As Coal Sinks, Renewables Soar: Emissions Report Shows Start Of Clean Energy Transition

By Dan Bakal

For the electric power industry, the signs of change are in the air. Power plants are emitting less pollution than in prior years, and renewable power is a bigger part of the energy mix than ever before. That adds up to cleaner air and a more diverse, resilient and lower-carbon electricity system.

The industry is in the midst of a real transition, and a new Ceres report shows that it’s happening even faster than experts predicted.

On a biannual basis, Ceres assesses the environmental performance and progress of the electric power sector by analyzing the air emissions of the nation’s top 100 power producers in collaboration with M.J. Bradley & Associates, the National Resources Defense Council, Entergy, Exelon, Tenaska and Bank of America.

This is the eighth edition of the Benchmarking Air Emissions report, and this year, the findings were particularly significant:

  • From 2008 to 2010, sector-wide sulfur dioxide (SO2) and nitrogen oxide (NOx) emissions both fell by over 30 percent.
  • Over the same period, carbon dioxide (CO2) emissions fell four percent and preliminary data show another five percent reduction in 2011.
  • Non-hydroelectric renewable energy accounted for nearly five percent of U.S. electricity generation in 2011. Including large hydroelectric projects, renewables now provide over 10 percent of our power.

Those results speak volumes. Cutting SO2 and NOx emissions by a third in just a couple years is remarkable, and it reflects that a clean energy transition is within reach. The drop in carbon emissions is also encouraging, but it is important to ensure that the trend continues by continuing to emphasize renewable energy and efficiency. What we did with SO2 and NOx, we can do with CO2.

What are the drivers of this remarkable change? Primarily, power producers are shifting away from coal-fired generation to natural gas-fired plants and even cleaner, zero-emissions renewable energy resources such as wind, solar and geothermal energy. They have also installed emissions controls for the coal plants they are running, as additional Clean Air Act rules are set to go into effect over the next few years.

Some experts have been anticipating the coal to gas switch for several years now, but these results show that it’s happening faster than expected. In late 2010, Deutsche Bank’s Natural Gas and Renewables: A Secure Low Carbon Future Energy Plan for the United States report predicted that gas-fired generation would overtake coal between 2020 and 2030:

But when you look at the findings of the Benchmarking report and the latest data from the Energy Information Administration, you can see that even Deutsche Bank’s bullish predictions may have been too conservative. The shift has come sooner than projected. In April 2012, coal- and gas-fired generation were equal for the first time ever:

Though we can expect generation sources to fluctuate somewhat with seasonal demand and the price of natural gas, this is still an historic shift for the U.S. grid. As power producers adjust their generating fleets, gas is being swapped for coal in some cases, but in others, coal plants are being retired outright. According to the 2012 Benchmarking Air Emissions report, 12 percent of the nation’s coal-fired generation fleet—about 40 gigawatts of capacity—will be retired. And as the chart below indicates, the plants that are being phased out are largely older, high-emitting generating units:

The majority of the plants being retired are more than 50 years old, and they have some of the highest emissions rates per megawatt of power produced. It’s time to replace them with better, cleaner technologies.

And while utilities typically look to natural gas plants to replace coal, they continue to explore zero-emitting resources. Energy efficiency continues to gain traction and is increasingly being treated as a supply-side resource. From 2010 to 2011, utility energy efficiency budgets increased 26 percent to $6.8 billion, and the nation’s largest electricity market—PJM Interconnection—procured over 900 megawatts of energy efficiency in its latest capacity auction.

These industry-wide trends help to inform the main aim of the Benchmarking Air Emissions report, which is to provide side-by-side comparisons of emissions from power producers across the United States. On a company-by-company basis, the trends are encouraging, but for some, there is still a long way to go to becoming diversified, cleaner power producers.

A good example of these contrasts concerns three of the nation’s largest utilities and their work with energy efficiency programs in Ohio. The state has set strong efficiency goals, with a target of 22.5 percent energy savings by 2025, and these standards affect three large power producers: American Electric Power, Duke Energy and FirstEnergy.

Though they are among the highest-emitting power companies, both Duke Energy and American Electric Power have electric utilities in Ohio that are providing comprehensive energy efficiency programs that are meeting and in some cases exceeding goals. On the other hand, FirstEnergy has been publicly opposing Ohio’s efficiency standards and has delivered sub-par programs thus far. (See this report card for more details on how these utilities stack up.) As each of these heavily coal-burning utilities looks to the future of its generation fleet, they will have to take efficiency and other zero-emissions technologies into account.

And if the projections are correct, that’s where the biggest growth will be. Just last week, EIA released its new projections for electricity generation over the next several decades. They predict that coal’s share of electricity generation will continue its decline, while renewable energy will see the biggest jump up by 2020:

In my opinion, these projections are still too moderate—but it is encouraging to see the EIA, which tends to use conservative assumptions, predicting that this important shift will continue just as utilities are entering a large-scale build cycle of new generation. The Brattle Group estimates that the electric power sector’s total capital expenditures will be about $100 billion a year through 2030. And as Ceres’s previous reports have shown, renewables and efficiency are among the lowest-risk, lowest-cost resources available.

I’m encouraged by the findings of the 2012 Benchmarking Air Emissions report, but there’s more work to do. The electric power industry is undergoing a seismic shift, and we must ensure that when the dust settles the new energy landscape is better—and cleaner—than ever before.

Dan Bakal is Director of the Electric Power Program at Ceres, an organization that mobilizes a powerful network of investors, companies and public interest groups to accelerate and expand the adoption of sustainable business practices and solutions to build a healthy global economy.

15 Responses to As Coal Sinks, Renewables Soar: Emissions Report Shows Start Of Clean Energy Transition

  1. Leif says:

    It does not take much to magine what could be accomplished if congress was not p**ing on the parade? If capitalism worked for humanity and Earth’s life support systems? If profits worked for the people, not the polluters? If we had a government of, by and for the people, not the vested interests of the all ready rich? Would we be a happier Nation? World? Why not try?

    Give Peace a chance. Give humanity a CHANCE!

  2. Mike Roddy says:

    Switching to gas is not good enough, nor is celebrating 5% renewables. Have you read the latest science on global warming?

  3. Natural gas is a “bridge fuel to nowhere” (Romm) & fracking is polluting our precious water. As Mike says, this is an emergency climate situation…

  4. Paul Klinkman says:

    The USA is selling more, and more, and more U.S. coal to China, and always at a pittance. China is in need of our national energy welfare, I guess. Then China burns it and the carbon dioxide blows back over the Pacific soon enough. But, the carbon dioxide isn’t on our books so no harm no foul, right?

  5. Ernest says:

    A step in the right direction would be
    1. For developing nations to replace coal with new cheap natural gas technology.
    2. Continue expansion of renewables, esp. cost reductions in solar PV and for rapid deployment in the 3rd world.
    3. Energy efficiency.
    4. Smart grid to expand renewables but supplemented with natural gas peaking plants for load balancing and night usage. As renewables increase, natural gas decrease.
    5. If possible, also try to bring down the cost of nuclear (including dealing with proliferation and waste issues in Gen IV reactors) in later decades to replace natural gas (2030-2050?)

    For the next decade or two, coal is the enemy. Getting rid of it entirely should be the goal.

  6. Solar Jim says:

    Would it not be interesting if state “public” utility commissions said “OK, no more speculative projections for the cost of uranium and fossil carbon (like “mountain removal” mining or “hydraulic fracturing”) over the next one, two and more decades. From now on, approval of your rates (of investment return) shall be based on distributed improvements for your customers, rather than depending on insecure markets of foreign and domestic fuel speculators.

    The price of the source of “clean energy fuel” is zero, which seems more economically secure to me, given today’s technological capabilities. One way seems dependent on substantially increasing costs for “fuels,” while the other seems like increasingly valued sustainable investment.

    P.S. The first word for NRDC is Natural.

  7. From Peru says:

    Yes,it seems good news that coal emissions are down, but just a very tiny part of the reduction is coming from switching to renewables. The reduction is mainly due to a switching to natural gas.

    There is less carbon per kilowatt if the fuel is natural gas instead of coal. However, natural gas is methane, itself 20-100 times stronger as a greenhouse gas than CO2. Due to this, even small gas leaks can outweight the gains from the reduction in CO2 emissions.

    Has anybody compared the total greenhouse intensity (CO2+CH4+N2O+…)of coal plants and natural gas plants?

    Which fuel is better (or more accurately, which is worse), Natural Gas or Coal, in terms of total greenhouse emissions intensity?

  8. A.J. says:

    If it’s in order of priority, I’d swap #1 and #3. Maximizing efficiency is often the cheapest approach, and could reduce the need for additional nat gas capacity (which, as noted on this blog, has it’s own issues and potentially limited climate benefits).

  9. RobS says:

    Peru, it’s not nearly as tiny a fraction as you might think.

    TWh 2006 2011 Change

    Coal. 1,991 1,734 -257
    Natural Gas. 816 1,017 +201
    Renewables. 386 520 +134

  10. quentinp says:

    Methane (‘natural’) gas is a very powerful greenhouse gas. This *fact* is ignored in all the analysis above. With leakage included unnatural gas mining and fracking does more climate damage than even coal. Stop them both or we’re screwed.

    How Deutsche Bank or anyone else could innocently ignore half of the methane gas supply chain is beyond me. Small, old, disused, and even active wells all leak and it is in no one’s net financial interest to stop them.

    With Romney and Ryan set to erradicate the EPA we won’t even be able to bring a lawsuit 20 years after the fact against a long-bankrupt methane gas mining company.

  11. quentinp says:

    According to Bill McKibben a 2% leakage of methane makes unnatural gas as bad as coal. Only ONE study has ever been done and it found 4% leakage. Methane is worse than coal.

  12. quentinp says:

    Only a 40% increase in renewables between 2010 and 2020?

    OK – so say 50% is hydro today and this doesn’t change that implies around a 100% increase in other renewables over 10 years.

    Very approximately 7% compound growth per year.

    Haven’t they seen what’s happening? Wind and solar are increasing between 20 and 100% per year depending on the year and the region of the world. If the US only caught up with Germany we’d smash this forecast. They are stuck in a very old mindset, still.

  13. RobS says:

    My favourite thing about these reports is seeing how quickly we meet their long range predictions. Here we have essentially met all their 2020 predictions in 2012.
    They predicted by 2020 we would have 34% coal, 30% NG and 15% renewables.
    So far for the year in 2012 we have had 35% coal, 30% NG and Renewables 14%.
    With the current rate of change you could probably swap the coal and renewable predictions around pretty safely.

  14. PJMD says:

    Put a progressively-rising price on the carbon content of all fossil fuels, recycle all the proceeds back into people’s pockets, make sure that lower income people can afford their energy, keep it revenue-neutral and then the government can get out of the way. The market will pick winners and losers much more efficiently. Cross border tariff adjustments, WTO compatible, will keep the playing field level, and the market will do the work. The economy is the only engine powerful and diverse enough to get us out of the situation that’s been created by the largest market failure in history. Citizens Climate Lobby is working for this.

  15. Doug Grandt says:

    It seems that the Bradley et al report is intended to be a ‘benchmark” as is implied by the title “Benchmarking Air Emissions of the 100 Largest Electric Power Producers in the United States”…

    Great! Good start!

    What I would like to see Bradley et al — or another strategic planning group — produce on the heals of this benchmark is an assessment of a few alternate cases by which to continue the downward trend in emissions using a different paradigm. Let’s consider a NEW PARADIGM and compare something really INNOVATIVE against the “null hypothesis” BASE CASE of replacing Fossil Fuel “A” with Fossil Fuel “B”. And then I would like to read a discussion around the pros and cons of each alternative, along with a recommendation, with sensitivity to the key assumptions.

    For example, how about a completely new and innovative paradigm of replacing Fossil Fuel “C” with Natural Fuel “W” and replacing Fossil Fuel “G” with Natural Fuel “S” and variations on THAT theme. Let’s get out of the predictable “clerical business-as-usual” rut that got us into this pickle and JAZZ IT UP with a whole new way of making music, interweaving outlandish themes and incredulous riffs, if you get my drift.

    WHY? Because we need to start CUTTING emissions from all sources instead of shifting to LESS WORSE strategies. I take to heart what I heard George Woodwell say in May of 2009, which was simply:

    “We need to abandon our reliance on the burning of carbon-based fuels quickly … we are poisoning our planet” … the key word is abandon, spelled A-B-A-N-D-O-N.

    To channel a colorful joke invoking the desire for just a scoop delicious-but-sold-out chocolate ice cream (readers not familiar with the joke may simply imagine an (in)appropriate adjective replacing the “A” word) to wit:
    Q: Can you spell the A-B-A-N-D-O-N in “REPLACE COAL WITH GAS”? ;-)
    Punch line: That’s right! THAT’s what I’ve been trying to tell you …

    So, challenge to Bradley et al or Brand-X: Please evaluate the net long-term benefits to humanity and other living things (including realistic quantification of all externalized elements, e.g., methane leakage and deleterious CO2 impacts on health, quality of life, survivability and existence of species) that accrue from a range of alternate aggressive transition strategies.

    What would happen to natural systems and creatures, as well as global economies and humanity (as if humanity were not natural) if, in the most extreme cases, for example, if we were to a) begin shutting down carbon-fueled electricity plants and carbon-fed refineries one-by-one, and b) begin dismantling the carbon infrastructure on a steady, relentless rate over the next, say c) 2 decades, d) 3 decades, or e) 4 decades? Quantify the acceleration in the shift to carbon-free innovative technology. Quantify the increase in the cost of energy. (Perhaps equivalent to a fee to pollute?) Quantify the degradation or improvement in quality of life. Assess species survivability. Test the sensitivity and down-side risk for variations in key assumptions.

    Not just in the next fiscal quarter, but in the LONG TERM. Think “Return on Investment.”