A new report outlines decisive action that the US can take to cut pollution and advance clean electricity in the power sector over the next two years. Under President Joe Biden, the US aims to cut all carbon pollution by 2035 from the power plants that run US homes and businesses. It’s a first step toward the broader goal of zeroing out greenhouse gas (GHG) emissions across the entire economy by mid-century to rein in the climate crisis.
To accomplish this goal, the US will need to move significantly away from fossil fuels. Most remaining oil and gas deposits must remain buried to inhibit global temperatures from rising to more dangerous levels.
Yet, to remake the power sector is a monumentally challenging task. Last year, only about 40% of US electricity came from clean sources.
Experts now state that the Inflation Reduction Act has the potential to forge real inroads. The law provides billions of dollars of incentives that are expected to make renewable energy even more competitive with fossil fuels.
But right now it seems as if the country’s power industry is determined to continue burning fossil fuels. Fossil fuels continue to dominate the global energy system. The EIA forecast ahead to 2024 shows global production of liquid fuels reaching an average of 102.8 million barrels per day (b/d), up from 100.0 million b/d in 2022, driven by large growth in non-OPEC production. Global consumption of liquid fuels could increase from an average of 99.4 million b/d in 2022 to 102.2 million b/d in 2024.
Yes, it can be conceded that natural gas (sometimes referred to as a “bridge fuel” that will allow the power sector to close its coal plants) creates fewer emissions than coal when it’s burned, but producing and transporting gas releases huge amounts of methane, a potent GHG.
We’ve been repeating the mantra since the Paris agreement was formalized in 2016: the goal is to limit global warming to well below 2, preferably to 1.5 degrees Celsius, compared to pre-industrial levels. To achieve this long-term temperature goal, countries must aim to reach global peaking of GHG emissions as soon as possible to achieve a climate neutral world by mid-century. That means turning away, once and for all, from fossil fuels.
New Analysis Offers a Positive Glimpse at the Power Sector
A detailed new analysis finds that the Biden administration can still keep this central 2035 climate goal within reach if the Environmental Protection Agency (EPA) enacts strong carbon pollution standards for new and existing power plants. New policies in major energy markets can help propel annual clean energy investment to more than $2 trillion by 2030, a rise of more than 50% from today.
The report, titled, “Powering toward 100% Clean Power by 2035: The Path to Carbon-Free Electricity after the Inflation Reduction Act,” projects that the investments in the Inflation Reduction Act would increase the nation’s share of carbon-free electricity to 66% by 2030. But if the investments are coupled with strong power plant rules from the EPA, the US could achieve a 76% clean grid by 2030, within striking distance of the 80% target, the analysis found.
To stay within reach of 100% clean electricity by 2035 and address harmful climate pollution from fossil generation, the report indicates that the US must:
- Set ambitious carbon pollution standards for new and existing power plants under the Clean Air Act, through the EPA, and set EPA pollution standards that reduce traditional air and water pollutants and improve public health
- Expand transmission capacity, speed up interconnections, and create market parity for clean energy at the Federal Energy Regulatory Commission (FERC)
- Implement the Inflation Reduction Act effectively, with timely federal guidance on the IRA’s tax credits and grant programs and the distribution of funds in a way that maximizes carbon reductions and equitable economic opportunity
- Advance climate action at the state level, including through accelerated 100% clean electricity and pollution standards that align with 80% clean power by 2030 and heightened oversight of polluting utilities
The administration can meet this goal if state and federal policymakers take additional steps to accelerate the deployment of clean energy nationwide, according to the analysis by the environmental groups Evergreen Action and the Natural Resources Defense Council. The report looked at how the nation could achieve 80% clean electricity by 2030, an interim target consistent with the path to 100% clean electricity by 2035. Strong power plant rules also would help cut carbon emissions from the power sector to 77% below 2005 levels by the end of the decade, according to the report.
Even if the administration enacts strong power plant rules and effectively implements the climate law, the country would still only achieve 76% clean electricity by 2030, just shy of the 80% target. To make up the difference, the report concludes, the Federal Energy Regulatory Commission (FERC) and state policymakers could take additional steps to spur the deployment of clean energy across the country.
For instance, FERC could require utilities to conduct long-term planning for regional transmission lines needed to carry clean energy to urban centers. The commission could also address bottlenecks — known as “interconnection queues” — preventing thousands of clean-energy projects from connecting to the grid.
Final Thoughts about Transitioning the Power Sector
The World Energy Outlook 2022 projects that coal use falls back within the next few years, natural gas demand reaches a plateau by the end of the decade, and rising sales of electric vehicles (EVs) mean that oil demand levels off in the mid-2030s before ebbing slightly to mid-century. Total demand for fossil fuels declines steadily from the mid-2020s by around 2 exajoules per year on average to 2050, an annual reduction roughly equivalent to the lifetime output of a large oil field.
These anticipated results can come about with a huge increase in energy investment — it will be essential to reduce the risks of future price spikes and volatility and to get on track for net zero emissions by 2050.
The plateauing of production and subsequent decline will mean that large amounts of fossil fuel reserves, prospects that are seen today as economic, will never be extracted, according to an analysis in Nature. This has important implications for producers who may be banking on monetizing those reserves in the future and current and prospective investors. Investments made today in fossil fuel energy, therefore, risk being stranded.
Nonetheless, when analyzing fossil fuel extraction under a 1.5-°C-consistent carbon budget, the Nature authors remind us it is not just the supply cost hierarchy of different reserves and resources that drives the regional distribution of production but also the volume of CO2 (and other GHGs) associated with those resources, and, thus, the potential emissions from extraction and consumption.
As long as there continues to be a disconnect between the production outlook of different countries, corporate entities, and the necessary pathway to limit average temperature increases, “the dynamic nature of reserves means that resources can shift across the techno-economic feasibility matrix in either direction (that is, resources can become reserves and vice versa),” according to the Evergreen Action report.
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