In designing the Clean Power Plan, the U.S. Environmental Protection Agency provided states with implementation flexibility. Given the options available to states, EIA has produced several scenarios as part of an Issues in Focus analysis in the Annual Energy Outlook 2016 (AEO2016). Differences in emissions target types, emissions trading markets, and policy timelines have implications for electric capacity and generation in the United States.
The Clean Power Plan (CPP) scenarios tend to result in more electricity generation from renewables—especially solar and wind—and (in most cases) natural gas over the next 25 years compared with projections without the CPP (No CPP case). In all cases, coal generation declines, and generation from other fuels such as nuclear or hydroelectricity are relatively unchanged. Power-sector carbon dioxide emissions are lower and retail electricity prices are higher compared with a case without the CPP.
In the Clean Power Plan Rate case, states comply with rate-based standards to limit the amount of CO2 collectively emitted per unit of electricity generation. The rate is calculated as the emissions from existing fossil units divided by generation from existing fossil units plus generation from new builds of zero-carbon technologies and incremental demand-side energy efficiency. Compared to the mass-based Reference case, renewable generation is higher while natural gas use is lower. The CPP Rate case allows some increase in coal generation in later years as long as there is sufficient zero-carbon generation to offset the increased emissions associated with coal generation.
Principal contributors: Laura Martin, Thad Huetteman