Using renewable energy will be the second choice for power companies in the United States that want to avoid emissions of greenhouse gases, according to a report from the federal government.
WASHINGTON, DC – Power companies will “shift dramatically away from coal to natural gas and, to a lesser extent, renewables” in order to comply with limits on the emission of carbon dioxide (CO2), says “Strategies for Reducing Multiple Emissions from Power Plants” that was released late last month by the Energy Information Administration (EIA). Power companies will invest in emission control equipment to comply with limits on nitrous oxide (NOx) and sulfur dioxide (SO2), but the projected price impacts of meeting the CO2 cap are much larger than those of meeting NOx and SO2 caps, both of which will boost electricity prices by only 1 percent. The CO2 allowance prices (expressed in dollars per metric ton carbon equivalent) contained in the EIA analysis “are generally lower than those projected in studies of efforts to meet the target from the Kyoto Protocol over the whole economy rather than just in the power sector.” “Over the next decade, power plant operators may face significant requirements to reduce emissions of SO2, NOx), CO2 and mercury,” says the preamble. “At present, neither the future reduction requirements nor the complete timetable is known for any of these airborne emissions, and compliance planning is difficult. Power plant operators are wary of making investments that could prove uneconomical if and when new regulations are enacted.” “Increased generation from renewables is expected to play a role in cases with CO2 caps, but their contribution is much smaller than that of natural gas,” it explains. “In cases without a CO2 cap, projected additions of renewable generating capacity are virtually unchanged from those projected in the reference case.” A cap on CO2 emissions would increase the cost of building and operating facilities that combust fossil fuels, “making renewable technologies more economically attractive,” it adds. Geothermal, biomass and wind are expected to show the largest increases with a carbon cap, and total generation from renewables (excluding large hydroelectric sites) could provide as much as 8 percent of total U.S. electricity by 2020, compared to only 3 percent predicted in EIA’s reference case. Generation from geothermal facilities is projected to increase to 104 billion kilowatt-hours by 2010 with caps, compared with 25 billion kWh without. Biomass could generate 71 billion kWh (excluding cogeneration) within ten years, compared with 22 billion kWh in the reference case. Generation from wind turbines could reach 18 billion kWh in 2010 and 86 billion in 2020, compared with base projections of 12 and 13 billion kWh respectively. Currently, 3,000 megawatts of geothermal capacity is in service across the U.S., with 3,000 MW of municipal solid waste, 330 MW of solar thermal, and 78,000 MW of conventional hydroelectric capacity. “Among the renewable generation technologies, central station wind power has shown the most significant growth in recent years, and it is expected to continue to grow in the near future,” it adds. “Spurred by declining capital costs, improving performance, and both Federal and State incentives, total U.S. wind generating capacity is estimated to have increased by nearly 70 percent from 1997 through 2000, to more than 2,700 megawatts. Further near-term additions are also projected.” It notes that, together, PV and wind power can provide no more than 12 percent of any region’s annual electricity generation. EIA estimates that mandates such as renewable portfolio standards will add 5,065 MW of new renewable capacity by 2020, of which 2,900 MW will come from new wind, 1,145 MW from landfill gas, 840 MW from biomass, 117 MW from geothermal, and 64 MW of capacity in new solar PV and solar thermal facilities. Voluntary programs will contribute 291 MW, almost all of which will come from wind farms. “Projections of large increases in renewable energy use should be viewed with caution,” the report warns. “The availability of renewable energy resources to support major growth is often uncertain, particularly in the case of biomass, geothermal and wind resources, and the costs and performance of new technologies also are uncertain. Consumer tastes, environmental accommodation and market acceptance may be problematic, and the ability of different suppliers and regions to integrate large proportions of renewables, especially intermittent sources like solar and wind, into overall supply is not known.” Because renewable energy technologies cost more than fossil alternatives, they are projected to account for “very little” new generating capacity through 2020 in the base reference case, other than near-term facilities to respond to RPS requirements. EIA is the independent statistical agency of the U.S. Department of Energy. The analysis examines the impacts on the energy industry of strategies to reduce emissions at U.S. power plants.