Medium-term Outlook for US power: 2015 Could Equate to Deepest de-Carbonization Ever

In 2015, the US could set new national records for annual renewable build, coal retirements, and gas burn from the power sector. Meanwhile, continues a research note published by Bloomberg New Energy Finance,electricity-related emissions could fall to their lowest levels since 1994. 

The research note examines short-term forecasts for US power.Renewable build will total 18.3GW in 2015 – 9.1GW from solar (an all-time high); 8.9GW from wind (third-most ever). Both technologies are in the midst of a temporary build rush, as developers race to capture important federal tax incentives that are set to step down or expire by 2017. California will account for over half of the solar build in 2015; Electrical Reliability Council of Texas will absorb over one third of the new wind.

• The Mercury and Air Toxics Standard (MATS) take effect on April 2015, hastening a wave

of coal retirements among generators whose economics are otherwise challenged by the

effects of old age and cheap gas. In all, expect 23GW to stop burning coal this year, with

another 30GW falling offline before decade-end. 

• Natural gas-fired generators are poised to back-fill lost generation from retiring coal; and even

more importantly, plummeting gas prices have enabled efficient, combined-cycle gas turbines

to undercut marginal costs of coal in many parts of the country. Coal-to-gas switch calculus is

complex, but we believe these two factors (lost coal capacity and a relative improvement in

gas-fired economics) will lead to the most gas burn from the power sector ever – more even

than witnessed in 2012 (‘the year of no winter,” when Henry Hub sank below $3/MMBtu).

To read the full BNEF White Paper click here.