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    To improve solar and other clean energy tech, look beyond hardware

    To continue reducing the costs of solar energy and other clean energy technologies, scientists and engineers will likely need to focus, at least in part, on improving technology features that are not based on hardware, according to MIT researchers. They describe this finding and the mechanisms behind it today in Nature Energy.

    While the cost of installing a solar energy system has dropped by more than 99 percent since 1980, this new analysis shows that “soft technology” features, such as the codified permitting practices, supply chain management techniques, and system design processes that go into deploying a solar energy plant, contributed only 10 to 15 percent of total cost declines. Improvements to hardware features were responsible for the lion’s share.

    But because soft technology is increasingly dominating the total costs of installing solar energy systems, this trend threatens to slow future cost savings and hamper the global transition to clean energy, says the study’s senior author, Jessika Trancik, a professor in MIT’s Institute for Data, Systems, and Society (IDSS).

    Trancik’s co-authors include lead author Magdalena M. Klemun, a former IDSS graduate student and postdoc who is now an assistant professor at the Hong Kong University of Science and Technology; Goksin Kavlak, a former IDSS graduate student and postdoc who is now an associate at the Brattle Group; and James McNerney, a former IDSS postdoc and now senior research fellow at the Harvard Kennedy School.

    The team created a quantitative model to analyze the cost evolution of solar energy systems, which captures the contributions of both hardware technology features and soft technology features.

    The framework shows that soft technology hasn’t improved much over time — and that soft technology features contributed even less to overall cost declines than previously estimated.

    Their findings indicate that to reverse this trend and accelerate cost declines, engineers could look at making solar energy systems less reliant on soft technology to begin with, or they could tackle the problem directly by improving inefficient deployment processes.  

    “Really understanding where the efficiencies and inefficiencies are, and how to address those inefficiencies, is critical in supporting the clean energy transition. We are making huge investments of public dollars into this, and soft technology is going to be absolutely essential to making those funds count,” says Trancik.

    “However,” Klemun adds, “we haven’t been thinking about soft technology design as systematically as we have for hardware. That needs to change.”

    The hard truth about soft costs

    Researchers have observed that the so-called “soft costs” of building a solar power plant — the costs of designing and installing the plant — are becoming a much larger share of total costs. In fact, the share of soft costs now typically ranges from 35 to 64 percent.

    “We wanted to take a closer look at where these soft costs were coming from and why they weren’t coming down over time as quickly as the hardware costs,” Trancik says.

    In the past, scientists have modeled the change in solar energy costs by dividing total costs into additive components — hardware components and nonhardware components — and then tracking how these components changed over time.

    “But if you really want to understand where those rates of change are coming from, you need to go one level deeper to look at the technology features. Then things split out differently,” Trancik says.

    The researchers developed a quantitative approach that models the change in solar energy costs over time by assigning contributions to the individual technology features, including both hardware features and soft technology features.

    For instance, their framework would capture how much of the decline in system installation costs — a soft cost — is due to standardized practices of certified installers — a soft technology feature. It would also capture how that same soft cost is affected by increased photovoltaic module efficiency — a hardware technology feature.

    With this approach, the researchers saw that improvements in hardware had the greatest impacts on driving down soft costs in solar energy systems. For example, the efficiency of photovoltaic modules doubled between 1980 and 2017, reducing overall system costs by 17 percent. But about 40 percent of that overall decline could be attributed to reductions in soft costs tied to improved module efficiency.

    The framework shows that, while hardware technology features tend to improve many cost components, soft technology features affect only a few.

    “You can see this structural difference even before you collect data on how the technologies have changed over time. That’s why mapping out a technology’s network of cost dependencies is a useful first step to identify levers of change, for solar PV and for other technologies as well,” Klemun notes.  

    Static soft technology

    The researchers used their model to study several countries, since soft costs can vary widely around the world. For instance, solar energy soft costs in Germany are about 50 percent less than those in the U.S.

    The fact that hardware technology improvements are often shared globally led to dramatic declines in costs over the past few decades across locations, the analysis showed. Soft technology innovations typically aren’t shared across borders. Moreover, the team found that countries with better soft technology performance 20 years ago still have better performance today, while those with worse performance didn’t see much improvement.

    This country-by-country difference could be driven by regulation and permitting processes, cultural factors, or by market dynamics such as how firms interact with each other, Trancik says.

    “But not all soft technology variables are ones that you would want to change in a cost-reducing direction, like lower wages. So, there are other considerations, beyond just bringing the cost of the technology down, that we need to think about when interpreting these results,” she says.

    Their analysis points to two strategies for reducing soft costs. For one, scientists could focus on developing hardware improvements that make soft costs more dependent on hardware technology variables and less on soft technology variables, such as by creating simpler, more standardized equipment that could reduce on-site installation time.

    Or researchers could directly target soft technology features without changing hardware, perhaps by creating more efficient workflows for system installation or automated permitting platforms.

    “In practice, engineers will often pursue both approaches, but separating the two in a formal model makes it easier to target innovation efforts by leveraging specific relationships between technology characteristics and costs,” Klemun says.

    “Often, when we think about information processing, we are leaving out processes that still happen in a very low-tech way through people communicating with one another. But it is just as important to think about that as a technology as it is to design fancy software,” Trancik notes.

    In the future, she and her collaborators want to apply their quantitative model to study the soft costs related to other technologies, such as electrical vehicle charging and nuclear fission. They are also interested in better understanding the limits of soft technology improvement, and how one could design better soft technology from the outset.

    This research is funded by the U.S. Department of Energy Solar Energy Technologies Office. More

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    Embracing the future we need

    When you picture MIT doctoral students taking small PhD courses together, you probably don’t imagine them going on class field trips. But it does happen, sometimes, and one of those trips changed Andy Sun’s career.

    Today, Sun is a faculty member at the MIT Sloan School of Management and a leading global expert on integrating renewable energy into the electric grid. Back in 2007, Sun was an operations research PhD candidate with a diversified academic background: He had studied electrical engineering, quantum computing, and analog computing but was still searching for a doctoral research subject involving energy. 

    One day, as part of a graduate energy class taught by visiting professor Ignacio J. Pérez Arriaga, the students visited the headquarters of ISO-New England, the organization that operates New England’s entire power grid and wholesale electricity market. Suddenly, it hit Sun. His understanding of engineering, used to design and optimize computing systems, could be applied to the grid as a whole, with all its connections, circuitry, and need for efficiency. 

    “The power grids in the U.S. continent are composed of two major interconnections, the Western Interconnection, the Eastern Interconnection, and one minor interconnection, the Texas grid,” Sun says. “Within each interconnection, the power grid is one big machine, essentially. It’s connected by tens of thousands of miles of transmission lines, thousands of generators, and consumers, and if anything is not synchronized, the system may collapse. It’s one of the most complicated engineering systems.”

    And just like that, Sun had a subject he was motivated to pursue. “That’s how I got into this field,” he says. “Taking a field trip.”Sun has barely looked back. He has published dozens of papers about optimizing the flow of intermittent renewable energy through the electricity grid, a major practical issue for grid operators, while also thinking broadly about the future form of the grid and the process of making almost all energy renewable. Sun, who in 2022 rejoined MIT as the Iberdrola-Avangrid Associate Professor in Electric Power Systems, and is also an associate professor of operations research, emphasizes the urgency of rapidly switching to renewables.

    “The decarbonization of our energy system is fundamental,” Sun says. “It will change a lot of things because it has to. We don’t have much time to get there. Two decades, three decades is the window in which we have to get a lot of things done. If you think about how much money will need to be invested, it’s not actually that much. We should embrace this future that we have to get to.”

    Successful operations

    Unexpected as it may have been, Sun’s journey toward being an electricity grid expert was informed by all the stages of his higher education. Sun grew up in China, and received his BA in electronic engineering from Tsinghua University in Beijing, in 2003. He then moved to MIT, joining the Media Lab as a graduate student. Sun intended to study quantum computing but instead began working on analog computer circuit design for Professor Neil Gershenfeld, another person whose worldview influenced Sun.  

    “He had this vision about how optimization is very important in things,” Sun says. “I had never heard of optimization before.” 

    To learn more about it, Sun started taking MIT courses in operations research. “I really enjoyed it, especially the nonlinear optimization course taught by Robert Freund in the Operations Research Center,” he recalls. 

    Sun enjoyed it so much that after a while, he joined MIT’s PhD program in operations research, thanks to the guidance of Freund. Later, he started working with MIT Sloan Professor Dimitri Bertsimas, a leading figure in the field. Still, Sun hadn’t quite nailed down what he wanted to focus on within operations research. Thinking of Sun’s engineering skills, Bertsimas suggested that Sun look for a research topic related to energy. 

    “He wasn’t an expert in energy at that time, but he knew that there are important problems there and encouraged me to go ahead and learn,” Sun says. 

    So it was that Sun found himself in ISO-New England headquarters one day in 2007, finally knowing what he wanted to study, and quickly finding opportunities to start learning from the organization’s experts on electricity markets. By 2011, Sun had finished his MIT PhD dissertation. Based in part on ISO-New England data, the thesis presented new modeling to more efficiently integrate renewable energy into the grid; built some new modeling tools grid operators could use; and developed a way to add fair short-term energy auctions to an efficient grid system.

    The core problem Sun deals with is that, unlike some other sources of electricity, renewables tend to be intermittent, generating power in an uneven pattern over time. That’s not an insurmountable problem for grid operators, but it does require some new approaches. Many of the papers Sun has written focus on precisely how to increasingly draw upon intermittent energy sources while ensuring that the grid’s current level of functionality remains intact. This is also the focus of his 2021 book, co-authored with Antonio J. Conejo, “Robust Optimiziation in Electric Energy Systems.”

    “A major theme of my research is how to achieve the integration of renewables and still operate the system reliably,” Sun says. “You have to keep the balance of supply and demand. This requires many time scales of operation from multidecade planning, to monthly or annual maintenance, to daily operations, down through second-by-second. I work on problems in all these timescales.”

    “I sit in the interface between power engineering and operations research,” Sun says. “I’m not a power engineer, but I sit in this boundary, and I keep the problems in optimization as my motivation.”

    Culture shift

    Sun’s presence on the MIT campus represents a homecoming of sorts. After receiving his doctorate from MIT, Sun spent a year as a postdoc at IBM’s Thomas J. Watson Research Center, then joined the faculty at Georgia Tech, where he remained for a decade. He returned to the Institute in January of 2022.

    “I’m just very excited about the opportunity of being back at MIT,” Sun says. “The MIT Energy Initiative is a such a vibrant place, where many people come together to work on energy. I sit in Sloan, but one very strong point of MIT is there are not many barriers, institutionally. I really look forward to working with colleagues from engineering, Sloan, everywhere, moving forward. We’re moving in the right direction, with a lot of people coming together to break the traditional academic boundaries.” 

    Still, Sun warns that some people may be underestimating the severity of the challenge ahead and the need to implement changes right now. The assets in power grids have long life time, lasting multiple decades. That means investment decisions made now could affect how much clean power is being used a generation from now. 

    “We’re talking about a short timeline, for changing something as huge as how a society fundamentally powers itself with energy,” Sun says. “A lot of that must come from the technology we have today. Renewables are becoming much better and cheaper, so their use has to go up.”

    And that means more people need to work on issues of how to deploy and integrate renewables into everyday life, in the electric grid, transportation, and more. Sun hopes people will increasingly recognize energy as a huge growth area for research and applied work. For instance, when MIT President Sally Kornbluth gave her inaugural address on May 1 this year, she emphasized tackling the climate crisis as her highest priority, something Sun noticed and applauded. 

    “I think the most important thing is the culture,” Sun says. “Bring climate up to the front, and create the platform to encourage people to come together and work on this issue.” More

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    Making the case for hydrogen in a zero-carbon economy

    As the United States races to achieve its goal of zero-carbon electricity generation by 2035, energy providers are swiftly ramping up renewable resources such as solar and wind. But because these technologies churn out electrons only when the sun shines and the wind blows, they need backup from other energy sources, especially during seasons of high electric demand. Currently, plants burning fossil fuels, primarily natural gas, fill in the gaps.

    “As we move to more and more renewable penetration, this intermittency will make a greater impact on the electric power system,” says Emre Gençer, a research scientist at the MIT Energy Initiative (MITEI). That’s because grid operators will increasingly resort to fossil-fuel-based “peaker” plants that compensate for the intermittency of the variable renewable energy (VRE) sources of sun and wind. “If we’re to achieve zero-carbon electricity, we must replace all greenhouse gas-emitting sources,” Gençer says.

    Low- and zero-carbon alternatives to greenhouse-gas emitting peaker plants are in development, such as arrays of lithium-ion batteries and hydrogen power generation. But each of these evolving technologies comes with its own set of advantages and constraints, and it has proven difficult to frame the debate about these options in a way that’s useful for policymakers, investors, and utilities engaged in the clean energy transition.

    Now, Gençer and Drake D. Hernandez SM ’21 have come up with a model that makes it possible to pin down the pros and cons of these peaker-plant alternatives with greater precision. Their hybrid technological and economic analysis, based on a detailed inventory of California’s power system, was published online last month in Applied Energy. While their work focuses on the most cost-effective solutions for replacing peaker power plants, it also contains insights intended to contribute to the larger conversation about transforming energy systems.

    “Our study’s essential takeaway is that hydrogen-fired power generation can be the more economical option when compared to lithium-ion batteries — even today, when the costs of hydrogen production, transmission, and storage are very high,” says Hernandez, who worked on the study while a graduate research assistant for MITEI. Adds Gençer, “If there is a place for hydrogen in the cases we analyzed, that suggests there is a promising role for hydrogen to play in the energy transition.”

    Adding up the costs

    California serves as a stellar paradigm for a swiftly shifting power system. The state draws more than 20 percent of its electricity from solar and approximately 7 percent from wind, with more VRE coming online rapidly. This means its peaker plants already play a pivotal role, coming online each evening when the sun goes down or when events such as heat waves drive up electricity use for days at a time.

    “We looked at all the peaker plants in California,” recounts Gençer. “We wanted to know the cost of electricity if we replaced them with hydrogen-fired turbines or with lithium-ion batteries.” The researchers used a core metric called the levelized cost of electricity (LCOE) as a way of comparing the costs of different technologies to each other. LCOE measures the average total cost of building and operating a particular energy-generating asset per unit of total electricity generated over the hypothetical lifetime of that asset.

    Selecting 2019 as their base study year, the team looked at the costs of running natural gas-fired peaker plants, which they defined as plants operating 15 percent of the year in response to gaps in intermittent renewable electricity. In addition, they determined the amount of carbon dioxide released by these plants and the expense of abating these emissions. Much of this information was publicly available.

    Coming up with prices for replacing peaker plants with massive arrays of lithium-ion batteries was also relatively straightforward: “There are no technical limitations to lithium-ion, so you can build as many as you want; but they are super expensive in terms of their footprint for energy storage and the mining required to manufacture them,” says Gençer.

    But then came the hard part: nailing down the costs of hydrogen-fired electricity generation. “The most difficult thing is finding cost assumptions for new technologies,” says Hernandez. “You can’t do this through a literature review, so we had many conversations with equipment manufacturers and plant operators.”

    The team considered two different forms of hydrogen fuel to replace natural gas, one produced through electrolyzer facilities that convert water and electricity into hydrogen, and another that reforms natural gas, yielding hydrogen and carbon waste that can be captured to reduce emissions. They also ran the numbers on retrofitting natural gas plants to burn hydrogen as opposed to building entirely new facilities. Their model includes identification of likely locations throughout the state and expenses involved in constructing these facilities.

    The researchers spent months compiling a giant dataset before setting out on the task of analysis. The results from their modeling were clear: “Hydrogen can be a more cost-effective alternative to lithium-ion batteries for peaking operations on a power grid,” says Hernandez. In addition, notes Gençer, “While certain technologies worked better in particular locations, we found that on average, reforming hydrogen rather than electrolytic hydrogen turned out to be the cheapest option for replacing peaker plants.”

    A tool for energy investors

    When he began this project, Gençer admits he “wasn’t hopeful” about hydrogen replacing natural gas in peaker plants. “It was kind of shocking to see in our different scenarios that there was a place for hydrogen.” That’s because the overall price tag for converting a fossil-fuel based plant to one based on hydrogen is very high, and such conversions likely won’t take place until more sectors of the economy embrace hydrogen, whether as a fuel for transportation or for varied manufacturing and industrial purposes.

    A nascent hydrogen production infrastructure does exist, mainly in the production of ammonia for fertilizer. But enormous investments will be necessary to expand this framework to meet grid-scale needs, driven by purposeful incentives. “With any of the climate solutions proposed today, we will need a carbon tax or carbon pricing; otherwise nobody will switch to new technologies,” says Gençer.

    The researchers believe studies like theirs could help key energy stakeholders make better-informed decisions. To that end, they have integrated their analysis into SESAME, a life cycle and techno-economic assessment tool for a range of energy systems that was developed by MIT researchers. Users can leverage this sophisticated modeling environment to compare costs of energy storage and emissions from different technologies, for instance, or to determine whether it is cost-efficient to replace a natural gas-powered plant with one powered by hydrogen.

    “As utilities, industry, and investors look to decarbonize and achieve zero-emissions targets, they have to weigh the costs of investing in low-carbon technologies today against the potential impacts of climate change moving forward,” says Hernandez, who is currently a senior associate in the energy practice at Charles River Associates. Hydrogen, he believes, will become increasingly cost-competitive as its production costs decline and markets expand.

    A study group member of MITEI’s soon-to-be published Future of Storage study, Gençer knows that hydrogen alone will not usher in a zero-carbon future. But, he says, “Our research shows we need to seriously consider hydrogen in the energy transition, start thinking about key areas where hydrogen should be used, and start making the massive investments necessary.”

    Funding for this research was provided by MITEI’s Low-Carbon Energy Centers and Future of Storage study. More