The U.S. Department of Energy (DOE) plays a critical role in accelerating the commercialization of clean energy technologies and enabling the nation’s broader industrial strategy. Recent legislation – namely the Infrastructure Investment and Jobs Act (IIJA) and Inflation Reduction Act (IRA) – have positioned DOE to invest billions of dollars in large-scale demonstration and deployment of these technologies over the next decade.

DOE’s new Pathways to Commercial Liftoff Reports provide public and private sector capital allocators with a perspective as to how and when various technologies could reach full-scale commercial adoption– including a common analytical fact base and critical signposts for investment decisions. Given the constantly and rapidly evolving market, technology, and policy environment, the Liftoff Reports are designed to be “living documents” and will be updated as the commercialization outlook on each technology evolves.

The first Liftoff Reports are focused on clean hydrogen, advanced nuclear, and long duration energy storage. These emerging technology areas have been chosen due to their anticipated role in the clean energy transition, to complement that of mature clean energy technologies. Each Liftoff Report takes the view of a single technology and is designed to provide a shared understanding on the current state, pathways to commercial scale, and challenges to liftoff for each technology.

The technologies discussed in the Liftoff Reports all have a critical role to play in the clean energy transition, but also face challenges to commercialization that need to be resolved through a combination of public and private sector actions and investments.

Advanced Nuclear

As a carbon-free, firm power generating resource, nuclear can play a critical role in complementing the buildout of variable renewables and providing a significant portion of the additional clean, firm capacity required in all decarbonization scenarios.

System modeling indicates achieving net-zero in the U.S. by 2050 requires adding on the order of 550–770 GW of additional clean, firm power. These same models indicate advanced nuclear is likely to be the economic option for at least 200 GW of this capacity addition assuming expected overnight capital cost reductions, comparing favorably with other clean, firm options. Deploying ~200 GW of nuclear capacity in the U.S. could require ~$700B in capital formation by 2050, with $35-40B required by 2030. Challenges with transmission expansion, interconnection, land-use intensity, and other factors limiting renewables buildout are likely to make nuclear an even more attractive option.

New deployment of advanced reactors at scale, however, will depend heavily on taking action toward building a committed orderbook of 5-10 projects by 2030; and achieving predictable construction timelines and cost profiles, by incorporating lessons learned from Units 3 and 4 at the Alvin W. Vogtle Electric Generating Plant, two Westinghouse AP1000 pressurized water reactors.

Clean Hydrogen

Clean Hydrogen will play a particularly important role in decarbonizing sectors that are more difficult to decarbonize, such as refining, chemicals, and heavy-duty transport.

The U.S. clean hydrogen market is poised for rapid growth, accelerated by DOE’s Hydrogen Hub funding, the hydrogen production tax credit (PTC), DOE’s Hydrogen Earth Shot, and decarbonization goals across the public and private sectors. Clean hydrogen production has the potential to scale from nearly zero today to ~10 million metric tons per year (MMTpa) in 2030 across industrial, transportation, and power sector use cases and 50 MMTpa by 2050; representing an investment opportunity of $85-215B through 2030.

In many cases, the clean hydrogen PTC pulls forward Total Cost of Ownership breakeven points to within the next ~5 years for best-in-class projects (e.g., those with access to high-capacity factor renewables) across industrial and transport applications. BIL and IRA provisions have catalyzed production, such that announced clean hydrogen production projects at EOY 2022 would meet 2030 demand projections, with more announcements expected.

However, favorable supply-side dynamics will be insufficient to scale the market, unless current chicken-and-egg challenges between scaling midstream infrastructure and end-use applications are also addressed. Clusters of hydrogen projects (including adjacent production/offtake) and regional hydrogen hubs around the U.S. (including hubs to be supported by DOE funding) will provide important proof points to scaling clean hydrogen and expanding regional distribution/offtake networks.

Long Duration Energy Storage

Long Duration Energy Storage (LDES) can provide critical flexibility and reliability in a future decarbonized power system. In addition, LDES could be an important solution to improve local and regional resiliency with increasing frequency of extreme-weather events, while also reducing the cost and risks around grid expansion.

The U.S. grid may need on the order of 225-460 GW of LDES capacity for power market applications for net zero systems, representing $330B in cumulative capital investment. While this requires significant levels of investment, analysis shows that by 2050 net-zero pathways that deploy LDES result in $10-20B in annualized savings in operating costs and avoided capital expenditures by 2050 compared to pathways that do not.

LDES includes a set of diverse technologies that share the goal of storing energy for 10 to 160 hours of duration of dispatch. The LDES report defines and analyzes two market segments: Inter-day LDES (10-36 hours) and Multi-day LDES (36-160+ hours).

To deploy LDES technologies at scale will require action in three areas: public and private investment to drive down cost and improve performance; market intervention and reform to compensate differentiated performance and services; and flexible and rapid supply chain formation to avoid deployment bottlenecks ahead of a potential surge in demand.

To read the Liftoff Reports, please click here.

Dive Brief:

• Nearly one-fourth of the current U.S. coal-fired fleet is scheduled to retire by 2029, providing opportunities to site advanced nuclear plants, specifically small modular reactors, or SMRs, a Washington, D.C. think tank says in a recent report.
• The reactors can reuse coal plant electrical equipment and steam-cycle components that, combined with reuse of transmission and administrative buildings, can reduce SMR construction costs by 17% to 35%, according to John Jacobs and Lesley Jantarasami, authors of “Can Advanced Nuclear Repower Coal Country?” released this month by the Bipartisan Policy Center.
• The Nuclear Regulatory Commission’s certification in January of NuScale Power’s SMR design, the country’s first such federal approval, “pushes the technology closer to maturity,” the report said.

The report says 80% of evaluated coal plants have the “basic characteristics” needed to be repowered by an SMR, according to a Department of Energy study analyzing coal plants recently retired and those soon to be. Nuclear reactors and coal power plants both provide dispatchable energy “24/7 regardless of weather conditions, time of day or the season,” it said.

“Renewables have a vital and substantial role to play in a decarbonized energy grid,” the report said. “Yet, it is essential to complement their variability with the construction of firm power capable of filling the gaps and maintaining reliability.”

Other benefits highlighted by the report are SMRs’ flexible power output levels that allow developers to match the output of a retiring coal plant and capacity restrictions of equipment, unlike the fixed capacity of traditional nuclear plants. And SMRs require small areas, making its footprint suitable for replacing a retiring coal plant, according to the report.

Re-using coal plant sites could also have labor force advantages, with 77% of jobs transferable to nuclear plants with no new workforce licensing requirements, the report said.

SMRs can reuse coal plant transmission infrastructure, reducing SMR construction costs and avoiding some permitting challenges. And the reactors can reuse coal plant electrical equipment and steam-cycle components that, combined with reuse of transmission and administrative buildings, can reduce SMR construction costs by 17% to 35%, according to the report.

The issue of shifting coal sites to nuclear energy production has been around for a while. The U.S. Department of Energy issued a report in September saying hundreds of coal sites could be converted to nuclear power plants that would add jobs, increase economic benefits and improve environmental conditions.

Coal is responsible for the largest share of CO2 emissions from the energy sector, making its phase-out key to tackling climate change, according to the International Energy Agency. 

Continue reading >>