Electric Power Industry is Transitioning to Lower-Carbon Sources and Positioned to Meet New EPA Carbon Standards
A new report on U.S. power plant emissions from the country’s top 100 electric power producers shows a downward trend in nitrogen oxides, sulfur dioxides, mercury and carbon dioxide. The findings show that the industry is already shifting toward a combination of increased energy efficiency and lower carbon fuel sources, which should help it meet new EPA carbon standards.
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A new report on U.S. power plant emissions from the country’s top 100 electric power producers shows a downward trend in nitrogen oxides (NOx), sulfur dioxides (SO2), mercury and carbon dioxide (CO2) since 2000, with CO2 emissions decreasing 13 percent between 2008 and 2012. The findings show that the industry is already shifting toward a combination of increased energy efficiency and lower carbon fuel sources, which should help it meet new Environmental Protection Agency (EPA) carbon standards expected to be announced on June 2nd.
“The electric power industry is firmly on the path toward a low carbon energy future, and history shows that it is not only capable of meeting new pollution limits, but that it can do so while keeping our lights on and our economy growing,” said Mindy Lubber, president of Ceres, a nonprofit sustainability advocacy group which helped produce the report. “EPA’s proposed standards will stimulate further investment in low-carbon, low-risk resources like renewable power and energy efficiency.”
The report shows wide disparities in CO2 emission rates among states. CO2 emissions per megawatt-hour of power produced were found to vary close to twenty-fold among the states, with Kentucky, Wyoming, West Virginia, Indiana, and North Dakota having the highest CO2 emissions rates, and Idaho, Vermont, Washington, Oregon, and Maine with the lowest CO2 emissions rates.
A small number of companies account for the majority of emissions. American Electric Power, Duke Energy, Southern Company, NRG, and Tennessee Valley Authority generate 25 percent of overall electric sector CO2 emissions, though some of these producers have been reducing emissions in recent years. Nearly a quarter of the electric power industry’s SO2 and NOx emissions come from just three and four top producers, respectively.
The report also shows that major power companies in the Southeast, Midwest and Southwest regions have all seen declines in CO2 per megawatt-hour produced since 2000, with power producers in the Gulf South and Southeast (Entergy Corporation, Dominion and Southern Company) achieving some of the deepest reductions.
“Today’s report demonstrates clearly what can be accomplished when environmentally responsible power generation is unleashed in competitive power markets,” said Derek Furstenwerth, senior director of environmental services for Calpine Corporation. “Calpine has built our fleet using modern, environmentally-friendly power generation technologies that meet the needs of an economy that demands ever cleaner, more fuel-efficient and dependable sources of electricity. Our success in all of these areas is demonstrated by our continued position as a leading generator and among the lowest-emitting companies in this report.”
Benchmarking Air Emissions is the 10th in a series highlighting environmental improvements and progress in the nation’s electric power sector since 1997. The 100 power producers evaluated in the report represent 86 percent of the electric power generated in the U.S. and 87 percent of the industry’s pollution. Based on 2012 generation and emissions data from the U.S. Energy Information Administration and the EPA, the report is a collaborative effort between Ceres, Bank of America, four power producers (Calpine, Entergy, Exelon and Public Service Enterprise Group (PSEG)) and the Natural Resources Defense Council, and is authored by M.J. Bradley and Associates.
Key findings of the report include:
NOx and SO2 emissions in 2012 were 74 percent and 79 percent lower, respectively, than they were in 1990 when Congress passed major amendments to the Clean Air Act. Mercury emissions decreased 51 percent since 2000.
CO2 emissions have decreased in recent years, declining 13 percent between 2008 and 2012. Energy efficiency improvements, displacement of coal generation by natural gas and renewable energy sources, and slower economic growth all contributed to the decline.
Coal accounted for 39 percent of the power produced by the 100 largest companies in 2012, down from 44 percent in 2011. Roughly 18 percent of the nation’s coal-fired generating fleet (over 58,000 megawatts) has been slated for retirement since 2010. Retiring coal plants tend to be older and smaller than the industry average. Also, average utilization of coal plants (how often the plants are run) has dropped from 73 percent in 2008 to 60 percent in 2013.
Among the 100 largest companies, natural gas use rose from 23 percent of power produced in 2011 to 29 percent in 2012. Across the entire electric sector, natural gas use has increased 60 percent over the past ten years, reflecting relatively low natural gas prices.
Among the 100 largest companies in 2012, nuclear accounted for 22 percent of power produced; hydroelectric power 7 percent; non-hydroelectric renewables and other fuel sources 3 and 1 percent, respectively; and oil is negligible. Nuclear power plants account for about 60 percent of zero-carbon-emitting sources in the U.S.
Across the entire electric sector, renewable energy electricity generation increased 31 percent since 2010 (by more than 50,000 gigawatt hours) even as total electricity generation declined modestly.
Continued expansion of utility energy efficiency programs has contributed to significant reductions in demand for electricity in certain regions, such that demand growth has been flat to negative nationally in recent years. Energy efficiency programs grew to $8.2 billion in 2012, with average costs of 2 to 4 cents per kilowatt hours saved compared with 10 cents for the average retail price of electricity.
“One objective of this report is to help illuminate the complex emissions landscape in this country--the struggle to balance environmental priorities with economic sustainability," said Chuck Barlow, Entergy’s vice president of environmental strategy and policy. "People want jobs, a strong economy, and clean air and water. Entergy supports all these aspects of American life while maintaining a track record of strong environmental performance. A decade of investments in efficient natural gas and clean, reliable nuclear energy has significantly decreased Entergy's emissions intensity.”
In early June, the EPA is scheduled to release its proposed standards to reduce carbon emissions from fossil-fired power plants. The proposed standards are one of several initiatives that the Administration is pursuing to reduce greenhouse gas emissions, since the U.S. Supreme Court ruled in 2007 that EPA had a responsibility under the Clean Air Act to determine whether greenhouse gas emissions are endangering public health or welfare, and, if so, to respond to the threat of climate change.
The report shows that the electric industry has a successful track record of reducing air pollution emissions, while meeting the nation’s energy needs.
“Power plants remain America’s biggest source of pollution driving climate change. This report shows that a number of large power companies reliably produce affordable electricity with much less carbon pollution than others. EPA's upcoming carbon pollution standards are what is needed to move the rest of the industry to catch up to these leaders,” said David Hawkins, director of climate programsat the Natural Resources Defense Council.
“Today’s report shows an industry in transition,” said Geraldine A. Smith, general environmental counsel managing director, environment, PSEG Power. “Driven by low natural gas prices and more stringent environmental regulations, CO2 and NOx emissions from the power sector have declined in New Jersey. We at PSEG Power are proud of our progress, and proud to have one of the lowest emitting fleets in the nation thanks in large measure to our nuclear stations. The report underscores nuclear power‘s role in a low-carbon energy future.”
The 2014 Benchmarking Air Emissions report’s comparative analysis of emissions data is relevant to policymakers considering regulatory approaches, public interest organizations concerned about public health and consumer costs, and financial analysts and investors assessing company risk exposure as power plant emission limits in the U.S. gain more momentum.
About Ceres Ceres is an advocate for sustainability leadership. Ceres mobilizes a powerful coalition 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. Ceres directs the Investor Network on Climate Risk (INCR), a network of over 100 institutional investors with collective assets totaling more than $12 trillion. Ceres also directs Business for Innovative Climate and Energy Policy (BICEP), an advocacy coalition of nearly 30 businesses committed to working with policy makers to pass meaningful energy and climate legislation. For more information, visit http://www.ceres.org or follow on Twitter .
About Bank of America Bank of America’s commitment to corporate social responsibility (CSR) is a strategic part of doing business globally. We have several core areas of focus for our CSR, including responsible business practices; environmental sustainability; strengthening local communities with a focus on housing, hunger and jobs; investing in global leadership development; and engaging through arts and culture. As part of these efforts, employee volunteers across the company contribute their time, passion and expertise to address issues in communities where they live and work. Learn more at www.bankofamerica.com/about and follow us on Twitter at .
About Calpine Founded in 1984, Calpine Corporation is a major U.S. power company, currently capable of delivering more than 29,000 megawatts of clean, reliable and fuel-efficient power to customers and communities in 20 states in the United States and Canada. Calpine Corporation is committed to helping meet the needs of an economy that demands more and cleaner sources of electricity. Calpine develops, constructs, owns and operates a modern and flexible fleet of low-carbon, natural gas-fired and renewable geothermal power plants. Using advanced technologies, Calpine generates power in a reliable and environmentally responsible manner for the customers and communities it serves.
About EntergyCorporation Entergy Corporation is an integrated energy company engaged primarily in electric power production and retail distribution operations. Entergy owns and operates power plants with approximately 30,000 megawatts of electric generating capacity, including more than 10,000 megawatts of nuclear power, making it one of the nation’s leading nuclear generators. Entergy delivers electricity to 2.8 million utility customers in Arkansas, Louisiana, Mississippi and Texas. Entergy has annual revenues of more than $11 billion and approximately 14,000 employees.
About Exelon Exelon Corporation (NYSE: EXC) is the nation’s leading competitive energy provider, with 2013 revenues of approximately $24.9 billion. Headquartered in Chicago, Exelon has operations and business activities in 48 states, the District of Columbia and Canada. Exelon is one of the largest competitive U.S. power generators, with approximately 35,000 megawatts of owned capacity comprising one of the nation’s cleanest and lowest-cost power generation fleets. The company’s Constellation business unit provides energy products and services to approximately 100,000 business and public sector customers and approximately 1 million residential customers. Exelon’s utilities deliver electricity and natural gas to more than 6.6 million customers in central Maryland (BGE), northern Illinois (ComEd) and southeastern Pennsylvania (PECO).
About PSEG Public Service Electric and Gas Company (PSE&G) is New Jersey’s oldest and largest regulated gas and electric delivery utility, serving nearly three-quarters of the state’s population. PSE&G is the winner of the ReliabilityOne Award for superior electric system reliability. PSEG Power is a major unregulated independent power producer in the U.S. with three main subsidiaries: PSEG Fossil, PSEG Nuclear, and PSEG Energy Resources and Trade. PSEG Power operates one of the most balanced portfolios in the country, both in terms of fuel mix and market segment (base load units, load following units and peaking units) and is committed to operational excellence. PSE&G and PSEG Power are subsidiaries of Public Service Enterprise Group Incorporated (PSEG) (NYSE:PEG), a diversified energy company (www.pseg.com).
About NRDC The Natural Resources Defense Council (NRDC) is an international nonprofit environmental organization with more than 1.4 million members and online activists. Since 1970, our lawyers, scientists, and other environmental specialists have worked to protect the world's natural resources, public health, and the environment. NRDC has offices in New York City, Washington, D.C., Los Angeles, San Francisco, Chicago, Livingston, Montana, and Beijing. Visit us at www.nrdc.org and follow us on Twitter .