Clean Power Plan choices by states will change electricity generation mix

Demand-side energy efficiency plays a major role in holding down growth in electricity demand

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Source: U.S. Energy Information Administration, Annual Energy Outlook 2016

When designing the Clean Power Plan, the Environmental Protection Agency provided states with generation fuel and technology options to meet their emissions targets, according to the US Energy Information Administration.

Given the options available to states, EIA has produced several scenarios as part of an Issues in Focus analysis in the Annual Energy Outlook 2016 (AEO2016).

Differences in emissions target types, emissions trading markets, and policy timelines have implications for electric capacity and generation in the US.

The CPP scenarios tend to result in more electricity generation from renewables—especially solar and wind—and (in most cases) natural gas over the next 25 years compared with projections without the CPP.

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In all cases, coal generation declines, and generation from other fuels such as nuclear or hydroelectricity are relatively unchanged.

Power-sector carbon dioxide emissions are lower and retail electricity prices are higher compared with a case without the CPP.

In the AEO2016 Reference case, states comply with mass-based standards during the CPP compliance period from 2022 through 2030, and maintain the 2030 standard through 2040.
Mass-based standards limit the absolute levels of carbon dioxide (CO2) collectively emitted from a state’s electricity generators.
In the mass-based Reference case scenario, a state’s total emissions are essentially constrained, as fossil-fueled generators compete among each other for emissions allowances.
states
Source: U.S. Energy Information Administration, Annual Energy Outlook 2016

Previous Today in Energy articles have examined the Reference case assumptions on regional electricity generation, coal production, and CO2 emissions.

Although demand-side energy efficiency plays a major role in holding down growth in electricity demand in all AEO2016 cases, incremental efficiency plays a relatively minor role in CPP compliance in all cases.

Incremental efficiency reduces 2030 electricity demand by about 67 billion kilowatthours (kWh) to 76 billion kWh, or about 1.5 per cent to 1.7 per cent of total electricity demand, compared with a scenario without the Clean Power Plan.

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