Brattle Report Analyzes the Carbon Abatement Value of Existing Clean Energy Resources
Prepared for Constellation Energy Corporation
In a new report, experts from The Brattle Group evaluate the critical role that existing clean energy resources must play in helping to achieve greenhouse gas (GHG) emissions reduction goals. The authors find that the premature retirement of clean resources such as nuclear plants could undermine progress on decarbonization, particularly amid the current unprecedented surge in electricity demand.
The report, Carbon Abatement Value of Existing Clean Generators, highlights both the emissions consequences and resource adequacy implications of clean energy retirements. The authors emphasize the need for updated policy frameworks to support both existing and new clean energy generators, arguing that retaining existing nuclear and hydropower plants – which currently provide 61% of the nation’s clean electricity – is essential for achieving GHG targets.
“Pursuing new clean energy development while allowing existing clean resources to retire is like filling a bathtub with the drain open,” said Brattle Principal Dr. Dean Murphy, lead author of the report. “Over a dozen nuclear units have retired prematurely since 2012, offsetting much of the clean power that has been added with wind, solar, and biomass. Further retirements will make it even harder to meet decarbonization goals.”
Notable findings from the report include:
- Allowing existing resources to qualify for voluntary procurement is unlikely to flood the carbon-free electricity (CFE) market or dampen demand for new resources. Growing voluntary clean energy demand, combined with policy-driven demand for renewable and clean energy, is likely to outstrip total supply – including existing supply – in PJM in the 2030s.
- Existing clean energy resources prevent significant GHG emissions; the lost output of clean energy resources that are retired will largely be replaced by fossil fuel generation (especially gas) in the near term. They also provide significant system resource adequacy benefits.
- Real-world constraints create challenges for replacing retiring clean energy resources. Existing clean resources provide significant system resource adequacy benefits that can be challenging to replace fully with new renewables. Further, interconnection delays, supply-chain challenges, long lead times to plan and build new transmission infrastructure, and surging demand growth limit the near-term growth of new clean generation assets.
- The economic viability and continued clean energy contributions of merchant nuclear plants can depend on whether and how they are compensated for their clean attributes. Unlike rate-regulated nuclear plants, merchant plants rely on market revenues and may need compensation for their clean attributes to remain operational.
- Policy support for clean energy has focused on new resources, but existing generators remain economically vulnerable. While some policy tools and mechanisms – like Zero-Emissions Credit (ZEC) programs – have begun recognizing the value of existing clean assets, many are time-limited. Their expiration will leave many clean energy generators, especially merchant nuclear plants, facing steep economic challenges.
Carbon Abatement Value of Existing Clean Generators was prepared for Constellation Energy. It was coauthored by Brattle Principal Dr. Dean Murphy and Energy Specialist Jadon Grove. The full report can be found below.
