CMI Annual Report 2022

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Overcoming Challenges Facing the Execution of Net-Zero Energy Ambitions PRINCIPAL INVESTIGATOR: CHRIS GREIG At a Glance Attaining net-zero by midcentury requires the sustained development and deployment of energy and industrial infrastructure at a speed, scale and complexity that is unprecedented in human history. No major economy appears to be comprehensively on track to achieve its net-zero commitment. Models used to design policies that support preferred pathways currently lack consideration of many real-world conditions, which could hamper the speed at which nations, sectors and individual companies attempt to make the energy transition. This research tries to better understand the net-zero challenge, track progress, and identify and overcome these limits to the speed at which societies decarbonize. Research Highlight At its core, the net-zero transition is a coordination challenge involving vast numbers of independent actors across multiple sectors. These players in energy, industry and materials ecosystems deliver supply- and demand-side assets and invest in and connect infrastructure. Integrated assessment and other macro-scale energy systems models (IAMs) that explore decarbonization pathways are influential in shaping energy and climate policy. They also play a role in determining whether nations, sectors and individual companies are on track to meet various commitments, such as the Paris Agreement. However, these IAMS do not adequately represent how such assets are conceived, developed and built in this complicated landscape. Consequently, they frequently miss critical constraints and bottlenecks that hold back progress in different settings and at different scales. In 2022, the researchers sought to capitalize on the Net-Zero America study, thus commencing a similar one for Australia. There, the objective is to describe pathways that decarbonize Australia’s relatively small domestic economy while also transitioning its very large-scale coal and liquified natural gas exports to zero-carbon, hydrogen-based carriers. The Net-Zero Australia study will release its final report in 2023. 17 Carbon Mitigation Initiative Twenty-second Year Report 2022
Figure 2.1. Stylized project investment decision sequence. Researchers have developed a framework to identify and overcome the limitations of existing decarbonization modeling frameworks that do not truly represent the way risk-capital is mobilized. As successful projects advance from left to right in sequence, the level of project definition, confidence in the business case and availability of capital increase, while the investment risk profile and cost of capital decrease. (Greig et al., 2023). Other research explored the issue of capital discipline (i.e. processes undertaken by investors to limit investment risks) and its speed-limiting effect on the transition for both largerand smaller-scale projects. A conceptual framework was developed to reverse engineer the sequence of decisions in development and construction activities represented by macroscale transitions (e.g., Net-Zero America’s gigatonne per year carbon capture and storage projections to 2050). This allows one to identify critical “chicken-or-egg” challenges that create investment hesitancy and design policy interventions to speed up decisions (Uden et al., 2022). In an extension of the capital discipline theme, further research examined the investment decision-making and capital formation processes applied by developers and investors in the energy transition. Looking at the transition through this lens highlighted a critical disconnect between the risk profile of project development and the very large pools of capital claiming to be ready to fund the net-zero transition (Greig et al., 2023; Figure 2.1). Carbon Mitigation Initiative Twenty-second Year Report 2022 18
Page 1 and 2: Annual Report 2022
Page 3 and 4: Contents INTRODUCTION 1 RESEARCH -
Page 5 and 6: The Carbon Mitigation Initiative (C
Page 7 and 8: gases. Knowing how much hydrogen le
Page 9 and 10: Best Paper Awards 2022 Since 2010,
Page 11 and 12: Research - At a Glance REPEAT Proje
Page 13 and 14: Understanding Drivers of Hurricane
Page 15 and 16: How the Orography-Aware Land Model
Page 17 and 18: Research Highlight The Biden Admini
Page 19: Figure 1.2. Difference in sectoral
Page 23 and 24: IRA Impacts on Prospective Economic
Page 25 and 26: Figure 3.1a. Levelized cost of fuel
Page 27 and 28: Figure 3.2a. Levelized cost of fuel
Page 29 and 30: India’s Deccan Traps Appear to Ha
Page 31 and 32: Figure 4.1a-d. Mapping the Deccan T
Page 33 and 34: Pore Structure and Permeability of
Page 35 and 36: Projecting the Expansion and Impact
Page 37 and 38: References Busecke, J.J.M., J. Resp
Page 39 and 40: 2022, 2023). This work has enabled
Page 41 and 42: Hsieh, T. L., G.A. Vecchi, W. Yang,
Page 43 and 44: methane and hydrogen (Bertagni et a
Page 45 and 46: The CMI Wetland Project: Understand
Page 47 and 48: particularly pronounced during the
Page 49 and 50: Land Conversion to Store Carbon: Th
Page 51 and 52: Understanding How Economic Incentiv
Page 53 and 54: The second part of our project dive
Page 55 and 56: may begin to convert to savanna bef
Page 57 and 58: Ongoing Research at the Pacala Lab
Page 59 and 60: Stanford Business School Dean Jon L
Page 61 and 62: Cipolla, G., S. Calabrese, A. Porpo
Page 63 and 64: Uden, S., and C. Greig, 2022. “Wh
Page 65 and 66: The cover and text pages of this re

CMI Annual Report 2022

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