Electrification and the Future of Electricity Markets: Transitioning to a Low-Carbon Energy System

Abstract

End-use electrification is one of the three pillars of deep decarbonization, which are fundamental strategies necessary to eliminate energy-system carbon emissions. As a low-carbon strategy, electrification is only effective when paired with reductions in the emissions intensity of electricity generation. Thus, any discussion of electrification's role in reducing carbon emissions, either through the direct electrification of end uses but also fuel switching to electricity derived fuels, must include supply-demand interactions within the electricity system. This article highlights what these interactions may look like in the transition to a very low-carbon energy system in the United States and some potential implications for the future of the grid and wholesale electricity markets. The concepts are primarily illustrated using updated scenarios from the 2014 U .S. Deep Decarbonization Pathways Project (DDPP ) technical report.