Guiding the Transition to a Climate-neutral Gas Utility: Modeling the Intersection of Technology and Regulation

Strategic Energy Research Consortium (SERC)

Background

Pathways to a low carbon future will likely require the transition of all small-scale gas end-uses to a net-zero emissions fuel, such as renewable natural gas, hydrogen, or electricity from clean sources. To reduce the cost of this transition, near-term decisions about gas system re-investment and expansion should be consistent with long-term targets for greenhouse gas emissions. Guiding these investment decisions is difficult as they present interdisciplinary and complex modeling challenges. New modeling methods are needed to provide guidance towards a least-cost, least-risk outcome associated with the long-term gas system transition that protects ratepayers and achieves ambitious climate policies.

This project will expand on traditional system planning techniques to optimize engineering planning and policy decisions coupled across the natural gas and electric power sectors and provide a blueprint for the path forward in a carbon-constrained future. 

Project Goals

This project will begin to answer important questions about the engineering, economic, and policy implications of a well-managed transition to a net-zero emissions gas utility by focusing on three main objectives. It aims to identify the set of least-cost, least-risk end states for current gas end-uses under a range of assumptions of technological progress, resource availability, weather patterns, and transmission/distribution constraints; build dynamic models that will allow analysis of near-term decisions that push us toward these desirable long-term systems; and implement template policies in the dynamic models to study different strategies that may allow utilities and regulators alike to contain costs to ratepayers through targeted infrastructure conversion, retirement, or incentives to business and consumers. 
 

Approach

The core approach is to apply cost-optimizing capacity investment modeling techniques to an integrated gas and electric energy system to identify the least-cost net-zero emissions end-state for gas distribution in select regions with varying climates and resource potentials. Through time-extended system planning approaches the researchers will characterize the trajectory of a planned transition, achieved through cost-minimization. The modeling results can be used to estimate the incremental cost and equity implications of an unplanned transition driven instead by consumer preference and heterogenous local mandates. These models can then be used to test the sensitivity of results to different economic conditions, technology changes, and policy decisions. In preliminary work, the researchers successively solved a model with increasing restrictions on carbon emissions from the energy system, until achieving net-zero GHG emissions.  See Figure 1.  Such results will be useful to investors, utilities, and regulators as proceedings in California and Massachusetts seek to bring consistency between short-term decisions on maintenance and long-term decisions on greenhouse gas emissions targets.

Team Members

Adam Brandt
Adam Brandt is Associate Professor in the Department of Energy Resources Engineering, Stanford University.  His research focuses on reducing the greenhouse gas impacts of energy production and consumption, with a focus on fossil energy systems. Research interests include life cycle assessment of petroleum production and natural gas extraction. A particular interest is in unconventional fossil fuel resources such as oil sands, oil shale and hydraulically fractured oil and gas resources. He also researches computational optimization of emissions mitigation technologies, such as carbon dioxide capture systems. Dr. Brandt received his PhD from the Energy and Resources Group, UC Berkeley.

Michael Wara
Michael Wara is Director of the Climate and Energy Policy Program and a senior research scholar at the Stanford Woods Institute for the Environment as well as Senior Director for Policy at the Sustainability Accelerator within the Stanford Doerr School of Sustainability. Wara organizes and manages cross-functional teams of post docs, legal fellows and graduate students that provide fact-based, bipartisan, technical and legal assistance to policymakers, environmental justice advocates, and tribes engaged in the development of novel climate and energy law and regulation. He also facilitates the connection of Stanford faculty with cutting edge policy debates on climate, energy and climate impacts, leveraging Stanford’s energy, climate and natural resource expertise to craft real world solutions to these challenges.

Other team members:
Gregory Von Wald, Postdoctoral Scholar, Department of Energy Resource Engineeering, Stanford University 
Evan Sherwin, Postdoctoral Scholar, Department of Energy Science & Engineering, Stanford University 
Mareldi Ahumada Paras, Postdoctoral Scholar, Department of Energy Resource Engineeering, Stanford University
Mo Sodwatana, PhD candidate, Energy Science and Engineering, Stanford University