A "clean energy standard" as drafted by a leading US senator to boost low-emission generation while decreasing coal-fired power would not impose significant impacts on electricity prices until after 2020, according to an analysis released Wednesday by the US Energy Information Administration.
On average, the projected end-use electricity price under the CES would exceed EIA's Annual Energy Outlook 2012 reference case by less than 4% in 2025 but by as much as 18% by 2035, EIA said.
Price increases would occur post-2020 when compliance with the CES "becomes less a matter of using natural gas and biomass at existing facilities, and more a matter of requiring investment in new combined-cycle, renewable, and nuclear capacity," the analysis said.
If enacted, the CES would decrease coal-fired generation below the EIA reference case by 25% in 2025 and by 54% in 2035 while boosting natural gas-fired electricity by 13% in 2020. But by 2035, natural gas generation would be up by only 8%, as other low-emission resources increase capacity under the standard, the analysis said.
EIA also projects the CES would cut greenhouse gas emissions from the power sector by 20% in 2025 and by 45% in 2035 and improve energy efficiency with 21% more combined heat and power deployed in 2035.
The analysis was done at the request of Senate Energy and Natural Resources Committee Chairman Jeff Bingaman, a Democrat from New Mexico who has pushed unsuccessfully to get a national renewable energy standard through Congress for years.
Bingaman's latest CES bill, S 2146, sets a 24% target for retail electricity sales from low-emission sources beginning in 2015 that escalates to 84% by 2035. Electricity retailers that sell less than 2 million MWhs in 2015 would be exempt.
The CES would provide full credits to new wind, solar, biomass, geothermal, municipal solid waste and landfill gas. It also would fully accredit nuclear and hydroelectric power placed in service after 1991 but nuclear and hydro capacity operating before 1992 would not receive any credits. Alternative compliance credits would also be available beginning at 3 cents/kWh in 2015 and increasing in price by 5% each year. These credits could be banked or sold to other sources to help them meet the CES.
The committee will hold a hearing on the bill May 17.
