Power sector in 2030
Our analysis of Paris Agreement compatible pathways demonstrates that the US power sector could be fully decarbonised by 2036. This could be achieved through the phase-out of coal and gas by 2029 and 2038–2039, respectively, and a high uptake of renewable energy (including variable renewables, hydro and biomass) in the power mix to reach a share of 77–93% by 2030.
The Inflation Reduction Act (IRA), passed in August 2022, includes significant support for renewable energy and storage technologies, largely through tax credits. One assessment found that the IRA could double the 2020 pace of wind capacity additions by 2025. For solar, the pace increase could be fivefold. Overall, the IRA is expected to speed up power sector emissions reductions: from previously expected 54–66% to 69–80% below 2005 levels by 2030.9
While the US currently does not have a federal renewable energy target, thirty states, Washington, D.C., and three territories have adopted renewable portfolio standards (RPS), and seven states and one territory have set renewable energy goals.10 One study has attributed about half of all growth in the US renewable generation and capacity since 2000 to state RPS requirements.11 While this mechanism fosters the development of renewable energies, more stringent policies will need to be put in place to comply with the steep uptake required by 2030 to be Paris Agreement compatible.
Towards a fully decarbonised power sector
1.5°C compatible pathways show that the sector could contribute to negative emissions up to -80 gCO₂/kWh by 2050. This will be driven by the phase-out of fossil fuels and uptake of renewables, reaching 98–100% of the power mix by 2050.
President Biden’s proposed clean energy target of a “carbon-free” power sector by 2035 would be in line with the 1.5°C compatible scenarios. However, there are currently no national targets to phase out fossil fuels in the US and initial analyses find that the Inflation Reduction Act is not likely to put the US on track to decarbonise the power sector by 2035.12
1 The United States of America. The United States of America – Nationally Determined Contribution. 2021.
2 Climate Action Tracker & New Climate Institute. USA | Climate Action Tracker. 2022.
3 Rep. Yarmuth, J. A. H.R.5376 – Inflation Reduction Act of 2022. (117th Congress, 2022).
4 Climate Action Tracker. To show climate leadership, US 2030 target should be at least 57-63% – Mar 2021. (2021).
5 U.S. Department of State. The Long-Term Strategy of the United States: Pathways to Net-Zero Greenhouse Gas Emissions by 2050. 2021.
6 Shepardson, D. U.S. aims for zero-emissions heavy-duty vehicles by 2040. Reuters. 2022.
7 The White House. Executive Order on Strengthening American Leadership in Clean Cars and Trucks. The White House. 2021.
8 Biden for President. The Biden plan to build a modern, sustainable infrastructure and an equitable clean energy future. (2020).
9 Larsen, J. et al. A Turning Point for US Climate Progress: Assessing the Climate and Clean Energy Provisions in the Inflation Reduction Act. 2022.
10 NCSL. State Renewable Portfolio Standards and Goals. NCSL. 2021.
11 Barbose, G. L. U.S. Renewables Portfolio Standards 2021 Status Update: Early Release. 2021.
12 Denholm, P. et al. Examining Supply-Side Options to Achieve 100% Clean Electricity by 2035. 2022.
13 ICAP. Welcome to the ICAP ETS Map. International Carbon Action Partnership. 2022.
14 Cui, H. & Hall, D. Annual update on the global transition to electric vehicles: 2021. ICCT. Preprint at theicct.org/wp-content/uploads/2022/06/global-ev-update-2021-jun22.pdf (2022).
15 E360. U.S. Inflation Reduction Act to Boost EV Adoption by 20 Percent, Analysis Finds. Yale Environment 360. 2022.
16 Wilson, K. Advocates: Cutting High Speed Rail Out of Climate Bill Was a Mistake. Streetsblog USA. 2022.
17 While global cost-effective pathways assessed by the IPCC Special Report 1.5°C provide useful guidance for an upper-limit of emissions trajectories for developed countries, they underestimate the feasible space for such countries to reach net zero earlier. The current generation of models tend to depend strongly on land-use sinks outside of currently developed countries and include fossil fuel use well beyond the time at which these could be phased out, compared to what is understood from bottom-up approaches. The scientific teams which provide these global pathways constantly improve the technologies represented in their models – and novel CDR technologies are now being included in new studies focused on deep mitigation scenarios meeting the Paris Agreement. A wide assessment database of these new scenarios is not yet available; thus, we rely on available scenarios which focus particularly on BECCS as a net-negative emission technology. Accordingly, we do not yet consider land-sector emissions (LULUCF) and other CDR approaches which developed countries will need to implement in order to counterbalance their remaining emissions and reach net zero GHG are not considered here due to data availability.
18 In some of the analysed pathways, the energy sector assumes already a certain amount of carbon dioxide removal technologies, in this case bioenergy carbon capture and storage (BECCS).
The United Statesʼ power mix
terawatt-hour per year
- Renewables incl. biomass
- Unabated fossil
- Nuclear and/or fossil with CCS
- Negative emissions technologies via BECCS
The United Statesʼ power sector emissions and carbon intensity
MtCO₂/yr
- Historical emissions
- High energy demand - Low CDR reliance
- SSP1 Low CDR reliance
- SSP1 High CDR reliance
- 100%RE
- Low energy demand
1.5°C compatible power sector benchmarks
Carbon intensity, renewable generation share, and fossil fuel generation share from illustrative 1.5°C pathways for The United States
Indicator | 2019 | 2030 | 2040 | 2050 | Decarbonised power sector by |
|---|---|---|---|---|---|
Carbon intensity of power gCO₂/kWh | 380 | 30 to 50 | −130 to 0 | −80 to 0 | 2036 |
Relative to reference year in % | −92 to −88% | −134 to −100% | −120 to −100% |
Indicator | 2019 | 2030 | 2040 | 2050 | Year of phase-out |
|---|---|---|---|---|---|
Share of unabated coal Percent | 25 | 0 | 0 | 0 | 2029 |
Share of unabated gas Percent | 38 | 4 to 13 | 0 | 0 | 2038 to 2039 |
Share of renewable energy Percent | 18 | 77 to 93 | 96 to 100 | 98 to 100 | |
Share of unabated fossil fuel Percent | 63 | 6 to 13 | 0 | 0 |
Investments
Demand shifting towards the power sector
The 1.5°C compatible pathways analysed here tend to show a strong increase in power generation and installed capacities across time compared with a current policy scenario. This is because end-use sectors (such as transport, buildings or industry) are increasingly electrified under 1.5°C compatible pathways, shifting energy demand to the power sector. Globally, the “high energy demand” entails a particularly high degree of renewable energy-based electrification across the various sectors, and sees a considerable increase in renewable energy capacities over time. See the power section for capacities deployment under the various models.
The United Statesʼ renewable electricity investments
Billion USD / yr
Yearly investment requirements in renewable energy
Across the set of 1.5°C pathways that we have analysed, annual investments in renewable energy excluding BECCS increase in USA to be on the order of USD 50 to 284 billion by 2030 and 54 to 303 billion by 2040 depending on the scenario considered. The ‘high energy demand, low CDR reliance’ pathway shows a particularly high increase in renewable capacity investments, which could be driven by an increase of electrification of end-use sectors and growing energy demand. Other modelled pathways have relatively lower investments in renewables and rely to varying degrees on other technologies and measures such as energy efficiency and negative emissions technologies, of which the later can require high up-front investments.