• Decarbonization
  • Policy Regulation
  • Greenhouse Gas Emissions
  • Clean Power Plan

Federal Carbon Regulation Likely Dissolves, but Some States Fill the Void

Maggie Shober
Jan 13, 2017

Cyber Security Monitoring

A version of this article was originally published on Energy Central.

After months of litigation, a decision by the DC Circuit Court on the future of the Clean Power Plan (CPP) is expected to be announced early this year. Congressional Republicans and incoming president Donald Trump were both critical of the CPP on the campaign trail during the 2016 election, so the outlook for the CPP is bleak. The demise of the plan seems likely, though it will not be quick, however, as states that support the rule have promised to fight to protect it. New York, California, and other states are stepping up to fill the CPP’s void and continue to work toward decarbonization.

States Stepping Up

Continued progress is expected in greenhouse gas emissions reductions in New York as the state has implemented the Clean Energy Standard (CES), Reforming the Energy Vision (REV), and other emissions-related initiatives. The CES targets the use of renewables for 50% of electricity consumption by 2030. Navigant’s 2017 outlook for New York shows significant increases in energy efficiency, wind, and solar over previous cases without the CES. Some of these additions are already happening around the state, and growth is expected to continue through at least 2030. Additional initiatives at the state level that put an emphasis on distributed energy lead us to forecast that nearly half of all the solar capacity added in the state through 2040 will be distributed solar. New York is a member of the Northeast’s Regional Greenhouse Gas Initiative (RGGI) along with states from New England and PJM. As New York increases its deployment of energy efficiency and renewables, CO prices on the RGGI market will be driven down and other states in the market will be affected. This would also otherwise affect energy efficiency and renewable development in other RGGI states, except that these are mostly driven by other state imperatives.

California has also been a leader in decarbonization efforts for many years, and it is not expected that leadership from California will taper off anytime soon. California’s cap-and-trade market for CO is linked to Quebec, with plans to link with other Canadian provinces in the near future. The state is also on track to meet its aggressive Renewable Portfolio Standard (RPS) targets of 33% by 2020 and 50% by 2030.

Higher Emissions

Even though state policies are expected to continue to push the grid toward decarbonization, without a federal regulation on carbon, overall emissions from the industry will be higher. Without the CPP in place, MISO and other areas are expected to see less coal capacity retire. However, the economics of some older coal plants and even a few nuclear plants make it unlikely they will continue to operate through 2040.

Uncertainty in the industry will likely continue, and can make planning for the future difficult, particularly in a sector where planning is so important and highly regulated. Navigant’s 2017 Integrated Energy Market Outlook and Industry Trends webinar on January 25 will analyze how fundamental policy shifts are expected to impact coal retirements, energy, capacity, and prices as well as the potential impacts regarding supply and transmission expansion for gas and power over the next 25 years.