Electricity Demand and Carbon Emissions No Longer Interconnected

By Vicky Harris, Vice President Marketing on May 28, 2019
Vicky Harris
Home  / Blog  /  Electricity Demand and Carbon Emissions No Longer Interconnected

Carbon emissions from electric power production are finally lagging behind the growth in demand for electricity. This “silent” milestone, achieved over the past few years, marks the dawn of an era of sustainable economic growth. The main factor contributing to the decoupling of emissions and demand for power is the widespread adoption of renewables by utilities everywhere, and their incorporation into the edge of the grid as consumers install solar and wind at their homes and businesses.

The day is fast approaching when the lights of entire megacities will produce zero carbon emissions, like those of this small village in Norway.

Separating growth in power generation from growth in CO2 emissions is significant because global electricity demand is expected to grow by more than 50% by 2050. While heading in the right direction, we still have a long way to go to grow our global economy sustainably. It is important to note that as demand for electricity increases, there will naturally be more emissions. However, the increase is no longer linear: electricity consumption will grow more than emissions. This gap will continue to widen as the economic case of renewables make them more attractive than fossil fuels. As we wrote earlier this year (read post here), the cost of producing coal has surpassed that of renewables, without accounting for any subsidies. Coal, which has historically been the most widely used fossil fuel to generate electricity, no longer makes economic sense over clean alternatives―pointing us toward a future where more electricity will not mean more greenhouse gasses.

Decoupling Carbon Emissions and Growth

Limiting economic growth is never an attractive alternative to fight greenhouse gas emissions. Happily, that trade-off is no longer necessary. Advances in sustainable technology economics including those of solar, wind, and hydrogen are resulting in the widespread adoption of cheaper clean energy by utilities around the world. As these renewables replace more expensive fossil fuel options, generating ever more electricity comes at a lower environmental price.

A recent article by the International Energy Agency (IEA) sheds light on the pace of electricity generation and CO2 emissions worldwide. Specifically, they analyze the rate of growth in the production of power and its resulting carbon emissions over the past three decades. The IEA finds, “In recent years, further decreases in carbon intensity for the largest economies, driven by rapid cost reductions of solar PV and wind together with strong policy support from governments, contributed to a reduction in global carbon intensity―despite the persistence of coal-fired power generation.” They go on to explain the trends behind the decoupling of emissions and demand growth for electricity, which range from changes in efficiency to the adoption of renewables, and fast-growing China deciding to curb its emissions:

“This reduced carbon intensity of power generation, and the implied decoupling, was driven by a series of trends: improvements in power plant efficiency in many regions; switching away from fossil fuels; and greater penetration of low-carbon sources among major electricity producers. Although these trends have been underway in some regions for years, it was only when China began to also improve in terms of these three factors that global emissions began to flatten despite continued growth in electricity demand.”

The IEA points out that these underlying structural changes make the decoupling of growth from CO2 emissions a trend that is poised to continue and even accelerate as the economics for renewables get even better.

Decoupling Power and CO2 Emissions in the United States

Globally, electric power generation accounts for around 25% of total greenhouse gas emissions. As electricity demand rises due to increasing economic wealth (especially in countries which had ample room to grow when it comes to their electric grids), adopting renewables becomes imperative to reach the world’s target goals for emissions in the coming years. This imperative also applies to the U.S. (which ranks number two, behind China, for CO2 emissions), where according to a Forbes article, CO2 emissions grew by 2.5% last year alone.

Forbes analyzes the reasons for the growth in emissions in the U.S. in 2018, despite our country’s rapid decarbonization, mainly driven at the local level by cities and states. They shed light on the situation as follows: “New research finds the United States’ energy mix is rapidly decarbonizing largely due to economics, as coal-fired generation keeps retiring in favor of cheaper clean energy additions, but U.S. greenhouse gas (GHG) emissions still rose 2.5% in 2018. Although that may seem counterintuitive, economic growth and extreme weather increased energy demand, despite power sector decarbonization.”

They also cite the figures behind decarbonization in the electricity sector over the last decade: “Electricity generation from coal has declined from 44% to 27%, while the share of renewables has grown from 11% to 18%.” These figures, while encouraging, must continue on this trajectory if the U.S. electricity sector is to become truly sustainable.

Sustainable Growth Ahead

The IEA cautions, “The majority of countries still rely on an electricity mix that is far from decarbonized,” with most relying heavily on power coming from coal. As noted earlier, the economics of coal is rapidly making it an expensive option. Hopefully, the bottleneck in renewables (namely their variability) that still make coal viable in many parts of the world, despite its negative environmental and health impact, will be solved soon through the incorporation of clean energy sources like hydrogen and further innovation in battery storage. Everything is pointing in the right direction; we must now accelerate the pace.


Photo courtesy of Christopher Michel.
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