Abstract:
Achieving net-zero greenhouse gas emissions in the energy system requires substantial electrification of transportation and many industrial applications, utilizing net-zero generation resources in conjunction with net-zero gas and heat systems. This paper describes and evaluates a centralized net-zero energy system with liberalized electricity, gas, and heat production facilities, a regulated network utility, and the operator of the net-zero system. Existing market-based electricity systems in Europe and the United States provide the starting point for transitioning to a net-zero energy system and inform the design choices needed to enable that. Such centralized net-zero energy systems may improve system efficiency and reliability through jointly optimizing electricity and gas operations and planning, while accommodating regional policy and governance preferences. Their success depends on whether existing market and regulatory practices can be extended, and new practices developed, to satisfy the multiple policy objectives of net-zero energy systems, accommodate emerging net-zero energy technologies, successfully optimize markets with multiple energy products, efficiently regulate markets and network investment, and implement effective governance.