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BCSE In The News

One statistic shows just how dramatically our energy system is changing

Washington Post, February 4, 2016
By Chris Mooney

In mid 2015, when the Environmental Protection Agency released its Clean Power Plan, it made a prediction of sorts. Under the new policy to cut greenhouse gas emissions in the electricity sector, the EPA said, coal use would decline and the use of natural gas and renewables would increase. The result, by the year 2030, would be a country in which coal, once the leading source of U.S. power, would only provide “about 27 percent of the projected generation,” with “natural gas providing about 33 percent.”

Well. According to new data just released in the 2016 Sustainable Energy in America Factbook — a project of Bloomberg New Energy Finance, produced for the Business Council for Sustainable Energy — the shift may be happening a lot faster than the EPA thought less than a year ago.

In detailing just how transformative the year 2015 was for the U.S. electricity system, the report notes that coal only accounted for 34 percent of U.S. electricity last year — versus 39 percent just a year earlier, in 2014, and 50 percent in 2005. That’s a steep decline indeed.

In contrast, the burning of natural gas — buoyed by cheap prices brought on by the shale gas boom — produced nearly as much of our electricity. “Natural gas is now within striking distance of being the largest source of US power, producing just over 32% of US generation in 2015,” notes the report.

Maybe we won’t have to wait until 2030 after all to see this transition.

“We saw natural gas and coal each provide about one third of U.S. electricity, and this was the smallest contribution we’ve seen from coal within the modern era,” said Colleen Regan, senior analyst for North American power at Bloomberg New Energy Finance. And it wasn’t just cheap gas, she notes — 2015 also saw 14 gigawatts’ worth of coal plant retirements, or 5 percent of U.S. coal capacity overall.

Because natural gas only emits about half as much carbon dioxide when burned in comparison to coal, a shift like this has major implications for the U.S.’s overall pollution profile. Sure enough, the Sustainable Energy in America Factbook also finds that 2015’s greenhouse gas emissions from the electricity sector were the lowest since 1995, at 1,985 million metric tons. That number was also an impressive 4.3 percent lower than levels just a year earlier, in 2014.

The natural gas surge isn’t going to suddenly stop, either, suggests Regan. “We think that there’s great potential for these levels to continue, for the U.S. to continue producing huge amounts of natural gas, which should keep prices relatively low,” she said.

2015 was also a major year for renewable energy installations, featuring 8.5 gigawatts of new wind capacity and 7.3 gigawatts of solar photovoltaics (the latter being a record high for one year). The result, says Regan, is that while “nonhydro renewables were about 2.2 percent of the U.S. electricity mix in 2005, and in 2015, they were 7 ½ percent.”

In a separate report released earlier this week, the Federal Energy Regulatory Commission also underscored the strength of this transition. It noted that for new installed electricity generating capacity in 2015, only 3 megawatts’ worth of coal was added, versus 5,942 megawatts (5.94 gigawatts) of natural gas and 7,977 megawatts (7.97 gigawatts) of wind, the latter representing slightly less than Bloomberg’s number, which the Factbook calls an “estimate.”

And even as this transition occurs — more natural gas and renewables, less coal — the United States seems to be neither using much more electricity nor paying more for it. “Since 2007, electricity demand has been flat, compared to a compounded annual growth rate of 2.4% from 1990 to 2000,” notes the Factbook. This has been helped along by greater energy efficiency, among other factors. Meanwhile, “in most regions of the U.S., retail power prices on average are almost 6 percent below the peak we saw in 2008,” says Regan.

The Clean Power Plan hasn’t even kicked in yet, and yet U.S. electricity is already undergoing a transition that will take the country a significant amount of the way toward achieving its goals. And at least so far, fears that this transition is going to be costly or difficult don’t seem like they’re being realized.