08 Jun 2017 | 10:31 UTC — Insight Blog

US utilities have pushed down their CO2 emissions largely on their own

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Featuring Jeffrey Ryser


Four big US utilities have each reported in recent days substantial carbon dioxide emission reductions over the past few years due principally to an increase in the use of natural gas, renewable generation and to the sale or closure of coal-fired assets.

The four utilities — Duke Energy, Southern Company, American Electric Power and Xcel Energy — have reported CO2 reductions of between 28% and 37% over an 11-year period starting in 2005. Each of the four have made changes to their generating portfolios to take advantage of lower-price renewables that attract federal and state-level subsidies but which also, the utilities say, increasingly appeal to their customers.

On June 1, President Donald Trump announced he was pulling the country out of the non-binding Paris climate agreement. As one of the utilities noted, however, their CO2 emissions decline was accomplished outside of any federally mandated program and prior to the official launch of the Paris agreement in November 2016.

The utilities’ reports of reduced CO2 emissions are not new, though the accumulated size of the reductions, have become more pronounced in the past two years as coal-fired assets have, in some cases, been retired or sold and investments in natural gas-fired, wind and solar generation have increased.

It should be noted that in the earlier years, some of the US utilities had to be pressured to back away from coal, which they had relied upon for decades.

Nonetheless, the amounts of the reductions for the four utilities strongly suggest that the US power sector would easily meet the accord’s non-binding target of reducing CO2 emissions by between 26% and 28% below 2005 levels by the year 2025.

According to data from the Trump administration’s own Department of Energy and the Energy Information Administration, CO2 emissions from the US electricity sector have been falling steadily until they reached in 2016 a level  almost 25% below levels emitted in 2005.

Emissions of CO2 from the power sector’s coal-fired generation has come down 37.5% since 2005.

Duke has been ‘modernizing’

North Carolina-based Duke Energy says it has been “modernizing and diversifying” its portfolio for the past decade, which means it has been retiring older coal plants, building new natural gas-fired facilities and building up a renewables portfolio that total includes 2,300 MW of wind and 600 MW of solar. Its large wind portfolio is a beneficiary of the federal government’s production tax credit program created by the US Congress.

In 2016, the company said recently, its CO2 emissions were 29% below its 2005 level.

The company says it has invested $4 billion in renewables since 2007 and intends to invest $11 billion more.

Xcel reduces emissions by 30%

On May 30, Minneapolis-based Xcel Energy released a statement saying that it has had a 30% reduction in its carbon emissions between 2005 and 2016. Xcel now anticipates it will achieve at least a 45% reduction by 2021.

The company said it is getting its reductions by adding “significant amounts of low-cost wind and solar energy,” by encouraging energy efficiency and retiring aging coal units and repowering some facilities with natural gas.

The firm has reported to the Climate Registry that its generating portfolio emitted approximately 53 million metric tons of CO2 in 2016, down from 56.6 million tons in 2015.

In late April, Xcel announced that it will build 9 new wind farms with combined capacity of 2,750 MW. The company has said it expects each of those facilities to be qualified to receive 100% of the value of the PTC when they are placed into service.

Southern Company reduces CO2 by 28%

Atlanta-based Southern Company said its 2016 annual CO2 emissions were down to a level 28% below its 2005 level. The company, which is also building two new nuclear reactors and an IGCC unit that is designed to capture CO2, has seen the share of its coal-fired generation fall from 71% in 2005 to 31% last year.

Its total CO2 emissions are now below the 100 mt level, and, it notes, this has been done outside of any federally mandated program.

AEP says 2016 was 37% below 2005 level

AEP

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based in Columbus, Ohio, said in its 2017 corporate accountability report that its CO2 emissions in 2016 totaled 93 million mt, down from 146 million mt in 2005. It said the decline was largely due to coal unit retirements, low natural gas prices, increased use of renewables and slowing load growth.

AEP annual CO2 emissions

The company has said it expects CO2 emissions to fall to 74 million mt in 2017 due to the sale of generation assets.

AEP has said that that with the extension of federal production and investment tax credits for wind and solar, and continued price declines for renewable technologies, “it makes more economic sense for our customers and lowers our carbon profile to include these resources.”

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