Abstract
CO(2) emissions from the US power sector decreased by 8.76% in 2009 relative to 2008 contributing to a decrease over this period of 6.59% in overall US emissions of greenhouse gases. An econometric model, tuned to data reported for regional generation of US electricity, is used to diagnose factors responsible for the 2009 decrease. More than half of the reduction is attributed to a shift from generation of power using coal to gas driven by a recent decrease in gas prices in response to the increase in production from shale. An important result of the model is that, when the cost differential for generation using gas rather than coal falls below 2-3 cents/kWh, less efficient coal fired plants are displaced by more efficient natural gas combined cycle (NGCC) generation alternatives. Costs for generation using NGCC decreased by close to 4 cents/kWh in 2009 relative to 2008 ensuring that generation of electricity using gas was competitive with coal in 2009 in contrast to the situation in 2008 when gas prices were much higher. A modest price on carbon could contribute to additional switching from coal to gas with further savings in CO(2) emissions.
Highlights
US emissions of greenhouse gases decreased by 2.94% in 2008 relative to 2007 and by a further 6.59% in 2009 [1]
Production from coal decreased by 11.63% while the contribution from natural gas combined cycle (NGCC) plants rose by 7.18% [2]
The present analysis most likely underestimates the eventual savings in CO2 emissions that could be realized in response either to a continuing pattern in fuel prices favoring gas relative to coal or a carbon tax intended to accomplish a similar objective
Summary
US emissions of greenhouse gases decreased by 2.94% in 2008 relative to 2007 and by a further 6.59% in 2009 [1]. Emissions from the power sector, which accounts for approximately 40% of total US greenhouse gas emissions [1], declined by an even larger factor, by 8.76 % in 2009 relative to 2008. A contributing factor for the power sector, relates to an important shift from coal to natural gas that took place over this period in generation of electricity in the US. Total production of electricity declined by 4.1% in 2009 relative to 2008. Production from coal decreased by 11.63% while the contribution from natural gas combined cycle (NGCC) plants rose by 7.18% [2]
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