Energy Efficiency Markets LLC

Efficiency and the not-to-be-ignored gas-fired plant

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Carbon dioxide emissions dropped significantly in the US in 2009. The economy played an obvious role; not so obvious was the influence of power generation and its increasing efficiency.

CO2 emissions have been trending down for the last decade by about 0.9%.  But the 2009 drop was far more dramatic -- 7% -- the largest decline since the Energy Information Administration began keeping energy data more than 60 years ago.

This tells us a lot about just how bad economic conditions were. (As if we needed to be told!)

Compare the last decade to the previous one and you get the picture. Our gross domestic product grew about 3.3% from 1990 to 1999 then dropped by about half for the next decade, with much of the decline attributable to the recent miserable financial situation, according to a May 5 EIA report. 

CO2 levels tell us about the economy because emissions are produced by power plants and transportation fuels. The better the economy the more energy we use and presumably the more CO2 we produce. For example, we consumed only 13,277 thousand barrels of petroleum per day for transportation in 2009, down from 14,287 thousand barrels per day two years earlier, a 7.1 percent drop.

But here is where it gets interesting. Even with the economy falling over the cliff, emissions should have grown a little bit, about 0.6% to 0.7%, based on past scenarios, so what changed? Why did CO2 emissions drop instead?

EIA says power plant efficiency played a big role. We have been moving toward greater use of highly efficient natural gas-fired plants, which are less carbon intensive than coal-fired generation, our largest electricity source. From 2000 to 2008, the US added about 120 gigawatts of natural gas combined cycle generation.

“If the emissions intensity had not changed and emissions had risen at the same rate as generation, they would have reached 456 million metric tons in 2009.  Therefore, the increased efficiency of new generation capacity resulted in avoided emissions of 82 million metric tons of carbon dioxide,” EIA said. 

Several market factors played a role in our construction of new natural gas-fired plants. This type of plant is relatively easy and quick to build (unlike nuclear power), and it does not face the kind of environmental opposition of coal-fired generation.  In addition, market pricing favored natural gas in 2009. Coal prices rose 6.8% from 2008 to 2009 while natural gas prices fell 48%, according to EIA.

Our addition of wind farms to the grid and our greater use of nuclear power also played a role in carbon reductions, although less so than natural gas efficiency, says the report.

So, economic forces favored the efficient choice. But what will happen when the economy revives?  Natural gas prices are known for their volatility; spikes can be dramatic when supplies tighten and natural gas can fall out of favor.

I won’t pretend to be a fortune teller on energy prices and supply choices. EIA, however, appears to think that even when the economy rebounds our energy supply mix will still trend toward lower emissions, with most new power demand met with gas-fired generation and renewables.

“If coal, which was more heavily impacted by the recent economic downturn than other energy sources, rebounds disproportionately, the carbon intensity of the energy supply could rise above the 2009 level.  However, longer-term trends continue to suggest decline in both the amount of energy used per unit of economic output and the carbon intensity of our energy supply, which both work to restrain emissions,” the report says.

The role of gas-fired generation is a large topic within inner-utility and power planning circles. But the resource tends to be ignored by the green community. Clearly, though, if you are a CO2 watcher, this power source is important to keep an eye on as we piece together our future energy puzzle.

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