The US could struggle to reach President Joe Biden’s ambitious target to reach net zero emissions from the US power sector by 2035 and the broader economy by 2050, according to fresh analysis from consultancy Wood Mackenzie.

WoodMac claims technological limitations, policy design, market structures and even the political and constitutional foundations in the US could hamper the pace of progress to meeting the net zero targets.

Are you missing out on ACCELERATE?
Gain valuable insight into the global oil and gas industry's energy transition from ACCELERATE, the free weekly newsletter from Upstream and Recharge.

Researchers found that current proposals for climate-related spending in the US fall far short of the $10 trillion WoodMac believes will be needed between now and 2050 to achieve the Biden administration’s net zero goals.

Under the consultant’s base-case scenario — which it sees as the most likely outcome, taking into account the expected evolution of policy and technology over the coming decades — energy generation capacity from wind, solar, nuclear and hydro is likely to grow rapidly to about 1170 gigawatts in 2035.

That would equate to a rise of about 845GW compared to 2020 levels, however meeting Biden’s even more ambitious net zero targets will require even faster growth.

“Achieving this will take tremendous effort. All sectors of the energy industry will have to be transformed,” David Brown, head of markets and transitions at WoodMac said.

“For example, wind and solar power would have to become the largest sources of generation by 2035, alongside massive expansion in carbon capture and zero-carbon hydrogen.”

'Expensive and full of unknowns'

The consultants' base-case scenario sees the share of hydrocarbons in US energy consumption at about 67% by 2050. However, in order to reach net zero emissions, that figure would need to shrink to just 32%, requiring more rapid growth from other sources.

Wind and solar power capacity would need to total 2705GW by 2050 under the net zero scenario, some 500GW more than WoodMac anticipates capacity to reach under its base-case scenario.

Battery storage capacity would also need to total 677GW by 2050, more than 100GW above the 551GW anticipated under the base-case scenario.

While adding wind and solar would be relatively inexpensive, director of Wood Mackenzie’s North America power service, Brain McIntosh, claimed solutions to maintain reliability and resilience would be both “expensive and full of unknowns”.

“A multi-day storage solution is needed in a net zero world but we think we can expect no more than 10 to 15-hour durations from battery storage by 2035,” he said.

“The remaining gas-fired power plants will need to be fitted with carbon capture and storage but the technology’s ability to deal with large-scale carbon emissions in the power sector needs to be proven.”

Carbon capture, utilisation and storage, along with direct air capture, capacity would need to total about 961 million tonnes by 2050 under the net zero scenario, a sharp increase from the 25 million tonnes per annum capacity currently in the US.

Meanwhile, blue and green hydrogen production will need to total about 115 million tpa under WoodMac’s net zero scenario, well above the 33 million tpa that it anticipates will be produced under its base-case scenario.

The consultants' research also found that in order to hit the 2035 and 2050 net zero goals, US total energy demand will need to peak by the end of this year.

WoodMac claims that the US goal of a net zero power sector by 2035 is one of the most ambitious decarbonisation targets globally and will be extremely challenging to meet.

Based on its understanding of technologies, market policies, the challenges of quickly building transmission lines and the electrification of energy, the consultants' research found that 66% clean generation by 2035 was a more feasible target.

Electric vehicle rollout

In addition to electrification and energy efficiency, accelerating the take-up of electric vehicles will also be vital in the US reducing emissions.

Just last month, Biden signed an executive order setting a goal that 50% of all new passenger cars and light trucks sold in the US by 2030 be zero emissions, which includes battery electric vehicles, plug-in hybrids and fuel-cell vehicles.

“Our net zero scenario for the US transport sector suggests annual EV sales through the end of the decade would need to be around 50% higher than in our base case, which shows a zero-emissions market share of only 27% in 2030,” added head of Road Transport at Wood Mackenzie, Ram Chandrasekaran.

This rapid uptake of EVs could also pose a problem for power markets, with WoodMac claiming new EV buyers would, on average, see a 20% to 30% increase in their household power consumption.

“Should EV sales accelerate beyond our base case, transmission providers and utilities would need to sharpen their focus on managed charging, reliability and grid resilience to handle the surge in power demand,” Chandrasekaran added.

US system of government presents challenges

WoodMac noted that the structure of the US system of government would create a serious challenge to the Biden administration meeting its ambitious climate goals.

It highlighted the separation of powers and the federal system placed constraints on executive authority and would limit Biden’s ability to make progress towards his climate objectives compared to his counterparts in many other countries.

While he may be able to use executive actions and regulations to try to drive down emissions, they would likely still face legal challenges, while there is also the prospect of them being reversed by future administrations.