Energy Trends: Fossil Future or Renewable Outlook?
Energy, sitting at the intersection of powering society and emitting greenhouse gasses (GHG) linked to climate change, has become a highly partisan issue, stylized into soundbites. War on coal. Windturbine syndrome. Renewable energy raises electricity rates. 400 parts per million. The list goes on.
Though there is at least partial merit to some of the noise on energy, many of our discussions are disconnected from a basic knowledge of the state of our energy system. How much energy do we use? How are emissions actually trending and where are they coming from? How are we currently generating power and how will that change in the future? What does this all mean for policy?
To get a good picture of what’s going on in energy in the U.S., The Energy Information Administration’s Annual Energy Outlook and the recently released Electric Power Monthly and State-Level Energy-Related Carbon Dioxide Emissions, 2000–2011 reports are a good place to start. To add more regional context (and inspire a bit of friendly border rivalry), it’s also helpful to look at what different states are doing, particularly those who share similar climates, cultures, and resource availability.
Last year, the U.S. consumed roughly 97 quadrillion Btus (quads) of energy. A mere 38 quads were transformed into energy services (for example, lighting a room, heating water for cooking), while the rest was lost or rejected through the transformation process (think of a car engine generating waste heat instead of using that energy to turn the wheels). This use is down slightly from some years, such as 2008 and 2010, but is up from last year’s estimate of 95 quads. Overall, the last five years has seen pretty consistent energy consumption.
Also consistent is the proportion of energy by use. Consistently the second biggest consumer of energy, transportation derived 92 percent of its energy from petroleum (the rest coming from natural gas and biomass) and is responsible for 28 percent of total US GHG emissions released in the U.S. Electricity generation is the largest consumer of energy, last year using 38 of the 97 quads, or roughly 40 percent of total energy consumption. Eighty-six percent of this energy came from coal, nuclear, and natural gas, with only a small sliver coming from clean energy. Not suprisingly, electricity is also the largest source of GHG emissions, accounting for almost one third of the total.
Looking just at electricity, nationwide, we added 4,350 megawatts (MW) of utility-scale electric power generation capacity between January and June of this year. Most of this new capacity was built in three of the largest economies, Florida, Texas, and California. These states continued the trend of favoring natural gas, solar, and wind, all considered low or no carbon fuels/generation technologies.
Capacity additions are a good indicator of what the mix of our energy generation—how much coal versus nuclear, for example—may be changing to in the future. The first half of 2014 lends support for a trend toward a larger role for natural gas and renewables and a slow decline in coal, though this is data only from 6 months. Additionally, as shown by the U.S. Energy Information Administration, combined cycle natural gas plants dominated new natural gas capacity additions. As opposed to combustion turbines, combined cycle plants are generally more compatible with intermittent resources like wind and solar as they are more economically and physically more capable of being cycled between output levels to accommodate demand as well as other power generation sources.
Despite this trend, the general look of the energy pie is not expected to change dramatically through 2040. In the EIA’s Energy Outlook 2014 with Projections to 2040, renewably generated energy is expected to increase by 69 percent by 2040 with a more than 140 percent increase in non-hydro renewable generation. Despite this, since fossil fuels such as coal already hold a larger proportion of the generation portfolio and renewables account for roughly 12 percent, renewable energy is expected to account for only 16 percent of generation by 2040 (assuming no substantial policy changes). One exception could be under the EIA’s scenario of accelerated retirements of coal and nuclear plants. In this case, renewables still stay a small proportion of total energy generation, but natural gas generation increases rapidly.
Capacity additions alone are insufficient to shed light on where our electricity generation is coming from now. Looking at current net generation by source in the region, our continued reliance on coal in the Midwest becomes clear. Among Minnesota and its neighbors, all but South Dakota have the most electricity generation coming from coal. South Dakota is the odd state out with most of its power generated from conventional hydropower.
Also clear from this picture is the impact of a decade of wind development. Except in Wisconsin where the wind resource is poorer, wind is rivaling the share of more traditional power sources such as nuclear. By contrast, Wisconsin has a higher proportion of natural gas, a cleaner alternative to coal.
Share of total energy generation by fuel
Data from the Energy Information Administration’s Electric Power Monthly
Note: only includes most significant energy sources.
Moving from snapshot to change over time, compared to the same period (January-June) last year, all states have seen an increase in the amount of electricity generation coming from wind. Minnesota was the only state to increase the amount of electricity generated from coal and nuclear. However, since there have been no new capacity additions in Minnesota for either, the increase is likely due to higher output levels and market conditions that drive dispatch decisions favoring coal and nuclear as compared to last year.
Change in net generation by fuel source, January-June 2013 versus 2014.
Data from the Energy Information Administration's Electric Power Monthly
As alluded to above, energy mix is an important component to total GHG emissions. In Minnesota’s case, 41 percent of GHG emissions come from electric power, the largest single source of emissions. Electricity is also the largest GHG emissions source for Wisconsin, North Dakota, and Iowa as well. Conversely, with its large supply of hydropower, South Dakota’s electricity only accounts for 20 percent of emissions and as a result, South Dakota has the fifth lowest total emissions in the U.S.
Per capita emissions paint a different story, however. When adjusting for population, South Dakota’s small population and high amount of personal travel moves it to the middle at 23rd highest GHG emissions per person. Iowa and North Dakota shoot to the top with the 11th and second highest GHG emissions per person, respectively.
Moving to the second largest energy user, transportation, some positive trends are worth noting. First, personal vehicle travel demand, known as vehicle miles traveled (VMT), is expected to stay relatively flat for the next 15 years, around 12,500 miles annually per person. However, the number of licensed drivers is expected to increase from around 213 million to almost 270 million by 2040. This growth could reverse the negative trend in total emissions in the first few years of the current decade, but new fuel economy standards for light duty vehicles as well as fuel switching makes up for the growth in drivers.
Twenty-six percent of Minnesota’s end use energy consumption goes to transportation, yet as of 2011, transportation accounted for almost 34 percent of emissions. Emissions are impacted by several factors, including how people drive, how far, and what fuel they use. To the latter, Minnesota lags behind the nation, ranked 25th for hybrid car registrations (2007-2009) and has low levels of electric vehicle adoption.
On the other hand, Minnesota drivers are traveling less. VMT decreased by 4.3 percent in 2005-2011. By comparison, VMT increased by over 12 percent in North Dakota and decreased by the same amount in Wisconsin. Iowa saw a slight reduction as well while South Dakota’s VMT stayed nearly flat.
So what does this all mean? Energy and transportation are and will continue to be the largest source of anthropogenic greenhouse gas emissions in the U.S. if current trends hold. Even with current state intervention to promote renewable and clean energy generation, the U.S. will generate one sixth of its electricity renewably and continue to depend on fossil fuels even if coal plants are retired faster than anticipated. Without rapid adoption of alternative fuel vehicles and the supporting infrastructure, emissions reduction will have to be achieved by substantially altering peoples’ travel behavior.
In otherwords, business as usual sets us up to continue down an unsustainable path. Despite the bleak picture this paints for climate change, the good news is that there is so much improvement to seek that there are a large range of options for policymakers. But the current reality of our energy system and projections into the future are clear: policymakers need to take advantage of these options and step up to do more, moving away from small nudges toward renewable energy to creating a fundamental shift in our energy use and generation as well as transportation habits to substantially reduce emissions.