In the eyes of President Obama, there’s little doubt about it: Climate change is happening and we have a moral obligation to stop it. With electricity output as the primary greenhouse gas polluter, will the president’s new policy pave the way for environmental electricity – or will it put us all in the dark? Here’s what you need to know.
Electricity production accounted for 33% of all greenhouse gas emissions in 2011. That’s higher than both transportation’s 28% and industry’s 20% piece of the pollution pie.
When considering utilities (and power plants, specifically), the numbers look even more negative. Power plants account for 40% of all domestic greenhouse gas pollution, despite significant emissions reductions.
In a response letter to the president, the Edison Electric Institute noted that utilities have “been a leader in reducing criteria pollutants and greenhouse gas (GHG) emissions over the last two decades.” Power sector carbon dioxide emissions are 15% below 2005 levels, and sulfur dioxide and nitrogen oxide levels are just 25% of their 1990 levels.
But that’s not enough. President Obama is issuing a “Presidential Memorandum directing the Environmental Protection Agency to work expeditiously to complete carbon pollution standards for both new and existing power plants.”
The POTUS’ plan remains light on details, but there are three main conclusions to be drawn from his newest initiative.
1. Existing power plants aren’t protected
The biggest news for the utilities sector came from the inclusion of one word: existing. The Edison Electric Institute made special mention of this in its response statement, noting that new policies and regulations should be “achievable” and “consistent with ongoing investments to transition.” EEI might’ve been describing any number of transitioning traditional fuel utilities. TECO Energy, Inc. (NYSE:TE) currently relies on coal for 61% of its regulated generation capacity, and also owns and operates coal mines capable of processing nine million tons annually. Just last month, TECO Energy, Inc. (NYSE:TE) announced that it is spending $950 million to acquire a New Mexico regulated natural gas utility – but its moves may not be fast enough if Obama gets anxious.
2. Renewables are ramping up
Wind and solar generation more than doubled during the president’s first term, and it doesn’t look to be letting up anytime soon. recently celebrated its 10,000 net MW of wind power, but it could be in the market for much more with new goals to accelerate clean energy permitting. In addition to a recent production tax credit extension, the president has set a goal to issue another 10,000 MW in renewables permits on public land by the end of the year.