Editing IPCC:AR6/WGIII/Chapter-6 (section)

=== 6.4.7 Summary of Mitigation Options ===

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Designing feasible, desirable, and cost-effective energy sector mitigation strategies requires comparison between the different mitigation options. One such metric is the cost of delivering one unit of energy, for example, the levelised cost, or USD MWh –1 , of electricity produced from different sources. Levelised costs of electricity (LCOE) are useful because they normalise the costs per unit of service provided. While useful in characterising options in broad strokes, it is important to acknowledge and understand several caveats associated with these metrics, particularly when applied globally. They may be constructed with different discount rates; they require information on energy input costs for options that require energy inputs (e.g., fossil electricity generation, biofuels); they depend on local resource availability, for example, solar insolation for solar power, wind classes for wind power, and rainfall and streamflow for hydropower; and actual implementation costs may include additional elements, for example, the costs of managing electricity grids heavily dependent on VRE electricity sources. These complicating factors vary across regions, some depend strongly on the policy environment in which mitigation options are deployed, and some depend on how technologies are constructed and operated.

The literature provides multiple LCOE estimates for mitigation options today and in the future (see Table 6.9 for electricity generation options). LCOE ranges for low- and zero-carbon electricity technologies overlap with LCOE’s of fossil generation without CCS. For example, LCOEs for utility solar and wind today and in the future overlap with those of new coal and gas without CCS (IEA WEO 2020; Lazard, 2020; [[#NREL--2021|NREL 2021]] ) (Figure 6.18). Some of the overlap stems from differences in assumptions or regional conditions that apply to all technologies (e.g., variations in assumed discount rates), but the overlap also reflects the fact that low- and zero-carbon electricity generation options are, and will be, less expensive than emitting options in many regions. Future cost projections also illustrate that several technologies are anticipated to experience further cost declines over the coming decades, reinforcing the increasingly competitiveness of low- and zero-carbon electricity. For example, IEA’s LCOEs estimates for offshore wind halve between 2020 and 2040 in several regions (IEA WEO 2020).

'''Table 6.9 | Examples ofcost of mitigation for selected electricity options.''' Results represent variations in mitigation options and displaced fossil generation. LCOEs are illustrative, but consistent with recent estimates. Negative values mean that the mitigation option is cheaper than the displaced option, irrespective of emissions benefits. NGCC: natural gas combined cycle.

{| class="wikitable"
|-
|
| colspan="4"| Baseline

|-
|
| New coal

| Existing coal

| New NGCC

| Existing NGCC

|-
|
| Baseline emissions rate (tCO 2 MWh –1 )

| 0.8

| 0.9

| 0.34

| 0.42

|-
|
| LCOEs (USD2020 kWh –1 )

| 0.065

| 0.041

| 0.044

| 0.028

|-
| Utility scale solar PV (poor resource site)

| 0.100

| USD44 tCO 2 -eq –1

| USD66 tCO 2 -eq –1

| USD165 tCO 2 -eq –1

| USD171 tCO 2 -eq –1

|-
| Utility scale solar PV (good resource site)

| 0.035

| –38 USD tCO 2 -eq –1

| –7 USD tCO 2 -eq –1

| –26 USD tCO 2 -eq –1

| USD17 tCO 2 -eq –1

|}

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[[File:fa944fde7460966113d459de4e16ebeb IPCC_AR6_WGIII_Figure_6_18.png]]

'''Figure 6.18 | Range of LCOE (in USD kWh''' –1 ''') from recent studies for different electricity-generating technologies circa 2020 and in the future between 2020–2040.''' LCOEs are primarily taken from recent studies, because the costs of some technologies are changing rapidly. To make the figure more tractable across the studies, we highlight the data from IEA WEO 2020 STEPS scenario in yellow (IEA 2020), the EIA AEO 2021 in light blue (EIA 2021), NREL ATB 2021 in brown, ( [[#NREL--2021|NREL 2021]] ), and IRENA’s 2020 Renewable Power Generation Costs in dark blue (IRENA 2021). All other studies are shown in light grey markers. Marker shapes identify the regions included in the studies. Studies that included several regions are labelled as global. Only sources that provided LCOEs are included. Ranges for studies frequently reflect variations among regional estimates. Studies that are shown as a mid-point and a solid line represent studies that reported either a median or an average, and that had either a confidence interval or a minimum and a maximum reported. Dashed lines with markers at the end represent the range of values reported in studies that had several point estimates for either different regions or used different assumptions. All estimates were converted to USD2020. The publication year was used if no USD year was provided. Some studies included transmissions costs, and some of the CCS studies included storage and sequestration costs, while others did not. Vertical axis is capped at USD2020 0.30 kWh –1 , but some estimates for hydro, geothermal, natural gas and bioelectricity were higher than 0.30. The grey horizontal band denotes the range of fossil fuel electricity LCOEs circa 2020.

A more direct metric of mitigation options is the cost to reduce one tonne of CO 2 or equivalent GHGs, or USD tCO 2 -eq –1 avoided. In addition to the comparison challenges noted above, this metric must account for the costs and emissions of the emitting options that are being displaced by the low-carbon option. Assumptions about the displaced option can lead to very different mitigation cost estimates (Table 6.9). Despite these challenges, these metrics are useful for identifying broad trends and making broad comparisons, even from the global perspective in this assessment. But local information will always be critical to determine which options are most cost-effective in any specific applications.

The feasibility and desirability of mitigation options extends well beyond the market economic costs of installation and operation ( [[#6.4.1|Section 6.4.1]] ). Figure 6.19 summarises the barriers and enablers for implementing different mitigation options in energy systems. The feasibility of different options can be enhanced by removing barriers and/or strengthening enablers of the implementation of the options. The feasibility of options may differ across context (e.g., region), time (e.g., 2030 versus 2050), scale (e.g., small versus large) and the long-term warming goal (e.g., 1.5°C versus 2°C).

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[[File:86c580c1b7671fb436126467a37fcf26 IPCC_AR6_WGIII_Figure_6_19.png]]

'''Figure 6.19 | Summary of the extent to which different factors would enable or inhibit the deployment of mitigation options in energy systems.''' Blue bars indicate the extent to which the indicator enables the implementation of the option (E) and orange bars indicate the extent to which an indicator is a barrier (B) to the deployment of the option, relative to the maximum possible barriers and enablers assessed. An X signifies that the indicator is not applicable or does not affect the feasibility of the option, while a forward slash indicates that there is no or limited evidence whether the indicator affects the feasibility of the option. The shading indicates the level of confidence, with darker shading signifying higher levels of confidence. Appendix II provides an overview of the factors affecting the feasibility of options and how they differ across context (e.g., region), time (e.g., 2030 versus 2050), and scale (e.g., small versus large), and includes a line of sight on which the assessment is based. The assessment method is explained in Annex II.11.

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