Study Region

This report covers three countries in North America, including Canada, the United

States (abbreviated as the U.S.) and Mexico¹.

Study Region for North American Energy Interconnection

1 This report does not hold any position on the sovereign status of territories, the delimitations of international

borders or the names of territories, cities or other areas.

I

Contents

Study Region................................................................................................................. I

Contents ........................................................................................................................ I

1 Basic Situation of Development in North Americ a ................................................1

2 Challenges and Ideas of Sustainable Development................................................7

3 Energy and Power Development Trends ..............................................................10

4 Development Layout of Clean Energy Resources................................................15

5 Power Grid Interconnection ..................................................................................21

6 Comprehensive Benefits .........................................................................................31

7 Development Outlook of Achieving 1.5°C Temperature Control Target..........34

I

Research and Outlook on North American Energy Interconnection

1 Basic Situation of Development in North

America

1.1 Economy and Society

North America has a high level of economic development, with slowly growing

population and leading position in scientific and technological innovation. In 2017,

the GDP of North America totaled 22.3 trillion USD, accounting for about 1/3 of the

world’s total, with a GDP per capita of 45 thousand USD. Both rank first in the world.

The population of North America in 2017 was around 490 million, accounting for 6.5%

of the world’s population. According to the United Nations (UN) forecast¹, population

growth in North America will be relatively slow in the future, with an estimated

population of 600 million in 2050. North America is a global innovation center. The

2018 Global Innovation Index (GII)²report ranked the innovation performance of

nearly 130 economies around the world, with North America scoring 56 and leading

the world.

North America enjoys close regional cooperation and a high level of free trade.

The three countries in North America are geographically linked and have close

geopolitical relations. In December 1992, the North American Free Trade Agreement

(NAFTA) was signed, which promoted the economic and trade exchange among the

three countries. North American economic integration has developed rapidly since then.

In September 2018, the U.S.−Mexico−Canada Agreement (USMCA) on free trade was

signed, which comprehensively revised and upgraded NAFTA and strengthened

regional cooperation. It will continue to promote and safeguard the development of

regional economic integration in North America.

North American countries are speeding up infrastructure development to

boost their economic development. Aging infrastructure has seriously affected the

1 Source: Department of Economic and Social Affairs, the United Nations, 2019.

2 The 2018 Global Innovation Index, jointly released by Cornell University, the INSEAD business school and the

World Intellectual Property Organization, a specialized agency of the United Nations, is in its 11th edition. The index

has been released annually since 2007 and has now become the primary benchmark tool used by business executives,

policy makers and other innovative people worldwide.

1

Research and Outlook on North American Energy Interconnection

economic development of North America. Upgrading and rebuilding infrastructure has

been included in the infrastructure plan of North American countries. The United

States announced a trillion-dollar infrastructure plan in June 2017 and issued the

Legislative Outline for Rebuilding Infrastructure in America in February, 2018,

increasing infrastructure investment funds to 1.5 trillion USD. Canada adopted the

“Invest in Canada” program in 2016 and plans to provide 135 billion USD in public

transportation, green infrastructure, social infrastructure, trade and transportation

infrastructure within 12 years ¹. Mexico’s president, Mr.Obrador, pushed for the

construction of projects such as the Tren Maya and the Interoceanic Highway.

1.2 Resources and Environment

Fossil energy resources are rich. North America is rich in coal resources, with

proven reserves of about 258 billion tonnes, accounting for 24.4% of the world’s

reserves. Its reserve-production ratio is about 342 years ², with more than 95%

concentrated in the United States. The continent’s oil resources are abundant, with

proven reserves of about 35.5 billion tonnes, ranking third after the Middle East and

Central and South America, accounting for 14.1% of the world’s reserves, with more

than 76% concentrated in Canada. Conventional natural gas resources are relatively

small, with proven reserves of approximately 14 trillion m³, accounting for only 7% of

the world’s reserves, with 85% concentrated in the United States. Unconventional oil

and natural gas resources such as shale oil and shale gas in North America are abundant

and primarily distributed in the United States.

Clean energy resources are abundant. The theoretical reserves of hydropower

resources in North America are about 5.5 PWh/year, accounting for 14% of the world’s

total. The theoretical reserves of solar energy are about 15000 PWh/year, accounting

for 10% of the world’s total. The theoretical reserves of wind energy resources are about

430 PWh/year (including 50 PWh/year of offshore wind energy), accounting for 21%

1 Source: Guidelines for Foreign Investment Cooperation in the United States and Canada, 2018.

2 Source: BP, Statistical Review of World Energy, 2019.

2

Research and Outlook on North American Energy Interconnection

of the world’s total¹.

North America has a large total amount of carbon emissions and suffers

severe losses due to climate disasters. Carbon dioxide (CO₂) emissions from fossil

fuel combustion in North America peaked around 2007. In 2016, CO₂emissions

amounted to 5.8 billion tonnes, accounting for 18% of the world’s total. The CO₂

emissions from fossil fuel combustion in North America mainly comes from oil. The

emissions are mainly produced from the power, heating and transportation sectors. In

2016, the proportions of CO₂emissions from burning coal, oil and natural gas were

26%, 43% and 31%, respectively, and the CO₂emissions from fossil energy in the

power, heating and transportation sectors accounted for 72.8% of the total. Affected by

climate change, North American countries have suffered serious economic losses. From

2016 to 2018, the economic losses from climate-related disasters in North America

totaled approximately 415 billion USD, making up about 63% of that of the world².

1.3 Energy and Power

Energy production is dominated by fossil fuels. From 2000 to 2016, energy

production in North America increased from 3.13 billion tonnes of coal equivalent (tce)

to 3.54 billion tce, with an average annual growth rate of 0.8%³. Per capita energy

production in North America is 7.3 tce, which is 2.8 times the global average. In 2016,

fossil energy production in North America accounted for 78.3% of energy production.

Energy consumption increased and then decreased. The total primary energy

demand in North America maintained a small increase before 2014, with an average

annual growth rate of 0.1%, after which, it fell slightly to 4 billion tce in 2016⁴. From

2000 to 2016, the share of fossil energy demand in North America decreased from 82%

to 78%. The share of clean energy has continued to rise from 18% to 22%, equaling

the global average. Final energy consumption, primarily for oil and natural gas, also

1 Data Source: Liu Zhenya, Global Energy Interconnection. 2015.

2 Data source: Morgan Stanley, Investigation report, 2019.

3 Resource: International Energy Agency, World Energy Balance, 2017.

4 Primary energy equivalent calculation adopts the Partial Substitution method, same for the following. In this

method, the primary energy equivalent of renewable energy sources of electricity generation represents the amount

of energy that would be necessary to generate an identical amount of electricity in coal-fired power plants

3

Research and Outlook on North American Energy Interconnection

increased and then decreased. From 2000 to 2014, total final energy consumption in

North America increased from 2.62 billion tce to 2.64 billion tce, and then fell to 2.61

billion tce in 2016. The share of electricity continued to increase from 19.4% in

2000 to 21.4% in 2016, which was 2 percentage points higher than the global

average.

Figure 1-1 Primary Energy Demand Structure in North America in 2016

Figure 1-2 Final Energy Consumption Structure in North America in 2016

Electricity consumption has been stable, and annual electricity consumption

per capita has reached 3.2 times of the world average. In 2017, total power demand

in North America was 4.6 PWh, with a maximum load of about 810 GW¹. The annual

electricity consumption per capita was approximately 9479 kWh. Electricity

generation in North America relies mainly on fossil fuels. In 2017, the total installed

capacity in NorthAmerica was approximately 1320 GW², with an installed clean energy

capacity of about 450 GW, accounting for about 34.2%. The installed hydropower

capacity was about 200 GW, accounting for 15.1%. Nuclear power was 120 GW,

accounting for 8.8%, solar power was 27 GW, accounting for 2.0%, and wind power

1 Source: Energy Information Administration, North American Electric Reliability Council.

2 Source: Energy Information Administration, North American Electric Reliability Council.

4

Research and Outlook on North American Energy Interconnection

was 90 GW, accounting for 6.8%.

North America has an advanced power grid. At present, most parts of North

America are covered by strong 500 kV AC (400 kV AC in Mexico) power grids,

consisting of five AC synchronous grids, namely the Eastern Interconnection, the

Western Interconnection, the Texas Power Grid, the Quebec Power Grid and the Mexico

Power Grid. Among them, the Eastern and Western Interconnection span the United

States and Canada, covering the eastern part (excluding Quebec in Canada) and the

western part of the two countries, respectively. The highest voltage level in the Western

Interconnection is 500 kV, and most of the Eastern Interconnection has 500 kV as its

main grid. Only in the southern part of the Great Lakes region in the United States a

765 kV power grid has been built. Texas has built an independent 345 kV power grid,

which is asynchronously interconnected with the Eastern and Western Interconnections,

with an interconnection scale of 1.25 GW. The province of Quebec in Canada is

dominated by a 735 kV power grid. The 400 kV power grid in Mexico is around the

capital in the south central region.

Cross-border interconnection power grids have a good foundation. The United

States and Canada have built 25 circuits of 230 kV and above for interconnection lines¹,

with an annual electricity exchange of more than 60 TWh. The United States and

northern Mexico have built 11 circuits of 230 kV and above interconnection lines, with

mutual system backups².

Table 1-1 2017 Status of Synchronous Power Grids in North America

Area

Installed

Electricity Maximum

Highest

voltage level

(kV)

Synchronous

power grid

Coverage

(thousand capacity consumption

load

km²)

8370

(GW)

(TWh)

2971.7

(GW)

Eastern

Eastern United States and

826.18

524.27

765

Interconnection Central and Eastern Canada

Western United States,

British Columbia and

Western

4660

520

255.82

101.34

844.5

360.2

146.73

62.04

500

345

Interconnection Alberta in Canada, Baja

California (Part) of Mexico

Texas Power Grid Texas, United States

1 Data Source: Canadian Electricity Association, The North American Grid: Powering Cooperation on Clean

Energy & the Environment, 2016.

2 Data Source: Mexico Secretary of Energy.

5

Research and Outlook on North American Energy Interconnection

Area

Installed

Electricity Maximum

Highest

voltage level

(kV)

Synchronous

power grid

Coverage

(thousand capacity consumption

load

km²)

1540

(GW)

56.67

(TWh)

205.6

(GW)

Quebec Power

Grid

Quebec, Canada

35.74

735

Mexico (except certain parts

of Baja California in northern

Mexico)

Mexico Power

Grid

1970

75.68

265

42.24

400

Total

17060

1315.69

4647

811.02

—

6

Research and Outlook on North American Energy Interconnection

2 Challenges and Ideas of Sustainable

Development

2.1 Development Challenges

Unbalanced development within the continent hinders the development of

economic integration. Countries in North America have significantly different

development levels. Canada and Mexico lag far behind the United States in terms of

total GDP and GDP per capita. Aging infrastructure restricts the development of

interconnections. North America has taken the lead in accomplishing industrialization

and urbanization. The driving force for economic development is insufficient, leading

to lagged infrastructure development. There are large carbon emissions and a lack

of consensus on emissions reduction. Fossil fuel combustion produced CO₂in North

America were about three times that of the global average. The United States announced

its withdrawal from the Paris Agreement. The carbon regulations set by the Canadian

Federal Government are difficult to implement. And there is no sufficient financial

investment in clean energy development in Mexico. The ability to optimize the

allocation of large-scale resources of power grid needs to be improved. The power

supply and demand in North America is locally balanced. Congestion in the

transmission lines has become increasingly serious in recent years. The potential to

mitigate congestion problems by expanding the scope of grid interconnections and

enhancing grid resource allocation capabilities has not been fully explored. The peak

capacity benefits brought about by the large-scale interconnection of the power grid

have not yet been fully utilized. Large-scale integration of clean energy to the grid

requires higher ability for resources allocation of the power grid. It is necessary to

change the local energy balance pattern of the power grid into energy balance of larger

scale and larger range.

2.2 Development Ideas

The key of achieving sustainable development in North America is to speed

7

Research and Outlook on North American Energy Interconnection

up the development of clean energy, strengthen energy infrastructure connectivity

and build North American Energy Interconnection, so as to create a platform for

large-scale development, wide-range transmission and efficient utilization of clean

energy to ensure a secure, adequate, economic and efficient energy supply, and to

accelerate green and low-carbon development. North American Energy

Interconnection is an important part of Global Energy Interconnection (GEI). The

overall idea of its development is to speed up the development of abundant hydro

energy, solar energy and wind energy resources in North America, ensure a sustainable

energy supply through clean development and achieve energy security; to accelerate

Electricity Replacement, improve total factor production through the development of

electrification and enhance the quality of energy consumption; to achieve regional

synergy and complementarity through networking and interconnections, enhance the

driving force of economic development and provide strong guarantees for the

sustainable development of North America.

2.3 Development Priorities

The development of clean energy bases needs to be accelerated to achieve

diversified energy supply. It is essential that green and low-carbon development be

regarded as the fundamental direction of constructing North American Energy

Interconnection, therefore to accelerate the promotion of “Clean Replacement,” to

make full use of the advantages of clean energy resources in North America and to

develop large-scale clean energy bases.

The development of Electricity Replacement should be deepened to improve

energy utilization efficiency. It is necessary to accelerate the development of clean

power sources of non-fossil fuel energy in North America, and it is necessary to

significantly increase the proportion of electricity in final energy consumption through

the extensive replacement of electricity for final fossil fuel energy sources such as coal

and oil. It is also necessary to improve energy utilization efficiency to comprehensively

improve electrification in North American production and living, to build a clean, low-

carbon, safe and efficient energy system in North America.

It is necessary to strengthen cross-border and inter-continental

interconnections and to build North American Energy Interconnection. Taking into

account the differences in energy resources, social development, political and economic

8

Research and Outlook on North American Energy Interconnection

environments among North American countries, it is necessary to strengthen energy

and power interconnections and to realize the transition of energy allocation from local

balances to transnational large-scale allocation. The existing power grid pattern also

needs to be improved to alleviate the problem of power grid congestion. Through the

interconnection of power grids, benefits will be fully captured and the development and

transmission costs of clean energy will be reduced. It is necessary to drive infrastructure

interconnection in the region through the construction of a power grid interconnection,

to promote intra-regional trade and to realize the integrated and coordinated

development of North America.

9

Research and Outlook on North American Energy Interconnection

3 Energy and Power Development Trends

3.1 Energy Demand

Primary energy demand will first increase and then decrease. Primary energy

demand of North America will slightly increase from 3.99 to 4.06 billion tonnes of coal

equivalent (tce) from 2016 to 2025. Afterwards, primary energy demand will decrease

with its rate gradually accelerating. In 2050, primary energy demand will decrease to

3.43 billion tce, with -0.4% average annual growth rate from 2016 to 2050. Per capita

energy demand will decrease steadily. From 2016 to 2050, the per capita energy

demand of North America will steadily decrease from 8.2 to 5.7 tce per capita, a

decrease of 30%.

Figure 3-1 Forecast of Primary Energy Demand by Fuel in North America

Coal and oil demand will decrease gradually, and natural gas will reach a

peak in 2025. As a result, the energy structure will transfer from fossil energy

dominated to clean energy dominated. From 2016 to 2050, coal and oil demand will

decrease 70% and 75%. The demand for natural gas will reach a peak at 2025 and then

decrease rapidly till 2050 with a drop of 43% compared to 2016. From 2016 to 2050,

clean energy in North America will increase by 2.6 folds, reaching 2.26 billion tce. Its

share in primary energy will increase from 24% in 2016 to 70%¹in 2050. Around 2040,

clean energy will be the main energy in North America.

1 When calculating the share of clean energy in total primary energy, the fossil fuels that were used for non-energy

uses were not counted. The same for the followings.

10

Research and Outlook on North American Energy Interconnection

Final energy consumption in North America will first increase and then

decrease. The share of electricity in final energy consumption will continuously

increase, and electric power will become the highest share in final energy

consumption at around 2035. From 2016 to 2025, final energy consumption will

increase from 2.61 to 2.74 billion tce, an annual growth of 0.5%. From 2026 to 2050,

consumption will decrease with an annual drop of 1.1%, and in 2050 this consumption

will decrease to 2.08 billion tce. From 2016 to 2050, the annual drop will be 0.7%. In

2050, the share of fossil energy in final energy consumption will decrease to 17%.

During the same period, the share of power generation energy in primary energy is

expected to increase from 42% to 68%, higher than the global average of 66%; the share

of electricity in final energy consumption is expected to increase from 24% to 59%¹,

higher than the global average of 54%.

Figure 3-2 Final Energy Consumption by Fuel and Share of Electricity in North

America

3.2 Power Demand

The demand for electric power in North America will continue to grow

steadily. The main growth points of power demand include the return of the U.S.

manufacturing industry, Electricity Replacement in the transport sector (such as

for EVs), the construction of large-scale data centers and the popularization and

1 When calculating the share of electric power in total final energy consumption, the fossil fuels that were used for

non-energy uses were not counted. The same is true in the following analyses.

11

Research and Outlook on North American Energy Interconnection

application of intelligent equipment, as well as industrialization in Mexico. By

2035 and 2050, the additional power demand of the U.S. manufacturing industry is

expected to reach 800 TWh and 1100 TWh, respectively. The power demand of the

transportation sector in North America is expected to reach 380–530 TWh by 2035, and

990–1100 TWh by 2050. It is expected that the power demand of new data centers in

the United States will reach 220 TWh by 2035 and 360 TWh by 2050. Mexico’s actual

power demand is expected to grow by more than 4% from 2017 to 2035.

Total power demand in North America has grown steadily, and its power

consumption per capita has continued to rise. In 2035, the total electricity

consumption in North America will increase to 7.2 PWh, with an average annual growth

rate of 2.4% from 2017 to 2035. The maximum load will be 1.28 TW, with the average

annual growth rate from 2017 to 2035 of 2.4%. The annual electricity consumption per

capita may reach 12812 kWh. In 2050, electricity consumption in North America will

reach 8.9 PWh, and the average annual growth rate will be 1.5% from 2036 to 2050.

The maximum load will be 1.59 TW, with the average annual growth rate of 1.4% from

2036 to 2050. The annual electricity consumption per capita may reach 14869 kWh.

Figure 3-3 Power Demand Forecast in North America

3.3 Power Supply

Clean energy resources in North America are abundant and widely distributed. The

complementary benefits of multiple energy sources across time zones and seasons are

significant. As the cost of clean energy power generation continues to decrease, the

economies of scale of clean energy development will become more prominent,

12

Research and Outlook on North American Energy Interconnection

leading to diversified development in the power supply. These will effectively

promote the clean transition of the power supply in North America.

Clean energy generation costs are gradually falling below fossil fuel costs. In

2017, the Levelized Cost of Electricity (LCOE) of onshore wind power and PV

generation in North America was already lower than that of coal. It is estimated that the

LCOE of offshore wind power in North America will be lower than that of coal power

in 2035, reaching 6.6 US cents/kWh. The LCOE of onshore wind power and centralized

PV will be lower than that of natural gas, reaching 3.3 and 2.2 US cents/kWh,

respectively. It is estimated that the LCOE of clean energy in North America will

continue to decline in 2050. The LCOE of onshore wind power and centralized PV will

be less than 3 US cents/kWh.

Figure 3-4 Estimated LCOE of Various Power Sources in North America

Clean energy sources show complementary seasonal characteristics with each

other. Canada’s main power source is hydropower, which is characterized by higher

outputs in summer and lower outputs in winter and complementary with wind power in

the U.S.. When sending electricity from Canada to the United States to make use of the

differences in output characteristics, the power supply to the U.S. load centers will be

steadily guaranteed after combining with local U.S. wind power. The output

characteristics of solar energy and wind power in the central United States also show

complementary seasonal characteristics. Large-scale exploitation of clean energy bases

can achieve the combination of different clean energy sources and improve the

efficiency of transmission channels, therefore ensuring the stability of the power supply.

In 2035, the total installed capacity in North America will reach 2.48 TW, of which

13

Research and Outlook on North American Energy Interconnection

1.74 TW will be from clean energy installations. The proportion of clean energy will

increase from 34.2% in 2017 to 70.2%, becoming the dominant power source. The

installed capacity of solar power will reach 610 GW, accounting for 24.6%. The

installed capacity of wind power will reach 710 GW, accounting for 28.5%. The

installed capacity of hydropower will reach 250 GW, accounting for 10%. The installed

capacity of nuclear power will reach 160 GW, accounting for 6.3%. The total installed

capacity of energy from fossil fuels will be 740 GW, a significant drop from 65.8% in

2017 to 29.8%. In 2050, the total installed capacity in North America will reach 3.63

TW, of which 2.93 TW will be from clean energy installations, accounting for 80.7%.

The installed capacity of solar power will reach 1.3 TW, accounting for 35.9%. The

installed capacity of wind power will be 1.15 TW, accounting for 31.6%. The installed

capacity of hydropower will be 300 GW, accounting for 8.4%. The installed capacity

of nuclear power will be 150 GW, accounting for 4.3%. The total installed capacity

from fossil fuels will further drop to 700 GW, accounting for only 19.3%. In 2035,

North America’s clean power generation will reach 4.7 PWh, showing an increased

share from 40% in 2017 to 64.2% of total generation. In 2050, North America’s clean

power generation will be about 6.8 PWh, accounting for 74.3% of the total generation.

Figure 3-5 Outlook for Power Generation Installed Capacity in North America

14

Research and Outlook on North American Energy Interconnection

4 Development Layout of Clean Energy

Resources

4.1 Distribution of Clean Energy Resources

Hydro energy. North America’s theoretical potential of hydro resources are about

5.5 PWh/year, and the technical potential installed capacity of hydro resources is about

430 GW. The overall exploited ratio of hydropower in North America is 43%. Hydro

energy is mainly distributed in the river originates from Lake Ontario of the Saint

Lawrence River and those rivers originate from the western Rocky Mountains including

the Yukon River, the Mackenzie River, the Columbia River, the Mississippi River, the

Colorado River and the Grand River.

Figure 4-1 Illustration of the Main Rivers in North America

Wind energy. The theoretical potential of onshore wind energy resources in North

America is about 380 PWh/year¹. The annual average wind speed is about 2–12 m/s at

an altitude of 100 meters above the ground². The areas with annual average wind speeds

1 Data Source: Liu Zhenya, Global Energy Interconnection. 2015.

2 Source: VORTEX

15

Research and Outlook on North American Energy Interconnection

of higher than 7 m/s through the year are mainly distributed in the central west of the

United States, and central, eastern and southwestern coasts of Canada. North America

has abundant offshore wind energy resources. Its theoretical potential is 50 PWh/year,

and its technical capacity installed capacity reaches 10 TW. Its offshore wind energy

resources are mainly distributed along the eastern and western coasts of the United

States.

Figure 4-2 Illustration of Annual Average Wind Speed Distribution in North America

Solar energy. North America has abundant solar resources. The global horizontal

irradiation (GHI) of the whole continent ranges from 800 to 2500 kWh/m²,¹and its

theoretical potential is about 15000 PWh/year. The areas in North America with GHI

of more than 2000 kWh/m²mainly include the southwestern United States and western

and central Mexico.

Figure 4-3 Illustration of Global Horizontal Irradiation Distribution in North America

1 Data source: SOLARGIS, GHI Solar Map of North America, 2014.

16

Research and Outlook on North American Energy Interconnection

4.2 Layout of Clean Energy Bases

Clean energy resources in North America are exploited in both centralized

and distributed modes. The distribution of clean energy resources in North America

is uneven, and enrichment areas have significant resource advantages. Taking solar

energy as an example, the feed-in tariff for centralized utilization of large-scale solar

bases in the southwest United States is about 2 US cents/kWh, and the transmission

cost to the east and west load centers is about 1–2 US cents/kWh. Therefore the

receiving-end electricity price is about 3–4 US cents/kWh, much lower than that for

local coal power at the east and west load centers about 10 US cents/kWh. Meanwhile,

in areas such as distribution networks and roof-tops, distributed generators can be built in

coordination with large-scale centralized development.

Based on the distribution, the development status of clean energy resources and

the current exploitation status, three hydropower bases, sixteen wind power bases

and twelve solar energy bases are projected to be built in North America. The

projected installed capacity in 2050 is about 120 GW, 320 GW and 210 GW,

respectively.

Figure 4-4 Illustration of Clean Energy Bases Projected in North America

17

Research and Outlook on North American Energy Interconnection

Hydropower bases. North America will focus on the development of Canadian

hydropower resources in the future. By 2050, a priority will be given to the construction

of three hydropower bases in western Canada, the western Hudson Bay and the

Labrador Plateau. Considering the regulation characteristics of hydropower and

requirements of outward transmission, local wind power can be combined with

hydropower and delivered together to the load centers of the United States. It is

projected that by 2035, the hydropower installed capacity will reach 97.7 GW. By 2050,

this capacity will reach about 120 GW.

Table 4-1 Projected Installed Capacity of Hydropower Bases in North America

Existing

Exploited 2035 installed 2050 installed

Name

Region

installed

Rivers

Ratio (%) Capacity (GW) Capacity (GW)

Capacity (GW)

British

Athabasca River,

13.8

0.9

5

30

West Canada

Columbia

Alberta

26.7

10

33.7

11

Saskatchewan River,

Fraser River, Peace River

Nelson River and

Churchill River

Hydropower Base

7

West Hudson Bay

Hydropower Base

Manitoba

35

Northern tributaries of

the Saint Lawrence River

and numerous rivers

flowing into James Bay

—

Labrador Plateau

Hydropower Base

Quebec

45

47

61

73

Total

64.7

—

97.7

117.7

Wind power bases. Based on North American wind resources and development

conditions, priority has been given to the development of sixteen large wind power

bases located in the central United States, east Canada, south Mexico, and the east and

west coasts of the United States. It is estimated that the installedcapacity of the large-

scale wind power bases will reach 150 GW and 320 GW in 2035 and 2050, respectively.

It is estimated that by 2035, North America’s annual wind power generation will

increase to 1.4 PWh and the overall exploitable ratio of North America’s wind resources

will reach 2.3%. By 2050, its annual wind power generation will reach 2.2 PWh, with

an exploited ratio of 3.5%. Priority has been given to the construction of large offshore

wind power bases along the coasts of Northern California and Oregon, eastern Maine

and New Jersey, with 45 GW and 100 GW to be installed by 2035 and 2050, respectively.

18

Research and Outlook on North American Energy Interconnection

Table 4-2 Projected Installed Capacity of Wind Power Bases in North America

Technical

2035 installed 2050 installed

Area

No.

Location

Region

potential installed

capacity

(GW)

18

(10000 km²)

capacity (GW)

(GW)

18

0

1

2

3

4

5

6

7

8

9

Martin

Arthur

South Dakota, the U.S.

Nebraska, the U.S.

Kansas, the U.S.

Oklahoma, the U.S.

Wyoming, the U.S.

Arizona, the U.S.

Texas, the U.S.

1.4

1.5

0.8

1

140

150

80

18

Garden City

Kenton

18

100

130

50

32

Lander

1.3

0.5

1.4

1.3

1.2

0.5

0.3

9

40

Flagstaff

Tahoka

4

8

140

130

120

50

0

18

Keyano

Quebec, Canada

10

8

17

Nitchequon

16

10 Manicouagan

8

16

11

12

Oregon offshore, the U.S.

Maine offshore, the U.S.

5

10

30

0

5

Massachusetts, Rhode

Island, Connecticut offshore, the U.S.

New York offshore, the U.S.

New Jersey offshore, the U.S.

13

0.5

50

10

30

14

15

16

0.5

0.3

—

50

30

15

30

25

Oaxaca

Oaxaca, Mexico

—

10

20

Total

13.7

1370

148

321

Solar power bases. Considering the resource characteristics, development

conditions and costs, twelve solar power bases have been prioritized in North America.

Nine of them are in the south-central and southwestern states of the United States, and

three are located in the central and northern regions of Mexico. The total installed

capacity is planned to reach about 110 GW in 2035 and about 210 GW in 2050.

Table 4-3 Projected Installed Capacity of Solar Power Bases in North America

Technical

2035 installed 2050 installed

Area

No.

Location

Region

potential installed

capacity

(GW)

22

(10000 km²)

capacity (GW)

(GW)

1

2

Midland

Buffalo

Texas, the U.S.

Oklahoma, the U.S.

Kansas, the U.S.

1.5

1

150

100

120

50

10

40

20

0

40

3

Syracuse

Clayton

1.2

0.5

1.3

0.5

0.8

0.7

0.6

40

4

New Mexico, the U.S.

Arizona, the U.S.

Utah, the U.S.

20

5

Roswell

5

8

6

Kayenta

130

50

0

16

7

Bluff

4

9

8

Helendale

Lucerne Valley

Apatzingan

California, the U.S.

Michoacan, Mexico

80

6

12

9

70

6

10

60

4

10

19

Research and Outlook on North American Energy Interconnection

Technical

2035 installed 2050 installed

Area

No.

Location

Region

potential installed

capacity

(GW)

12

(10000 km²)

capacity (GW)

(GW)

4

11

12

Rio Grande

Zacatecas, Mexico

Sonora, Mexico

0.8

0.9

11

80

90

Puerto Libertad

6

15

Total

1100

105

214

20

Research and Outlook on North American Energy Interconnection

5 Power Grid Interconnection

5.1 Power Flow

Each region in North America plays its own role either as a supplier or consumer

of power due to uneven power resource distribution and demands. Load centers can be

found in two coasts and the Great Lakes region of the U.S.. Clean energy power

bases are located in Canada, which has significant hydropower resources, and the

central U.S., where wind and solar power sources abound. Thanks to the abundant solar

power resources, Mexico is able to provide power for its industrial development,

complementary with the hydropower produced in the western U.S., and will become an

important hub connecting North America with Central & South America.

Figure 5-1 Illustration of Power Flow in North America by 2050

The overall pattern of power flow in North America can be summarized as power

transmission from “north to south, central to coasts, and complementary with

Central & South America through inter-continental power interconnections”. By

2035, there will be about 100 GW of cross-border and within the U.S. power flow,

including 29 GW cross-border power flow and 71 GW power flow within the U.S.. By

2050, the scale of power flow will continue to grow to about 200 GW of inter-

21

Research and Outlook on North American Energy Interconnection

continental, inter-regional and cross-border power transmission. Inter-continental

power flow will reach 10 GW. Cross-border power flow will reach 66 GW. And the

scale of power flow within the U.S. will reach 130 GW.

5.2 Power Grid Pattern

With the upgrade and interconnection of the grid, 3 synchronous power grids will

be formed in North America by 2050, including the Eastern Power Grid, the Western

Power Grid and the Quebec Power Grid.

Figure 5-2 Illustration of the Three Power Grids in North America¹

By 2035, the North American Energy Interconnection will take shape. UHV

outward transmission channels for clean energy will be built, and the existing grid will

be entirely upgraded. The highest voltage level of the Eastern and Western Power Grids

and the Mexican Power Grid will be raised to 1000 kV, and the DC voltage level of the

Quebec Power Grid will be raised to ±800 kV.

The Eastern North America Power Grid: strengthen the 765 kV grid in the

Great Lakes region, form a new 1000 backbone grid covering the Northeast and

Southeast, form a 500 kV AC main grid in Texas, and connect the several UHV DC

1 All sites of stations and paths of transmission lines from figures in this report are schematic displays which do

not strictly represent specific geographical locations.

22

Research and Outlook on North American Energy Interconnection

channels in clean energy bases in East and Central Canada and the Central U.S. to the

1000/765 kV main grid. The Western North America Power Grid: build a 1000 kV

AC channel along the West Coast that transmits the wind power and hydropower from

the north to the load centers in the South, and receives the hydropower from Western

Canada as well as solar and wind power from the central U.S. through UHV DC

channels. In Mexico: build a 1000 kV AC transmission channel to connect the solar

power bases and supply the capital and other major cities. Quebec Power Grid:

strengthen the 735/345 kV main grid and build ±800 kV UHV DC channels to connect

the Eastern Power Grid of the U.S., allowing united outward transmission of

hydropower and wind power.

By 2050, the North American Energy Interconnection will be completed built.

The vertical UHV AC/DC channels on both coasts, and horizontal clean energy

transmission channel in Central and Northern parts of North America will be built.

Vertical channel: East Channel, extend the UHV AC/DC channel from Quebec

in Canada to Florida in the U.S. along the East Coast, to bring together hydropower

from Canada, onshore and offshore wind power and clean energy from the Central U.S.

to load centers along the East Coast. A robust Eastern North America Power Grid will

be formed after bridging with the Texas grid through 500 kV AC channels. West

Channel, a UHV AC/DC hybrid transmission backbone channel will be constructed

along the West Coast, with the 1000 kV AC grid extended southward to synchronously

interconnect with Mexico, so as to form a platform that provides optimal allocation of

hydro, wind and solar power. Horizontal channel: South Channel, build an Eastward

transmission channel from Central U.S. to load centers in the Northeast, Southeast and

Texas, and build a westward transmission channel from Central U.S. to the load centers

in California. North Channel, gradually build horizontal interconnection channel that

crosses west, central Canada and Quebec, to achieve mutual support between wind and

hydro power. In long term, wind power from Arctic will be received. Inter-

continentally: build a UHV DC transmission channel of Mexico City, Mexico−Trujillo,

Peru.

23

Research and Outlook on North American Energy Interconnection

5.3 Regional Grid Interconnection

Eastern North America Power Grid: Upgrading the existing grid to a 1000/765

kV main grid, greatly improving the transmission capacity and power supply reliability

of the interconnection, receiving large volume of power from different regions to meet

the power demand of the load centers located in the East Coast, the Great Lakes

industrial area and the South.

Construction of main AC grid: The 765 kVAC looped grid in the Great Lakes

will be upgraded to double circuits, and further extended to the Northwest of

Minneapolis and other cities, and to Detroit and Cleveland to form a ring-shaped grid

in the north, which can ensure the power supply of major industrial cities around the

Great Lakes. A double-circuit 1000 kV AC power transmission corridor will be built

along the East Coast. Marcy in the north will receive Quebec’s clean energy and

transmit it to Newark, Philadelphia, Washington, Norfolk and other cities in the South.

This corridor will also extend inland, connect Harrisburg, Pittsburgh, etc., to form a

1000 kVAC looped grid in the Northeast and connect with the 765 kV grid at Pittsburgh.

In the Southeast, a 1000 kV AC backbone grid will be built with Atlanta as the core,

which extends to Little Rock and New Orleans in the west through two corridors,

respectively, connecting Jacksonville in the South through Augusta and interconnecting

with the 1000 kV AC network in the Northeast in Raleigh. A 500 kV AC grid will be

built in Texas to transmit electricity from the solar and wind power bases in West Texas

to the load centers, and synchronously interconnect with the southeastern part of the

eastern power grid.

Clean energy transmission corridor: Intra-regionally, ten ±800 kV DC

transmission lines will be constructed with a total transmission capacity of 80 GW to

transmit clean energy from large wind and solar power bases in the Central U.S.. Four

DC lines start at the Martin wind power base, Arthur wind power base and Syracuse

solar power base, and end in Chicago, Indianapolis, Charleston and Louisville,

respectively. Excess electricity will then be sent to surrounding cities along the 765 kV

AC grid. Three DC lines start from the Garden City wind power base and Buffalo solar

24

Research and Outlook on North American Energy Interconnection

power base, transmit electricity to Charlotte, Memphis and Jackson in the Southeast,

respectively, and supply the cities along the line through the 1000 kV AC corridor.

Three DC lines transmit electricity from the Kenton wind power base and the Clayton

solar power base to Dallas, San Antonio and Houston, respectively. Excess electricity

will then be sent to other major cities with the 500 kV AC grid in Texas. Inter-

regionally, two DC lines transmit electricity from the Lander wind power base and

Kayenta solar power base in the west to Morgantown and Atlanta in the east with the

total transmission capacity of 16 GW, to achieve asynchronous interconnection between

the Eastern and Western Power Grids.

Cross-border Interconnection: four ±800 kV DC corridors will be built from

Nitchequon, Canada to Philadelphia, U.S., from Thompson, Canada to Minneapolis,

U.S., from Keyano, Canada to Pittsburgh, U.S. and from Manicouagan, Canada to

Newark, U.S. to transmit 32 GW of wind and hydropower from Canada to the cities

along the line through the 1000 kV AC transmission corridor and the 765 kV grid on

the East Coast, respectively.

Figure 5-3 Illustration of Eastern North America Power Grid by 2050

25

Research and Outlook on North American Energy Interconnection

Western North America Power Grid: Constructing a 1000 kVAC main grid and

transmission corridors for clean energy power bases, so as to greatly improve the power

supply capacity and reliability of the grid, and bring clean energy to the load centers in

California, the U.S. and Mexico. Through AC/DC hybrid corridor, a platform for

resource optimization on a large scale will be built and allow cross-border and inter-

continental complementation and mutual support of various energy.

Construction of the main AC grid: The United States: a double-circuit 1000

kV transmission corridor will be built along the West Coast in the U.S., which gathers

wind power and hydropower from Washington, Montana, Oregon and Idaho in the north

and transmits the electricity southward to the load centers in the Bay Area. A triangular

1000 kVAC looped grid around the Bay Area will be built to enhance the power supply

capacity of the grid. The 500 kV grid will be upgraded to gather Oregon's onshore and

offshore wind power and transmit it southward to San Francisco with a transmission

capacity of 4 GW. Mexico: a 1000 kV AC grid will be built to connect the three major

load centers in Mexico City, Guadalajara and Monterrey with solar power bases in Rio

Grande, Apatzingan and Libertad to enhance the transmission capacity of the power

grid. Recipient grid in Mexico City will be expanded to form a 1000 kVAC looped grid

to enhance the power supply capacity of the grid.

Clean energy transmission corridor: a ±800 kV DC transmission line will be

built to transmit electricity from Lander wind power base to Las Vegas with the

transmission capacity of 8 GW. A1000 kVAC transmission corridor will be constructed

at Bluff solar power base to transmit 8 GW through Bluff−Phoenix−San Diego line.

Cross-border and inter-continental Interconnection: Cross-border: two ±800

kV DC lines will be built from Terrace, Canada to San Francisco, the U.S., and from

Calgary, Canada to Livermore, the U.S. to transmit electricity from Canada’s

hydropower and wind power bases to the load centers in the Bay Area with a

transmission capacity of 16 GW. Mexico’s 1000 kV main grid will interconnect with

the 1000 kVAC grid in the Western U.S. at San Diego and Phoenix to form two double-

circuit 1000 kV cross-border interconnection corridors to realize the mutual support

between hydropower and wind power of the U.S. and Canada and solar power of

26

Research and Outlook on North American Energy Interconnection

Mexico, with a maximum transmission capacity of 12 GW. Inter-continental

construction of the ±800 kV UHVDC line from Mexico City, Mexico to Trujillo, Peru

will realize the cross-seasonal mutual support between solar power of Mexico and

hydropower of South America, with a transmission capacity of 8 GW. North America

exchanges 2 GW of electricity with Central U.S. through a 400 kV grid.

Figure 5-4 Illustration of Western North America Power Grid by 2050

Quebec Power Grid: improving the 735/345 kV grid, enhancing power supply

capacity and reliability of the grid, vigorously developing clean energy bases, and

building cross-border transmission corridors, so as to realize large-scale transmission

of hydropower and wind power.

Construction of the AC main grid: 735 kV transmission lines in the South and

East will be completely upgraded to double circuits, so as to enhance the transmission

capacity of hydropower. The Nitchequon wind power base, Keyano wind power base

27

Research and Outlook on North American Energy Interconnection

and Manicouagan hydropower & wind power base will be developed to interconnect

with the surrounding hydropower bases through 735 kV AC lines and gather clean

energy and electricity in the north.

Clean energy cross-border transmission corridor: three ±800 kV cross-border

UHVDC transmission lines from Nitchequon, Canada to Philadelphia, the U.S., from

Keyano, Canada to Pittsburgh, the U.S. and from Manicouagan, Canada to Newark,

U.S. will be constructed to realize the joint transmission of hydropower and wind power,

with a total transmission capacity of 24 GW. At the receiving end, power will be

distributed through 765 kV and 1000 kV grids.

Figure 5-5 Illustration of Quebec Power Grid by 2050

5.4 Key Interconnection Projects

Inter-continentally, Mexico City, Mexico–Trujillo, Peru ±800 kV DC Project

will be builtwith a transmission capacity of 8 GW and a length of about 5200 km.

According to preliminary estimates, the total investment of this project will be 11.5

billion USD, and the electricity tariff will be about 3.21 US cents/kWh.

Cross-border: DC Projects for Southward Transmission of Canadian Clean

Energy to the U.S., including six ±800 kV UHVDC transmission lines with 48 GW of

transmission capacity. The U.S.−Mexico 1000 kV AC Interconnection Project also will

28

Research and Outlook on North American Energy Interconnection

be built.

Table 5-1 List of Key Cross-border Interconnection Projects

Total

Transmission

price (US

cents/kWh)

Voltage Capacity

Route length

(km)

No.

Project Name

investment

(billion USD)

(kV)

±800

1000

(GW)

Nitchequon, Canada—

Philadelphia, the U.S.

Keyano, Canada–

Pittsburgh, the U.S.

Manicouagan, Canada–

Newark, the U.S.

Thompson, Canada–

Minneapolis, the U.S.

Terrace, Canada–San

Francisco, the U.S.

Calgary, Canada–

Livermore, the U.S.

The U.S.—Mexico 1000

kV AC Interconnection

1

2

3

4

5

6

7

8

1900

1800

1400

1500

2600

1950

420

6

1.65

1.59

1.32

1.38

1.86

1.53

—

5.8

4.8

5

8

6.8

5.6

0.5

8

—

Intra-regionally: The U.S. Eastern and Western Power Grids Interconnection

Project will be built, including three ±800 kV DC transmission lines with 24 GW of

transmission capacity. Power Transmission Projects that Transmits Clean Energy from

the Central U.S. to Western U.S. will be built, including ten ±800 kV DC transmission

lines with 80 GW of transmission capacity. AC Backbone Grids/Transmission Corridors

Project in Eastern and Western North America will be built, including five AC

Backbone Grids/Transmission Corridors Projects

Table 5-2 List of Key Intra-regional Projects

Route

length

(km)

Total

investment

(billion USD)

4.5

Transmission

price (US

cents/kWh)

1.22

Voltage Capacity

No.

Project Name

(kV)

(GW)

1

2

Lander−Las Vegas

Lander−Morgantown

Kayenta−Atlanta

±800

765

8

1100

2800

2700

1400

1600

2000

1600

2100

1010

1150

1200

900

7.2

7.1

4.9

5.2

6

1.97

1.94

1.36

1.43

1.65

1.43

1.73

1.24

1.31

1.34

1.19

1.21

—

3

4

8

Martin−Chicago

5

6

Arthur−Indianapolis

Syracuse I−Charleston

Syracuse II−Louisville

Garden City−Charlotte

Buffalo I−Memphis

Buffalo II−Jackson

Kenton I−Houston

Kenton II−Dallas

8

7

8

9

8

5.2

6.3

4.4

4.7

4.8

4.2

4.3

3.8

10

11

12

13

14

8

—

Clayton−San Antonio

1100

1780

765 kV AC Looped Grid Project in U.S.

1000 kV UHVAC Transmission Corridor

Project on the East Coast of the U.S.

1000 kV UHVAC Looped Grid Project in

Southeastern U.S.

15

16

17

18

1000

—

1165

1160

2344

2129

8.1

5.5

—

1000 kV UHVAC Transmission Corridor

Project on the West Coast of the U.S.

1000 kV UHVAC Transmission Corridor

Project in Central Mexico

10.8

11.4

29

Research and Outlook on North American Energy Interconnection

5.5 Investment Estimation

From 2019 to 2050, the total investment of North American Energy

Interconnection will be about 4.3 trillion USD, of which about 2.5 trillion USD will

be invested in power sources, accounting for 58%. The power grid investment is about

1.8 trillion USD, accounting for 42% of the total investment.

Figure 5-6 Investment Scale and Structure of North American Energy Interconnection

From 2019 to 2035, the investment of the North American Energy Interconnection

will be about 2.6 trillion USD. About 1.5 trillion USD will be invested in power sources,

accounting for 58%, of which investment for distributed power sources will be about

236 billion USD, accounting for 15% of power source investment. The power grid

investment is about 1.1 trillion USD, accounting for 42%, of which, about 276 billion

USD are for grids that are 400 kV and above, 823 billion USD are for grids that are 345

kV and below.

From 2036 to 2050, the investment of North American Energy Interconnection

will be about 1.7 trillion USD. About 1 trillion USD will be invested in power sources

accounting for 59%, of which distributed power investment will be about 100.2 billion

USD accounting for 10% of power source investment. The power grid investment is

about 703.2 billion USD, accounting for 41%, of which 400 kV and above, about 195

billion USD, and 345 kV and below, about 508 billion USD.

30

Research and Outlook on North American Energy Interconnection

6 Comprehensive Benefits

6.1 Economic Benefits

Promoting the exploitation of clean energy. A projected exploitation of hydro,

wind and solar resources in this region will not only change the structure of energy

consumption in North America, but also promote the formation of diversified clean

energy, ensuring clean, efficient and sustainable energy supply. Promoting industrial

upgrading. The transformation and upgrade of energy-related industries will be

promoted. The construction of North American Energy Interconnection will benefit the

development of emerging industries such as new energy, new materials, advanced

equipment, intelligent manufacturing, electric vehicles, new type of energy storage,

information and communications, etc.. Boosting economic growth by attracting

investment. From 2019 to 2050, total investment in North American Energy

Interconnection is expected to reach 4.3 trillion USD, contributing about 1.2% to the

economic growth of this region. More benefits from larger interconnections. By

expanding interconnections in North America, each interconnection is empowered to

utilize electricity from outside its original grid. By bridging the Eastern and Western

Power Grids, 16 GW of electricity can be saved through peak load shifting, significantly

reducing the need for more installed capacity and storage equipment.

6.2 Social Benefits

More employment opportunities. A total of 10 million jobs will be created along

with the construction of North American Energy Interconnection. Reducing energy

supply costs. In 2050, the average cost of power generation in North America will be

reduced by about 47% compared with the current level. Narrower wealth gap. North

American Energy Interconnection will contribute to economic growth by delivering

low-cost power to formerly underserved regions and people. It can provide impetus for

promoting regional economic development, alleviating poverty, and realizing balanced

regional development.

31

Research and Outlook on North American Energy Interconnection

6.3 Environmental Benefits

Reducing greenhouse gas (GHG) emissions. North American Energy

Interconnection can help to reduce CO₂emissions from the energy sector to about 3.3

GtCO₂/year by 2035, 42% less than that in the Business-as-Usual (BAU) scenario¹, and

further to about 1.1 GtCO₂/year in 2050, 82% lower than that in the BAU scenario.

Reducing Meteorological disasters. The construction of the North American Energy

Interconnection will reduce greenhouse gas emissions, effectively lower the probability

of extreme weather and disasters, and reduce the risk of meteorological disasters.

Advanced transmission and smart grid technologies can be utilized to improve the

capability and resilience of power infrastructures in facing of disasters, thus reducing

economic losses and mortalities caused by meteorology disasters. Reducing air

pollutant emissions. By 2035, the North American Energy Interconnection Scenario

can reduce 3.6 million tonnes of SO₂, 9 million tonnes of NO_xand 900 thousand tonnes

of PM2.5 per year compared with the BAU scenario. By 2050, the North American

Energy Interconnection Scenario can reduce 7.0 million tonnes of SO₂, 19 million

tonnes of NO_xand 1.7 million tonnes of PM2.5 per year compared with the BAU

scenario. Increasing the value of land resources. Compared with the BAU scenario,

the North American Energy Interconnection scenario will add 18 billion USD per year

to the land resources by 2035 and 30 billion USD per year by 2050.

6.4 Political Benefits

Enhancing political mutual trust. Through the construction of the North

American Energy Interconnection, the cooperation among countries in the energy sector

will be strengthened. Clean energy power generation will drive the energy transition

and economic development in North America. Through energy interconnection, the in-

depth cooperation among North American countries will be strengthened to bring the

North American countries closer together, build strong partnerships and enhance

political mutual trust in this region. Promoting the coordinated development. The

construction of North American Energy Interconnection allows regional countries to

1 The BAU scenario developed by the Austrian International Institute for Applied Systems Analysis (IIASA) is a

development path for economy, energy, power and emissions in a country continuing existing policies.

32

Research and Outlook on North American Energy Interconnection

support each other to develop. It can also address the unbalanced regional economic

development issues caused by uneven distribution of resources. With a strengthened

cooperation among North American countries in the energy sector, more cooperation in

related fields can be expected, which will be beneficial for the development and

common prosperity, and provide strong impetus for the economic development and

boost the coordinated development of North America.

33

Research and Outlook on North American Energy Interconnection

7 Development Outlook of Achieving 1.5°C

Temperature Control Target

7.1 Situations and Requirements

According to IPCC’s¹research, achieving the 1.5°C temperature control target is

of great significance for the global sustainable development and the well-being of all

countries. Compared to the 2°C temperature rise scenario, the 1.5°C scenario can reduce

the risks of the global climate system, and ensure safer natural and human systems.

Extreme weather, the proportion of affected biodiversity and people suffering from

water shortage will be reduced. Risks caused by climate change on the overall global

economic development will decline. The world is in an urgent need to implement

climate actions from all respects to achieve the 1.5°C temperature control target. North

American countries need to speed up emission reduction as well. On the basis of

building North American Energy Interconnection, North American countries should

strive to achieve net zero emissions by the year 2050, and achieve the 1.5°C temperature

control target through accelerating the process of clean replacement on the energy

supply side, enhancing Electricity Replacement on the energy consumption side, and

promoting the application of carbon sequestration and reduction technologies.

7.2 Implementation Paths

Accelerating Clean Replacement on the energy supply side. With the rapid

development of clean energy power generation technology and rapid economic growth,

North America has strengthened its policy of supporting the development of the clean

energy industry and established a mechanism that is more conducive to the scale-up,

intensive development, large-scale deployment and efficient use of clean energy. North

America needs to continue the development of wind and solar power, optimize

hydropower generation, improve the mutual support and power generation stability of

hydro, wind and solar power, develop geothermal and biomass resources, and

eventually use clean energy as the major source of the power supply. In 2050, North

1

Intergovernmental Panel on Climate Change (IPCC), Special report on 1.5°C temperature rise, 2018.

34

Research and Outlook on North American Energy Interconnection

America’s clean energy installed capacity will exceed 85%, and fossil fuel installed

capacity will play a role of flexible adjustment.

Enhancing Electricity Replacement on the energy consumption side. Policies

such as providing financial subsidies and tax reductions should be implemented. The

research and development of the related technologies should be further accelerated, so

as to support the development of electrification industry and stimulate the potential of

Electricity Replacement. Based on these approaches, the economic feasibility of

Electricity Replacement can be improved, the scale of electricity consumption can be

expanded, and the structure of final energy consumption can be modified.

The application of carbon sequestration and reduction technologies should be

promoted. Based on greater efforts to promote Clean Replacement on the energy

supply side and Electricity Replacement on the energy consumption side and to reduce

GHG emissions, more supportive policies are needed to promote research, development,

commercialization and large-scale application of carbon sequestration and carbon

reduction technologies, which will directly reduce GHG in the atmosphere.

7.3 Scenarios and Schemes

North America accelerates its process in Clean Replacement on the energy

supply side, and the fossil fuel demand will reach its peak ahead of schedule and

be followed by rapid decline. Meanwhile, deeper Electricity Replacement on the

consumption side and more efficient usage of electricity will eventually lead to a

dramatic decrease of final energy consumption, securing a remarkable increase in

the share of electricity in total final energy consumption.

Primary energy demand in 2035 and 2050 will reach 3.51 and 3.25 billion tce

respectively, with a moderate average annual decline rate of 0.2% from 2016 to 2025,

and an accelerating average annual decline rate of 0.5% from 2025 to 2050. The demand

for coal, oil and natural gas will peak before 2020, and then fall back rapidly. North

America will accelerate its process in Clean Replacement, lifting the share of clean

energy in primary energy to 57% in 2035 and 87% in 2050.

35

Research and Outlook on North American Energy Interconnection

Figure 7-1 Primary Energy in North America Demand Achieving 1.5°C Temperature

Control Target

Final energy consumption will decline from 2016 to 2050, with an average

annual decline rate of 1.1%, and will reach 2.31 and 1.78 billion tce in 2035 and 2050,

respectively. The final fossil energy consumption will record a sharp decline to 1.08

and 0.23 billion tce in 2035 and 2050, respectively. The in-depth Electricity

Replacement will accelerate in the end-use sectors. It is estimated that the share of

electricity in final energy consumption will reach 44% in 2035 and 75% in 2050. The

share of electric power in industry, transport and building sectors will reach 43%, 26%,

62% in 2035 and 65%, 62%, 78% in 2050.

Figure 7-2 Final Energy Consumption in North America Achieving 1.5°C Temperature

Control Target

Power Demand. The total electricity consumption in North America in 2035 will

reach 7.4 PWh, and the average annual growth rate will be 2.6% from 2017 to 2035.

The maximum load will be 1.28 TW, with the average annual growth rate of 2.6% from

2017 to 2035. In 2050, electricity consumption in North America will reach 9.9 PWh,

36

Research and Outlook on North American Energy Interconnection

and the average annual growth rate is 2.0% from 2036 to 2050. The maximum load will

be 1.73 TW, and the average annual growth rate will be 2.0% from 2036 to 2050. The

annual electricity consumption per capita in North America will increase to 13267 kWh

in 2035, 1.4 times that of 2017. In 2050, electricity consumption per capita of the whole

continent will increase to 16594 kWh, which is 1.7 times that of 2017.

Figure 7-3 Forecast of Electricity Consumption in North America to Achieve the 1.5°C

Temperature Control Target

The total installed capacity in North America will further increase, and the

proportion of clean energy installed capacity will increase significantly. In 2035,

the total installed capacity in North America will be 2.89 TW. Clean energy installed

capacity will be 2.26 TW, whose proportion will increase from 34.9% in 2017 to 78.3%.

Wind power installed capacity will be 1.02 TW, accounting for 35.4%; solar power

installed capacity will be 610 GW, accounting for 28.1%; hydropower installed capacity

will be 250 GW, accounting for 8.6%; nuclear power installed capacity will be 160 GW,

accounting for 5.5%. The total installed capacity of fossil fuels will be 630 GW, which

will be a significant drop from the 65.8% in 2017 to 21.7%. In 2050, North America's

total power supply installed capacity will reach 4.48 TW, 3.87 TW of which is clean

power installed capacity, accounting for 86.5%. Wind power installed capacity will be

1.77 TW, accounting for 39.7%; solar installed capacity will reach 1.6 TW, accounting

for 35.9%; hydropower installed capacity will be 300 GW, accounting for 6.8%; nuclear

power installed capacity will be 160 GW, accounting for 3.6 %. The total installed

capacity of fossil fuel has further dropped to 600 GW, accounting for only 13.5%. In

2035, total clean power generation will be 5.8 PWh. The proportion of the total

generation will rise from 40% in 2017 to 76.6%. In 2050, total clean power generation

37

Research and Outlook on North American Energy Interconnection

will be about 8.9 PWh, accounting for 87.5% of the total generation.

Figure 7-4 Outlook of Installed Capacity in North America to Achieve the 1.5°C

Temperature Control Target

Power Grid Interconnection. Transmission channels for large-scale clean energy

power bases in Mexico (solar power bases) and the Midwestern U.S. (wind and solar

power bases) will be further expanded and strengthened; Western and Eastern Power

Grids will be upgraded to receive clean energy on a large scale and in a reliable manner.

Meanwhile the inter-continental and cross-border Interconnections will be strengthened

and serve as a platform to allow different clean energy to complement each other to

achieve optimized resource allocation. As a result, the North American Energy

Interconnection will be able to supply the power demand of nearly 10 PWh and access

4.5 TW of installed capacity, carrying the power flow of about 250 GW.

Figure 7-5 Illustration of Power Flow in North America in 2050 to Achieve the 1.5°C

Temperature Rise Control Target

With a view to helping achieve the global temperature control target of

1.5°C, North America needs to actively respond to the challenge of high carbon

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Research and Outlook on North American Energy Interconnection

emission levels. North America should accelerate “Clean Replacement” in a wider

range, promote more in-depth “Electricity Replacement”, rationally apply carbon

capture and storage and negative emission technologies, further accelerate energy

transition, and construct a power system that’s driven by clean energy. Compared

with the 2°C scenario, the 1.5°C scenario’s fossil fuel consumption should reduce 51%

in primary energy by 2050; and clean energy installed capacity will increase by 32% in

2050; strengthens grid interconnection which will see a 50 GW increase in inter-

continental and cross-regional power transmissions; and increases investment, as the

investment in clean energy exploitation and grid construction will increase by 30% in

cumulative terms by 2050.

Figure 7-6 Analysis and Comparison of Energy and Power in North America under the

2°C and 1.5°C Scenarios

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