Wind Energy FAQs: GHG Emissions and Power Prices

Greenhouse Gas emissions and Power Prices (2005-2019)

One of the objections frequently raised, in opposition to efforts to reduce greenhouse gas (GHG) emissions from the power sector, is that it will place a significant burden on electricity users in the form of increased prices. In this post we demonstrate otherwise by reference to actual power sector emissions vs. the Clean Power Plan targets.

The Clean Power Plan (CPP) was a policy of the previous administration which aimed to reduce carbon dioxide emissions from electrical power generation by 32% by 2030, relative to 2005 levels. The final version of the plan was unveiled by President Obama in August 2015. However in March 2017, President Trump signed an executive order mandating a review of the plan and EPA replaced it with the Affordable Clean Energy rule in June 2019.
One of the major criticisms leveled at the CPP, by its detractors, is the supposed cost associated with its implementation.

To check this, it is necessary to consider how power sector emissions, and power prices, have changed over the last few years. First, the emissions..

Carbon emissions. The Energy Information Administration publishes monthly data on carbon emissions from the power generation sector and we show them in the following graph, for the period from 2000 to the present day.

The chart shows that annual power sector GHGs fell from 2,552 million tonnes – at their March 2008 all-time peak – to a low of 1,802 million tonnes at the end of August 2019: a 29.4% decrease.

So what happened to electricity prices over the same period?

Power prices.   The Energy Information Administration also publishes monthly data on national electricity prices. To ensure comparability, we inflation-adjusted all prices to November 2017 using CPI information from the Bureau of Labor Statistics, and include the chart as follows;

It demonstrates that over the period since 2005, inflation-adjusted electricity prices have been remarkably stable fluctuating from a low of 9.57 c/KWh in January 2005 to a high of 12.03 c/KWh in July 2008 and thereafter remaining largely unchanged from 2012 to the present day.

And from this data, it is reasonably clear that reducing power-system GHGs (and increasing the use of wind and solar) has not resulted in any significant change in electricity prices.