider shorter-term conditions of high stress such as sudden changes in fuel prices and demand to maintain reliability of power supply during all times. Consequently, long-term models used to inform planning therefore need to account for the impacts of sub-annual load variation along with the co-evolution of the power sector with other sectors of the economy. We incorporate sub-annual investment and operation dynamics in the power sector module of a long-term multisector model with state-level detail in the U.S. (GCAM-USA) to better reflect operational flexibility in the power sector in response to various stressors. For example, we demonstrate the ability of dispatchable technologies (e.g. coal and gas) to increase generation in response to increasing demands for electricity without increasing capacity at the same rate. We also demonstrate that the impacts of an important stressor, namely, natural gas price variation on power-sector investment and operation are heterogeneous across states and depend on the character of state-level fuel mixes. Our study highlights the value of representing sub-annual detail in a long-term model with multi-sectoral dynamics to better capture real-world decision-making in the power sector.