U.S. power sector carbon emissions fell to their lowest levels since the mid-1990s last year.
This development was thanks to record coal plant closures, investment in energy efficiency, and a massive uptake in solar and wind energy projects, according to Bloomberg New Energy Finance’s (BNEF) latest Sustainable Energy Factbook for 2016.
President Obama’s Clean Power Plan, introduced in August 2015, combined with poor market conditions for fossil fuels, led to the decommissioning of 14 GW of coal-fired power facilities across America – five percent of the nation’s installed coal capacity.
Wind energy was the top source of new electric capacity in 2015, adding 8.6 GW to national grids – 65 percent above 2014 levels. This was followed by solar PV, which added 7.3 GW of new installed capacity.
Confidence was cemented for producers of renewable energy when Congress late last year finally extended tax credits for wind and solar by five years, through 2019 and 2021, respectively. A Production Tax Credit for other renewable technologies was also given a two-year extension.
Commenting on the report, Pattern Energy CEO and American Wind Energy Association (AWEA) Board Chair, Mike Garland, said:
“With long-term policy certainty in place, wind power is ready to keep this American success story going. Further investments in our technology will enable utilities to cut costs and pass on the savings to American homeowners and businesses.”
Annual investment in energy efficiency measures by natural gas and electric utilities continued to grow, reaching USD 6.7 billion and rising. More importantly, energy productivity in 2015 – the growth of U.S. GDP vs. energy consumed – maintained its steady climb, improving 2.3 percent on 2014. Since 2007, the report states, electricity demand from U.S. homes and businesses has been flat, compared to a compounded annual growth rate of 2.4 percent.
“The U.S. is making major strides toward a de-carbonized electricity grid and set important new records in 2015. Critically, these milestones represent structural changes to the fleet, suggesting a permanent change is afoot,” the report (PDF) states.
This decoupling of dirty power and rapidly expanding pool of renewable energy sources have led to the U.S. power sector posting its lowest yearly carbon emissions since 1995. 2015’s emissions total of 1,985 mega-tons (Mt) of CO2 was 4.3 percent below 2014 levels and 17.8 percent below 2005 levels.
Importantly, the changes have not affected American consumers. The cost of electricity remains nearly six percent lower than its peak in 2008, and year-on-year retail rates actually fell 1.3 percent in 2015, even as GDP grew 2.4 percent. This is in part due to the USA’s new love affair with natural gas, which has replaced a great deal of old coal-fired capacity.