Obtain the data you need to make the most informed decisions by accessing our extensive portfolio of information, analytics, and expertise. Sign in to the product or service center of your choice.
Greenhouse gas emissions in the power sector are down 27% in the
United States and 36% in Canada since 2005. This transition has
been driven to a large extent by the abundance of low-cost natural
gas, coal generation retirement, and the growth of renewables.
Current state, provincial, and federal-level policies, as well as
the availability of low-cost renewable resources, will drive
further power sector decarbonization, but multistate and provincial
coordination will likely become more difficult and maintaining
reliability more expensive, posing headwinds that only further
national policy will be able to counter.
The IHS Markit Planning Case anticipates US and Canadian power
sectors achieving 64% and 57% emissions reductions by 2050. Though
there is notable renewable growth in both countries, low-cost
natural gas retains a significant market share, limiting steeper
declines. The Planning Case also assumes a relatively "light hand"
on the electrification of non-electric energy end uses, and as a
result, economy-wide carbon emissions decline only 20% and 2% by
2050 in the United States and Canada relative to 2005 levels.
Fast Transition represents a major departure from the
Planning Case
IHS Markit's recently released "Fast Transition Case" considers
deep decarbonization of the US and Canadian economies, with a
strong focus on energy end use electrification, paralleled by power
sector deep decarbonization. Critical elements of the deep (over
90%) power sector decarbonization include:
The phase-out of conventional coal
Development of carbon capture and sequestration
Increased success in nuclear plant life extensions
Significant renewable and storage capacity additions
The accelerated transition is underpinned by an all-of-the-above
policy push at the national and subnational level. The combined
policy push of end-use electrification and power sector
decarbonization achieves economy-wide carbon emission reductions
exceeding 70% in both the United States and Canada.
Fast Transition's low-CO2 power supply mix evolves in
two phases. Initially, generation capacity additions ramp up well
beyond historical levels, as energy end-use electrification leads
to substantial demand growth. Later, from the mid-2030s onward, the
generation mix is increasingly dominated by the goal of having the
power system's carbon emissions 90% below 2005 levels by 2050, with
new additions pushing out the remaining emitting resources.
Figure 1: Fast Transition's evolving electricity mix.
Clean energy development reflects regional resource
abundance
State and provincial ambitions and federal policy support
combine to drive a nearly tenfold growth of wind and solar capacity
in the United States and Canada.
The relative levels of renewable development are driven by
regional resource abundance, the amount of fossil-fueled power that
needs to be replaced, expected demand growth, and the potential for
transmission development.
Offshore wind plays a modest role in Fast Transition. In
regions with coastal access, offshore wind accounts for about 30%
of total US wind build. Offshore wind accounts for about 20% of
total US wind development overall.
Solar capacity, with its advantage of siting flexibility,
amounts to a majority of the US total clean energy capacity
increase. Wind capacity additions are regionally dominant over
solar only in ERCOT, the US Pacific Northwest, and Canada. However,
wind, with its better capacity factors, dominates renewable energy
growth in both countries.
Power sector reliability is maintained with a mix of
flexible resources
A key challenge in achieving over 90% power sector
decarbonization is maintaining system reliability to meet daily,
monthly, and seasonal variations in power demand and renewable
resource availability. Fast Transition provides this reliability
with:
Hundreds of gigawatts of batteries with storage durations of up
to 10 hours
Much of the conventional natural gas‒fired power assets remain
online and operate flexibly and at overall low capacity factors,
typically under 5% for combustion turbines and 20% for combined
cycles in the late 2040s.
Geothermal and gas CCS have the potential to operate in a
flexible mode, meeting daily fluctuations in demand, as opposed to
their typical base-load usage today.
IHS Markit closely monitors the North American energy markets,
publishing data, key insights and market analysis.
Learn more about our research.
Patrick Luckow is an associate director of Gas, Power,
and Energy Futures at IHS Markit. Mark Griffith is a director of Gas, Power, and
Energy Futures at IHS Markit.
