Executive Summary
The 2024 Annual Decarbonization Perspective (ADP 2024) produces evidence-based strategies for the United States to achieve net-zero emissions by 2050. Using our state-of-the-art modeling tools—RIO and EnergyPATHWAYS—we capture the dynamics between and among energy sectors to evaluate infrastructure, technology, land use, and cost requirements of different pathways to net zero. We create Scenarios that highlight key decision points, tradeoffs, and opportunities on the road ahead. The third of our annual series, ADP 2024 produces actionable data that we organize to produce industry-leading guidance for policymakers, investors, researchers, and stakeholders to implement a transition to net zero while maintaining the economic productivity and energy security of the U.S.
A global transition to low-carbon energy requires affordable and scalable technologies to protect the climate while improving economic opportunities, standards of living, access to healthcare, and other essentials of modern life. Technology cost breakthroughs in the U.S. reduce the burden on policy alone to drive this transition, which lowers the overall cost of decarbonization and makes the transition more affordable globally, accelerating progress toward net zero. The more options that exist, the more resilient decarbonization pathways become; a diverse set of technology solutions can better adapt to regional differences, societal preferences, and policy environments.
This year, ADP 2024 features an in-depth focus on three specific aspects of the emerging technology landscape: 1) Data Centers; 2) Game-Changing Technologies like Next-Gen Geothermal, Geologic Hydrogen, and Limestone and Calcinated Clay Cement (LC3); and 3) an assessment of the necessary Cost Breakthroughs to scale a suite competing low-carbon technology options.
Data Centers
The rapid expansion of data centers, driven by advances in artificial intelligence (AI) and the computational requirements of large language models, is creating a major new source of electricity demand in the United States.
ADP 2024 models data center demand under Baseline and High-Growth Scenarios that range between 975 TWh and 1,680 TWh in 2050, up from 279 TWh today. Even given the rapid electricity demand growth expected from the electrification of transportation and other sectors in a net zero transition, data centers would outpace that growth to consume a share of between 9.3% and 14.9% of total U.S. electricity by 2050.
Game-Changing Technologies
The ADP is a unique analytical venue for assessing the impacts of new technology development across the energy economy. This year we integrated three such technologies into our analysis to assess the role that they may play in a decarbonized future: Next-Gen Geothermal, Geologic (Gold) Hydrogen, and LC3.
Next-Gen Geothermal
Recent advances in oil and gas technology—specifically horizontal drilling, hydraulic fracturing, and high-pressure fluid pumping—are unexpectedly unlocking new potential in clean energy. For geothermal energy, these methods reduce the cost of drilling wells and producing high-temperature steam, making geothermal energy economically viable beyond a few locations in the western U.S. Next-generation geothermal technology has transformed geothermal from a geographically limited resource to one that can provide economically competitive supplies of thermal energy across much of the U.S.
In addition to the appearance of new geothermal power at significant levels (tens of gigawatts) for the first time, another notable application for geothermal that is highlighted in ADP 2024 is steam for industry. Unlike electricity generation, which requires higher temperatures, many industrial applications use steam at temperatures of 150 C or below.
The new geothermal technology can provide steam at this temperature in many parts of the U.S. ADP 2024 estimates geothermal’s levelized cost of heat (LCOH) for very large steam applications to be around $7/MMBtu by 2035, nearly on par with new natural gas boilers. This positions geothermal as a crucial alternative to fossil fuels for decarbonizing industrial processes. ADP 2024 also finds that the new geothermal can increase the competitiveness of direct air capture by providing low-cost heat for the recharge of solid sorbents.
Geologic Hydrogen
Another potentially significant source of clean energy based on oil and gas technology is geologic (gold) hydrogen. Geologic hydrogen is generated through natural processes involving water and iron-rich minerals, and may prove to be scalable, widely abundant, and low cost. ADP 2024 is the first study that showcases the economy-wide impacts of a breakthrough in geologic hydrogen on the energy transition.
ADP modeling indicates that if geologic hydrogen hits a $1/kg target, it would result in greater hydrogen use in electric power and industry, and significantly increase synthetic fuel production. In turn, demand for biomass, wind, and solar would decrease in net-zero Scenarios, saving land and through the production of synthetic fuels, and reducing the need for geologic carbon sequestration.
Lime and Calcined Clay Cement
While alternative cement formulations have been proposed for years, the lime and calcined clay cement (LC3) formulation developed by researchers in Switzerland, and now being adopted at increasing scale in many developing countries, has the great virtue of using low-cost common minerals to replace a large fraction of the ordinary Portland cement that is the main component of conventional cement, and the source of most of the process emissions.
Use of LC3 eliminates a large share of CO2 emissions from cement while reducing the cost of production. ADP 2024 explores the requirements of a switch to LC3, in combination with LEILAC direct separation CCS technology, to produce net-zero cement in the U.S. The results show that while the technology is still nascent, the assumption that cement decarbonization may prove intractable is out of touch with recent technology advances.
Cost Breakthroughs
ADP 2024 introduces a pioneering approach to setting cost targets for clean technologies (e.g., advanced nuclear, next-generation geothermal) by calculating 1) what each technology would need to cost in order to replace another key clean technology that does not materialize, and 2) to do so at large scale without increasing the overall cost of the energy transition. Instead of us telling the model what something should cost, the model tells us.
Six technologies were analyzed in ADP 2024 as a proof of concept – nuclear, geothermal, gas with carbon capture, offshore wind, solar, and direct air capture. Any of them could be essential if emerging challenges constrain the buildout of others, for example onshore wind at the scale currently envisioned in net-zero Scenarios. Establishing cost benchmarks for these technologies helps stakeholders understand what levels of investment and research are required to make each technology competitive and scalable.
The bars below provide a range of target costs by technology that depend on the level of policy support for net-zero emissions. The right side of the bars (i.e., top of the cost range) represents the necessary cost in the Central Scenario. The left side of the bars (i.e., bottom of the cost range) represents the necessary cost in the Current Policy Scenario, in which the policies needed to reach net-zero emissions are not in place.
Report Materials
Interactive Results
