The proposed Clean Power Plan (CPP) will reduce projected power sector carbon dioxide (CO2)emissions by between 484 and 625 million metric tons in 2030, this according to a recent report by the U.S. Energy Information Administration (EIA). The projected power sector emissions level in 2030 ranges from 1,553 to 1,727 million metric tons, reflecting a 29 to 36 percent reduction relative to 2005 levels.
Carbon dioxide emissions in the power sector declined by 363 million metric tons between 2005 and 2013, mainly due to a reduction in coal-fired generation, as well as to the growing use of natural gas and renewables as replacements for other fuels. However, CO2 emissions are projected to change only modestly from 2013 to 2040 according the report. Emissions trajectories are projected to be somewhat lower in areas with cheaper natural gas, and somewhat higher in areas with high economic growth, which correlates with higher electricity demand.
As the CPP is implemented, a transition away from coal-fired generation and toward natural gas-fired generation is expected to become the predominant compliance strategy. Demand-side energy efficiencies will play only a moderate role in compliance, especially when compared to the early impact of natural gas and the eventual impact of renewables.
If new nuclear generation were treated in the same manner as new renewable generations in calculations, the CPP would also result in increased nuclear generation, according to the report
The CPP has a significant impact on projected retirements and additions of electric generation capacity. Projected retirements of coal plants increase to 90 GW under the effect of the CPP, and retirements of inefficient natural gas or oil units are also projected to rise. The CPP significantly increases projected renewable capacity. Under favorable natural gas conditions, the CPP also increases additions of natural gas capacity.
The report also foresees that expanded generation from renewables, rising natural gas prices, and static CPP targets will allow existing coal-fired plants to operate at higher utilization rates.
The CPP will increase natural gas usage significantly, but this effect will fade over times as renewables and efficiency programs increasingly become the dominant compliance strategies. While there are significant differences in projected natural gas prices, the CPP will not significantly move natural gas prices, except for an additional impact during the first 2 to 3 years after implementation of the CPP.
Heat rates for coal-fired generators are expected to improve modestly under the CPP, but will represent less than two percent improvement in all cases.
The report expects retail electricity prices to increase most in the early 2020s, this in response to compliance measures. Increased investment in new generating capacity, as well as increased use of natural gas for generation, will lead to electricity prices that are 3 – 7 percent higher on average from 2020-25 under the CPP.
Read the complete report here.
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