Does En-ROADS assume that fossil plants run to end of life?
The documentation appears to say that here:
This support post appears to confirm it:
I think this is a bad assumption in certain cases. If my cost to buy a trainload of coal is 3 cents/kWh, and a new technology has a total levelized cost of 1 cent/kWh, then by burning coal I'm losing 2 cents/kWh compared to installing the new tech. I have a similar situation if there's no new tech, but a carbon fee raises my fuel cost to 20 cents/kWh.
Note I am not saying fossil will be replaced just because low-carbon is cheaper overall. I'm only saying a fossil plant will be retired early if the total cost of a competitor is less than the variable cost of the fossil plant.
In the real world, we actually have seen many coal plants close down early for economic reasons, so this does not seem to be an outlandish claim.
I've seen people reference En-ROADS to say that breakthrough technologies and high carbon prices would have limited impact on emissions. I think this is problematic if, in effect, En-ROADS encodes this outcome as a starting assumption by assuming fossil plants always run to end of life.
Great question! No, En-ROADS does not assume that fossil fuel plants run to end of life. Profitability affects retirement rates; a source that is not profitable will increase the rate of retirement. Also, profitability (revenue minus total costs) affects new capacity started. These are both long term effects. The unit margin (revenue minus variable costs) affects the utilization of the current capacity.
Breakthrough technologies have a limited impact on emissions because they take so long to scale up and for the necessary infrastructure and electrification to be added. High carbon prices on the energy supply are one of the highest leverage actions, but reducing non-fossil fuel greenhouse gas emissions is also necessary.
Ah, ok good! Although I do wish En-ROADS had been too pessimistic. Thanks!