Greenhouse Gas Emissions May Boost Smart Grid Investments in the US

The smart grid will be a critical tool for the US as it aims to cut emissions.
Published: Wed 21 May 2014

The Obama administration’s plan to cut greenhouse gas emissions from power plants may boost smart grid investments.

Plans to reduce carbon emissions

The administration may ask that power plants cut emissions by as much as 25%. The Harvard Environmental Policy Center believes that this goal is attainable since without any rules in place, power plant emissions dropped by 16% from 2005 to 2012 due to the recession and an increase in the consumption of natural gas.

The full mandate may be phased in over 15 years-an attempt to soften the blow on utilities. The cuts will run over two phases. In the five years starting in 2019, only limited reductions at the plants would be mandated. Deeper cuts would required from 2024 to 2029 to reach the end goal of 25%

Currently, power plants in the US account for about 40% of the 2.2 billion tons of carbon dioxide released in the country every year. The rules, which are scheduled to be released by the Environmental Protection Agency on June 2, are eagerly anticipated by environmental groups which are pressing the President to reduce the risks of climate change.

The US President, Barack Obama, has prioritized climate change and intends to make the rules on carbon-dioxide emissions the backbone of US action on global warming for years to come. President Obama may even unveil the power plant rules himself.

The rules are expected to attract extreme resistance from coal companies and their allies in Congress who warn of escalated electricity prices and unemployment.

A final decision has yet to be made with regards to the emissions goal and already there are questions surrounding the legality of it all. Industry leaders are asking whether the administration has such powers under the Clean Air Act. They say the law does not allow the government to regulate "beyond a plant's smokestack

Energy efficiency-the cheapest way to reduce emissions

While many in the industry consider this to be a steep and perhaps unattainable reduction, the target could be met if power plant owners expand renewable energy, improving grid efficiency or encourage customers to use less power.

Steven Nadel, the executive director of the American Council for an Energy-Efficient Economy (ACEEE) points out that improving the country’s energy efficiency is the cheapest way to cut down on greenhouse gas emissions. He adds that consumers are already saving billions of dollars and creating jobs by slashing their energy consumption while also reducing carbon dioxide emissions produced from burning fossil fuels. He explains, “We know from studies across the country that we could be saving much more. So it’s important that the Environmental Protection Agency designs its rules on greenhouse gas emissions from existing power plants in a way that encourages and uses energy efficiency by consumers as a compliance strategy, not just actions at the power plants.”

Further Reading

Bloomberg-Obama Said to Consider Power-Plant Rule That Tests Law

Global Smart Grid Federation-Energy Efficiency Must Be A Key Emissions Reduction Strategy