A Decarbonized Future

Our Vision for a Net Zero and Reliable Power Industry

110+ countries and
200+ of the world’s largest
companies have pledged
to achieve net zero carbon
by or before 2050

These companies include more
than 50 major utilities.

It is on all of us to reach this
critical goal, but the power
industry must lead the way,
enabling the electrification
and decarbonization of the
broader economy.

The question:
How does the U.S. Power
Sector achieve net zero by
2050?

The question:
How does the U.S. Power
Sector achieve net zero by
2050?

The question:
How does the U.S. Power
Sector achieve net zero by
2050?
By transforming how we’ve
generated and distributed
power until now.

The industry needs a holistic and realistic plan. We must innovate to make meaningful progress today and create tomorrow’s reliable, cost-effective energy system.

Mitsubishi Power understands the solutions power producers need to navigate the energy transition: We are moving with a sense of urgency to develop them, while also working to ensure resource adequacy and affordability.

Power Requirements Throughout the Energy Transition:

This Is Our Blueprint for Decarbonization

We’re calling on the power industry to join us.

Ensure Clean, Reliable Electricity

Throughout the Energy Transition

As the industry adopts cleaner sources of power, reliability is essential.

To ensure the energy transition is seamless, power producers will need to:

Replace Coal with Natural Gas and Renewables
Decrease Natural Gas Usage with Stored Renewables
Electrify Everything Possible
Deliver Hydrogen to Hard-to-Electrify Sectors

To decarbonize and enable other sectors to do the same, power producers must evolve their operations — some more than others, depending on their equipment and the local market.

Replace Coal with Natural Gas and Renewables

This transition has been underway in the United States for the past 20 years and is the primary reason the power sector has already achieved a 40% reduction in emissions.

U.S. Power Sector Carbon Index (lb CO2/MWh)

20012003200520072009201120132015201720192001 Annual Level1400800040% Below 2001

Over the next 15 years, we believe power producers will retire the remaining fleet of U.S. coal-fired power plants. States will shift production to cleaner methods at different rates, depending on local regulations and market conditions. Regardless of each state’s individual pace, momentum for replacing coal must continue.


EARLY ADOPTER

California represents one end of the spectrum. It now generates nearly a third of its electricity from renewables.

The state is set to retire its last coal-fired facility in 2025, replacing it with
an 840 MW hydrogen-capable power plant.


Decrease Natural Gas Usage with Stored Renewables

Whether power producers retired coal or skipped that step by avoiding coal altogether, they will use more natural gas and renewables. But they must then decrease their reliance on natural gas.

They should do this by integrating renewable energy storage of all durations, short or long.

This allows them to decarbonize while also ensuring resource adequacy.

U.S. Power Sector Carbon Index (lb CO2/MWh)

2001 Annual Level40% below 200180% below 2001140080040002001201920302039

We will continue with rapid decarbonization, with an 80% reduction below 2001 carbon levels estimated by 2030.

We will need energy storage of all durations to continue to rapidly decarbonize.

U.S. Power Sector Carbon Index (lb CO₂/MWh)

2001 Annual Level40% below 200180% below 2001140080040002001201920302039

We will need energy storage of all durations to continue to rapidly decarbonize.

Storing energy from renewables for different periods of time allows states to tailor their individual transition. For instance, California’s renewables typically generate excess power during midday. By storing the excess for several hours in lithium-ion batteries, utilities can use this renewable energy in the early evening, during peak demand.

Texas, the largest producer of wind energy in the United States, uses these batteries for even shorter-term storage (an hour or less) to smooth out uneven generation from wind. Over time, we expect the power grid will look more like California and require both short- and long-duration energy storage.

The power industry will continue to increase renewable usage by installing longer-duration storage. Systems with high levels of renewables and short-duration energy storage rely on natural gas generation for resource adequacy. As these systems decarbonize, they will move from natural gas generation to long-duration energy storage. Long-term storage will allow utilities to store energy from renewables for hours, days, weeks, or even seasons after it’s produced, enabling them to respond to seasonal demand spikes as well as extreme weather events that can otherwise cripple the grid.

Analysis of Western U.S. Generation and Curtailment

  • Wind, Solar & Hydro
  • Natural Gas & Coal
  • Nuclear & Other
  • Battery
  • Green Hydrogen
  • Curtailment
  • CO2

Generation from solar and wind increases rapidly over time, resulting in excess renewables and high rates of curtailment.

However, adding long-duration energy storage in the form of green hydrogen results in less curtailment, without the need to overbuild renewables or battery storage. It also reduces the use of natural gas and further lowers carbon emissions to zero.

Analysis of Western U.S. Generation and Curtailment

  • Wind, Solar & Hydro
  • Natural Gas & Coal
  • Nuclear & Other
  • Battery
  • Green Hydrogen
  • Curtailment
  • CO2

However, adding long-duration energy storage in the form of green hydrogen results in less curtailment, without the need to overbuild renewables or battery storage. It also reduces the use of natural gas and further lowers carbon emissions to zero.

The key to long-term storage is green hydrogen, the lowest-cost solution. The technology needed is already under construction today.

In Utah, Mitsubishi Power and Magnum Development are developing the Advanced Clean Energy Storage project, which will be the world’s largest energy storage facility. The project will produce green hydrogen and store it underground in salt dome caverns the size of the Empire State Building.

As we make long-term storage solutions available, we must scale up electrolysis, the process that uses renewables to split water molecules and produce green hydrogen.

Electrify Everything Possible

The progression to clean, reliable sources of power means the industry can provide low-carbon or carbon-free power to other industries, enabling them to electrify with minimal or no emissions.

Electrification is essential for broad decarbonization. As sustainability becomes imperative throughout the economy, companies will look to electrify high-emissions areas such as mobility and heat. The global demand for electricity is expected to climb dramatically over the next three decades.

The demand for electricity worldwide is expected to more than double between 2020 and 2050.

As industry electrifies, it will make up a significant portion: an estimated 11,000 terawatt-hours.

To help end users achieve electrification’s environmental benefits, the power industry must have the necessary infrastructure for adequate and resilient natural gas and renewable power.

Deliver Hydrogen to Hard-to-Electrify Sectors

With hydrogen production infrastructure in place, the costs of green and blue hydrogen will have dropped as the technology scaled. This makes hydrogen an increasingly affordable and available zero carbon fuel. It will be used to decarbonize other carbon-intensive and difficult-to-electrify industries such as steelmaking, long-haul trucking and air transport.

Hydrogen pipelines, located along highways, will make this clean fuel readily accessible, expediting the transition to hydrogen-powered cars and trucks. Carbon capture, utilization and storage (CCUS) can also be used to reduce emissions for any remaining fossil fuel needs.

Hydrogen Power Plants Drive Scale;
Filling Stations Drive Utilization Rates

Hydrogen
Fueling Station
5 TPD

Power Plant
30% Hydrogen Demand
75 TPD

Power Plant
100% Hydrogen Demand
600 TPD

For transportation, we’ll have dedicated renewable generation to produce hydrogen as a fuel. A green hydrogen fueling station will be a smaller facility, but it will have high utilization rates and high capacity factors for the electrolyzers, which bring down the costs.


Hydrogen Power Plants Drive Scale;
Filling Stations Drive Utilization Rates

Hydrogen
Fueling Station
5 TPD

Power Plant
30% Hydrogen Demand
75 TPD

Power Plant
100% Hydrogen Demand
600 TPD

By storing excess renewable electricity for the grid, the power sector will drive scale in hydrogen. We’ll have dedicated renewable generation to produce enough fuel, and these plants will require large electrolysis installations.

Sector Coupling Pricing Synergy Between Power Sector
and Transportation Sector ($/kg)

Coupling power and transportation gets us closer to lower-cost green hydrogen than having either industry do it alone.

Incentivize Technology Adoption by Lowering Costs

to Expand the Viable Market for Decarbonization

We need a viable market for emerging decarbonization solutions, but cost is a major obstacle. They’re expensive — at first. We need to remember that we, the power industry, can impact pricing — and we should, starting with green hydrogen.

We’ve done it before.

Green hydrogen is at the same inflection point on the cost curve in 2021 as previous technologies were before pricing improved:

Natural gas in

2006

Onshore wind in

2008

Solar in

2012

Lithium-ion batteries in

2015

The power industry should leverage seven drivers of lowering the cost of green hydrogen, to stimulate adoption.

1
Industry Scale
  • Manufacturing volume effect. Applies to the scale of electrolysis, use of automated manufacturing
2
Renewable Power
  • Leads to lower prices for electricity to power electrolysis and supports more renewable integration
3
Sector Coupling
  • H2 stored for power generation also becomes available for transportation, steel and concrete manufacturing, etc.
  • Capital for hydrogen production distributed over multiple sectors
4
Government Incentives
  • ITC, PTC, carbon tax for investment
  • Electric tariff and policy supporting hydrogen generation for cheap electricity
5
Geography
  • Regional renewable policy
  • Storage needs and summer/winter peaks needs
6
System Optimization
  • Optimized renewables build and BESS, leading to overall optimized system across sectors
7
Technology
  • Turbine materials, combustor technology
  • Improvement in electrolyzer efficiency

According to McKinsey, by 2030, green hydrogen could be as cheap as gray hydrogen, which is more commonly used today but not emissions-free.

By removing the economic hurdles for a variety of solutions, we create an expanding and viable market for decarbonization.

Foster Unprecedented Collaboration

to Meet Future Demand

While we’re transforming the power
industry, we need to produce far more
power over the next three decades than we
do today…

nearly double
to meet future demand.

While we’re transforming the power industry, we need to produce far more power over the next three decades than we do today…

nearly double
to meet future demand.

We seek to combat climate change but also advance human prosperity with energy equity, new jobs and economic growth. We need to convene and collaborate with businesses, policymakers, NGOs and communities like never before to realize this dual mission.

The energy transition requires both existing and new technologies — from carbon storage and gas turbines to lithium-ion batteries, photovoltaic systems, hydrogen production and storage, and fuel cells. We must be open to many paths to net zero and be determined to create new ones. It’s how we, as an industry, will be the beneficiaries, and not the victims, of change.

Industry leaders need to be entrepreneurial collaborators. Innovative ideas can come from anywhere, so it’s critical to encourage creative thinking and demonstrate that we embrace new ways of solving old problems. Entrepreneurship is a contagious way of thinking and working — and we want it to spread, to generate ideas from all corners of the industry to achieve this big, bold goal.

It’s why we are partnering with Magnum Development in Utah to make utility-scale, long-term storage a viable solution and with the governments of Utah, Montana and California to distribute that 1 gigawatt of clean energy.

The more we demonstrate how powerful these collaborations are, the more such collaborations we’ll see throughout the industry. It’s the sort of self-perpetuating dynamic we need to achieve net zero.

Together, we can create a Change in Power.

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