How Renewables Fit in Clean Power Plan

Joanna Schroeder

How will the electricity energy mix change with the implementation of the Clean Power Plan? This question was reviewed in the latest Energy Information Administration’s (EIA) Today in Energy. Using the Annual Energy Outlook 2015 (AEO2015) as the baseline, the main compliance strategy to lower emissions rates as the proposed rule comes into effect is to increase natural gas-fired generation to displace and ultimately surpass coal-fired generation. Later, as more wind and solar capacity are added, renewable generation also surpasses coal-fired generation.

Analysis of Impacts of Clean Power Plan - EIAThe analysis finds that changes in the fuel mix play out in different ways across the country, reflecting regional variation in the economics of increases in natural gas generation and renewable capacity. Key determinants include baseline combined-cycle utilization rates and the potential for renewable generation in areas without renewable portfolio standards.

EIA’s analysis also modeled the proposed rule using the High Oil and Gas Resource (HOGR) and High Economic Growth cases from AEO2015 as alternative baselines. The HOGR case reflects a scenario in which more abundant domestic natural gas resources and better technology enhance natural gas supplies, keeping projected annual average spot natural gas prices below $4.50 per million Btu through 2040.

EIA also looked at other cases including several sensitivity cases encompassing different interpretations or implementations of the proposed rule as well as a scenario in which further emissions reductions are required beyond 2030, all of which use the AEO2015 Reference case as their baseline. In addition a case was considered in which new nuclear units not already under construction were brought online.

Ultimately, in all cases renewable energy became a bigger player in the energy mix but whether it played a starring or supporting role was dependent on the level of traditional fuel sources that remained in use.

Clean Energy, Clean Power Plan, Electricity, Renewable Electricty Standard (RES), Renewable Energy, Solar, Wind