Back in April, the federal government's energy research arm released a troubling report for anyone watching carbon emissions from the U.S. power sector.

Even if renewables growth rates outpace the most optimistic projections, Utility Dive reported at the time, the U.S. grid in 2040 would still be dominated by fossil fuels if more regulatory action isn't taken to curb greenhouse gas pollution. 

The crux of that argument came from data compiled in the Energy Information Administration's (EIA) Annual Energy Outlook, a yearly snapshot of the U.S. energy system. That report predicted that without new carbon regulations, the U.S. would still have an electricity system in 2040 based largely on coal and natural gas: 

Those estimates, of course, came with a big caveat — the EPA’s proposed Clean Power Plan (CPP), which aims to cut carbon emissions 30% below 2005 levels by 2030. The EIA didn’t take those proposed regulations into account in its original AEO for 2015, providing an opportunity to see what the grid would look like if the CPP is never implemented. But the agency did promise revised estimates that take into account expected impacts of the new regulations.

In late May, EIA made good on that pledge, releasing a lengthy report outlining scenarios for anticipated carbon cuts, plant retirements and renewable energy growth. While no one can be absolutely sure of what the Clean Power Plan will eventually hold — the final version is expected in August — the EIA’s paper amounts to the most detailed independent assessment of the plan’s expected impacts to date.

How will the sweeping carbon regulations transform the fuel mix, and will the changes be enough to make meaningful progress toward averting the worst consequences of climate change? We dove in to find out. 

Emissions cuts under the Clean Power Plan

The EIA’s projections for carbon reductions estimate that the plan, as it is proposed, will likely realize Obama's stated goal of cutting U.S. CO2 emissions 30% from 2005 levels by 2030.

"The projected power sector emissions level in 2030 ranges from 1,553 to 1,727 million metric tons across the cases, reflecting a reduction of between 29% and 36% relative to the 2005 emissions level of 2,416 million metric tons," the report reads.

Just how steep the emissions cuts are will depend on a number of issues outside of the plan’s parameters. EIA modeled five scenarios using the baseline economic situation that it used in the original Annual Energy Outlook, and four more using alternative baselines. (Each of the study scenarios is explained in brief and noted in parentheticals throughout the piece, but for a full explanation, click here.)

In the baseline case with the Clean Power Plan added (labeled CPP on the graph below), CO2 emissions drop by nearly 600 million metric tons from what EIA expects they would be without the regulations. If the Clean Power Plan’s goals are extended beyond 2030 to reduce carbon emissions from the power sector 45% by 2040 (CPPEXT on the graph), the emissions cuts are more significant and accelerate to 2040.

In the scenario where EPA counts new nuclear capacity in compliance calculations (CCPNUC), emissions cuts don’t vary much from the baseline CPP case. But if there is high economic growth (CPPHEG) or if domestic gas and oil production accelerates, lowering the prices of those fuels (CPPHOGR), the emissions cuts are less significant.

For context, EIA also modeled the expected emissions reductions through 2040 in line graphs. (In the graph on the right, the labels that begin with "AEO" are measuring expectations from the original Annual Energy Outlook, so they do not include the Clean Power Plan. For instance, "AEOHOGR" denotes the expected emissions under a scenario with increased oil and gas production, but without the Clean Power Plan. AEOHEG, similarly, denotes a high economic growth scenario without the CPP.)

Here’s how that compares to 2005 emissions levels, in a variety of scenarios:

How the fuel mix will change

Getting to those greenhouse gas emission cuts will be no easy task, the report finds. In addition to the 40 GW of coal plant retirements EIA expects in its AEO reference case (without the Clean Power Plan), the agency estimates in its baseline CPP case that 50 GW of additional coal capacity will retire, most of it going offline before 2020. That means that in all, the U.S. is likely looking at about 90 GW of coal retirements, with most coming in the next five years.

How will the grid compensate that retiring generation? According to EIA, utilities will increase natural gas generation first, with reneawbles growth taking over to make up for retirements later in the compliance period. Here is what EIA predicts in its CPP baseline case:

But just how much renewables, nuclear, and gas will mix to make up for the coming coal retirements will depend on a number of variables, including economic factors and whether the CPP goals are extended to 2040. Here are EIA’s models for cumulative capacity additions by scenario in gigawatts:

As you can see in the graph, much of the expected growth in renewables depends on which scenario EIA modeled. If the Clean Power Plan goals are extended to 2040, EIA expects about 250 GW of wind and solar to be added (CPPEXT). But, if they aren’t extended and domestic production of oil and gas increases markedly (CPPHOGR), renewables additions amount to around 75 GW instead.

To be sure, EIA has underestimated renewable energy growth rates in the past, but even if they are lowballing those rates in each scenario, their estimates establish a baseline to compare expected impacts of energy policies and economic conditions. And while growth estimates vary, what's significant about the EIA projections is the point that the overall economic situation and policy decisions around domestic fossil fuel extraction and greenhouse gas goals could have huge consequences for reneawbles growth.

Here’s how EIA models wind energy growth through 2040. Notice how the high oil and gas scenario (CPPHOGR), which assumes enhanced domestic fossil fuel production, compares to the one where CPP goals are extended to 2040 (CPPEXT).

The differences between scenarios are even more pronounced for solar growth expectations, although they depend more on economic growth rates than the other energy sources. Other than the overall economy, EIA predicts that counting nuclear for CPP compliance (CPPNUC) or increasing domestic oil and gas production (CPPHOGR) would significantly hamper solar growth.

As might be expected, much of the opposite is true for expected growth rates of natural gas-fired generation. If domestic oil and gas production increases under the scenario CPPHOGR, it results in a boom in gas-fired generation while renewables sputter along. But in the high economic growth scenario, gas takes a hit beginning in 2030.

All those data on expected retirements and capacity additions are tough to swallow in one gulp, but EIA also modeled capacity additions in five scenarios against expected retirements, showing a slate of possible options dramatic shift coming in the U.S. fuel mix in one chart:

Is the Clean Power Plan enough?

What the EIA data should show first is that even if the Clean Power Plan is implemented fully as proposed, there are hugely consequential policy decisions in the future that will help shape the fuel mix. That is especially true about determining the level of domestic oil and gas production — which would affect renewables growth — and the potential extension of CPP targets.

But beyond that immediate lesson, the report should also demonstrate the huge impact regulations like the Clean Power Plan can have on both carbon emissions and a nation’s fuel mix. But are the proposed EPA rules, as controversial and maligned as they are, aggressive enough to help the larger goal of staving off the worst consequences?

The short answer is that it’s complicated. Any emissions control scheme from any one country — no matter how big — cannot by itself dramatically change the equation on climate change. Greenhouse gas emissions are a global phenomenon that requires international cooperation and coordination to address. At least on that point, everyone basically agrees.

But many environmentalists, while largely supporting the plan, say that the world’s largest economy should be cutting emissions faster. Because poor nations, as they industrialize, will likely continue to increase emissions at least in the short term, many argue that richer ones should redouble efforts to cut carbon pollution. This, they say, shows poorer nations that decarbonization will be a global effort, and they won't get stuck with painful carbon cuts while rich nations continue to pollute.

A recent study in the journal Energy Policy comes to that conclusion as well. After taking a closer look at recent adjustments to developing nation pollution numbers submitted to the UN Intergovernmental Panel on Climate Change (IPCC), a group of Dutch researchers concluded that rich nations must reduce greenhouse gas emissions 50% below 1990 levels by 2020. That level of decarbonization, they say, provides a good chance of limiting warming to 2 degrees Celsius, the level that most scientists agree is necessary to escape the most severe climate consequences.

Of course, that study is just one of many on how much carbon reduction is optimal, but even more conservative estimates show there’s still plenty of ground to make up if the goal is keeping global warming under 2 degrees.

The most recent report from the IPCC, compiled by a coalition of the world’s leading climate scientists, found that developed nations would have to reduce emissions between 25% and 40% below 1990 levels by 2020. The Clean Power Plan, which EIA expects to cut emissions 25% from 2005 levels by 2020 (see table 5 above), gets the American economy close to the lower end of the IPCC’s target, but it’s measured from the 2005 baseline rather than the IPCC’s 1990 date, when American emissions were lower.

Across the globe, no major national emissions reduction plan is currently on track to meet the IPCC’s 2020 goals, the World Resources Institute (WRI) reports. In fact, the think tank wrote in a blog post, the UN Emissions Gap Report found that the space between current global emissions pledges and what’s needed to limit warming to 2 degrees centigrade is between 8 and 13 gigatonnes of CO2 equivalent. For context, the entire U.S. power sector emitted 2.053 gigatonnes of CO2 in 2013.

Because of that gap and the IPCC's emissions targets, many climate analysts say that while the Clean Power Plan is a significant step toward decarbonization, it doesn’t go far enough if the goal is to play a meaningful leadership role in keeping warming below 2 degrees centigrade.

"The Clean Power Plan is a really critical step, and it’s not enough," Rachel Cleetus, lead economist and climate policy manager at the Union of Concerned Scientists, said.

But while the plan, as its proposed, isn't sufficient for the U.S. to meet the IPCC’s target, Cleetus told Utility Dive there are other reasons for hope. In particular, the fact that the United States is taking meaningful action to reduce carbon emissions could act as a catalyst for other nations to do the same, potentially digging into that 8-13 gigaton gap between expected emissions and the UN’s targets.

In fact, she said, that’s already happened with the recent climate accord with China. Without the U.S. making a serious commitment to cut emissions through the Clean Power Plan, its highly unlikely that the Chinese would have entered into an agreement to peak its coal use by midcentury and boost renewable energy growth. She hopes that the progress already made between the world’s biggest emitters can be carried into the Paris climate talks later this year.

"This is all about building trust, and how you build trust in this environment is, 'Show me. Don’t just say it. Show me.' And that’s what the US is doing," Cleetus said. "With this Clean Power Plan they’re showing that they’re willing to take on the biggest chunk of the emissions."

But, she cautioned, even if the U.S. can establish an atmosphere of trust in the Paris climate talks, countries will need to be prepared to make more significant emissions cuts than any have before.

"There’s a clear sense that there will need to be more work coming out of Paris on getting those targets down," she said. "It’s the ratcheting down piece that needs to be built into the Paris agreement … and that's the part where the cooperation part is critical."

"It's not just about the number," Cleetus continued. "It’s about making sure that everybody is on board so that ratcheting does happen in an intentional way, in a transparent way, in a way where countries like the U.S. take responsibility and step up."

Could the grid handle more ambitious greenhouse gas goals?

For many in the electric power industry, talk of even deeper carbon cuts sounds daunting. Regulators and utilities in states reliant on coal power throughout the nation are already scrambling to figure out how to meet their state’s emissions goals while still ensuring reliable electric service.

Many states and companies have said they don’t think they are able to comply with the EPA emissions regulations as they are proposed — much less deeper and faster carbon cuts. They point to the need to build huge amounts of new power infrastructure, including natural gas plants, new pipelines and transmission lines, to make up for the 90 GW of expected coal retirements in the coming years.

Many of those worries were codified in a recent report from the North American Electric Reliability Corporation (NERC), the federal nonprofit charged with overseeing grid reliability. After modeling out projected generation changes under the regulations, the NERC analysts concluded that states need longer to comply with the plan than the EPA allows with its 2020 start date for compliance.

"We are not prescribing a specific date, but we do think 2020 is too soon for many states," NERC’s Director of Reliability Assessment John Moura told Utility Dive. "Only when the states start developing their plans and coordinating with other states will they know what they need to do and how long it will take. That might not be until 2023 or 2025. They need to take advantage of EPA’s flexibility to work those things out.”

In particular, NERC is concerned with the amount of time it takes to build new generation and transmission infrastructure. A new combined cycle gas plant, they figure, takes 5 years and 4 months to build from inception to powering up. A new 100 MW solar plant takes less, at 3 years and 1 month, but the real difficulty comes from transmission. A new rural 230 kV line is likely to take 7 years and 3 months to plan, develop, permit and build, and a bigger, 500 kV one with new rights of way is likely to take 15 years.

Those "physical limitations" on infrastructure construction mean the 2020 start date for compliance should be extended, NERC analysts said. Given that deeper CO2 reductions would likely beget more coal plant retirements, necessitating more buildout of new infrastructure, the NERC report seems to show that more ambitious carbon cuts could be unworkable for the grid.

But, as with every aspect of the Clean Power Plan, there are conflicting opinions and estimates. Many environmentalists and clean energy advocates say that NERC's analysis is based on faulty assumptions about efficiency, demand side management and renewables growth.

John Moore, head of the Sustainable FERC project at the Natural Resources Defense Council, is one such critic. He told Utility Dive that the whole study needs rethinking.

"I think that NERC put far too many eggs in the natural gas basket," he said. "If you look at the report it assumes very low efficiency and wind and solar development."

"I just object to a report that assumes we can only do 0.5% energy efficiency gains every year and only 2% or so renewable energy development a year when the actual numbers are far higher than that," Moore continued. "NERC simply erred in its assumptions around how much new clean energy we can develop. It just put too many eggs in the natural gas basket and then concluded we can’t build out quickly enough."

The huge caveat in all these assumptions is that the Clean Power Plan has not been finalized yet — something the EPA is slated to do in August. Depending on the changes, any and all of the predictions about the fuel mix, carbon reductions, and reliability impacts could change drastically.

But while senior EPA officials have said that states can expect some changes in the finalized rule, it’s generally seen as unlikely that it will significantly reduce the carbon cuts required by states. A much bigger threat to those stipulations is if the Clean Power Plan were to be struck down in court, or rescinded by a future president. As it stands, the Clean Power Plan appears to be on its way to the Supreme Court, and no GOP presidential candidate supports the plan.

Those issues, especially surrounding court challenges, could take years to work out, and the mandated carbon cuts could be pushed back beyond 2020 if the EPA sides with the industry and relaxes the compliance timetable. But, Cleetus warned, the world is running out of time to solve the problem, and any delays will ultimately mean deeper, faster cuts if the world is serious about staving off the worst climatic impacts.

"The challenge from the carbon budget perspective is that these years of global delay in getting started have meant that our budget is shrinking," she said. "There’s ever more urgency to make deeper cuts."