2015 should prove to be a watershed year for the “de-carbonization” of the US power sector, with record volumes of coal-fired capacity to be shuttered, renewables capacity to be built, and natural gas to be consumed. The result: CO2 emissions from the power sector should drop to their lowest level since 1994.
Three factors will combine to make 2015 one for the record books according to new BNEF research and forecasts:
In 2015, the US will install more renewables than ever before, with 18 new gigawatts (GW) coming online. BNEF forecasts new solar installations to reach an all-time annual high of 9.1GW in 2015 – with half of that built in California. Wind build should total 8.9GW (third-most all-time) with a third of that coming in Texas.
It will be a record year for coal retirements in the US with 23GW forecast to come offline. That represents no less than 7% of all current US coal capacity. A confluence of factors is driving the change, including lower priced natural gas, new standards on mercury emissions, and the old age of many coal-fired units.
The power sector will burn more natural gas in 2015 than ever before – more even than in 2012, “the year of no winter”, when Henry Hub prices fell consistently below $3/MMBtu. Gas burn will rise to back-fill lost generation from retiring coal; but also, remarkably low gas prices have boosted burn totals by allowing efficient gas turbines to undercut the cost of coal-fired electricity.
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