Electricity Sector

In the United States, electricity is the sector with the second highest greenhouse gas (GHG) emissions, emitting 27 percent of U.S. GHG emissions. In addition to being a major source of emissions that need to be reduced, a substantial body of analysis indicates a key pathway to economy-wide deep decarbonization likely involves decarbonizing electricity and electrifying other sectors so they can use that decarbonized electricity.  This is the case because decarbonizing electricity is likely less difficult than decarbonizing other sectors such as transportation, industry, and heating.

What Makes the Electricity Sector Different in Terms of Reducing Carbon Emissions?

The United States currently uses a mix of energy sources to generate electricity:  38 percent natural gas, 24 percent coal, 20 percent nuclear power, 7 percent hydropower, 7 percent wind, 2 percent solar, and small amounts of biomass and geothermal.

U.S. electric sector emissions are about 15 percent lower in 2018 than they were in 2005. This decline has been achieved through a shift away from higher-emitting coal power, which used to comprise the largest share of the U.S. generation mix, to lower-emitting natural gas and zero-emitting nuclear and renewable power.   Energy efficiency improvements in buildings, where almost all U.S. electricity is used, have also played an important role in constraining U.S. electricity demand growth.

Going forward, to achieve deep decarbonization, the electricity generation mix must shift further to zero or net-zero carbon-emitting sources, including renewables (hydro, solar and wind), nuclear energy, and fossil fuels with carbon capture and storage.  The challenge is to achieve a power sector that is clean as well as affordable and reliable. Bringing down the cost of zero-emitting technologies is critical.  Making the power system more flexible is key to maintaining reliability, especially in the face of increasing amounts of variable solar and wind on the grid.   Flexibility solutions include energy storage, demand response, and “ramping” capability (the ability of generators to increase and decrease power output in response to grid conditions).  Buildings efficiency likely needs to continue to improve.  And electricity demand likely will need to grow to meet the electrification needs of other sectors as they decarbonize.

Electricity emissions depend on the interplay of technology innovation, market forces, human behavior and public policy, and public policy happens at the federal, state and local level.  Key electricity policy options include clean electricity standards; equipment and appliance efficiency standards; and increasing technology innovation and investment in advanced electricity generation, energy storage, and buildings efficiency options.