Which new energy source is responsible for the largest reduction of greenhouse gas emissions? It’s not solar energy, biomass or even wind energy. The answer is new capacity thanks to plant efficiencies spurred by electric competition. Improving the output of these traditional generation plants has done more to reduce carbon emissions than all renewable energy combined.
Electric competition got underway in the early 90’s as utilities sold their generation plants to private operators. Many of those generation plants were nuclear reactors. Unlike utilities that were compensated by electricity rates set by a state’s utilities commission the new owners earned market-based prices for every additional kilowatt of electricity sold. This simple shift in incentives made efficiency improvements a priority, no matter how small, to increase electricity output. While each plant’s improvements were relatively minor, together they’ve offset more greenhouse emissions than the double-digit growth of wind turbines and solar panels.
A study from Catherine Wolfram and Lucas Davis found privately owned nuclear power plants increased their generation output by about 10 percent compared to plants that remained owned by utilities. They accomplished this efficiency in a number of ways, including shortening the time for the reactors’ refueling and reducing other reactor outages. The additional power provided from these small efficiencies was almost enough to meet electricity demand for all households in New England and offset about 40 million metric tons of carbon dioxide.
Nuclear efficiencies aren’t the only way a competitive market can reduce greenhouse gases. Dr. Wolfram and Jim Bushnell also found coal plants were more efficient under competition. The same coal plant was three percent more efficient under a private operator compared to the traditional utility owned operator. Again this offset in foregone fuel and emissions is individually small, but becomes very significant when applied to the hundreds of coal plants throughout the United States.
In addition to better efficiency, emission reduction efforts through clean coal technology have been fruitful over the past four decades according to the EIA and EPA. Emissions of sulfur dioxide (SO2), nitrogen oxides (NOx), and particulate matter (PM) per kilowatt-hour from coal-fueled electricity generation have been reduced by almost 90 percent over the period 1970-2011.
Competitive markets are also greening the economy by allowing consumers to support renewable energies, like wind, for an additional cost. And innovative demand response programs reward electricity consumers for reducing their consumption; further contributing to a reduction in emissions.
These largely low-tech solutions won’t revolutionize the industry or achieve the dramatic reductions in greenhouse gas emissions sought by many climate change scientists, but they can offset a lot of carbon in the short run. Without electric competition we’d be much further from the federal goal of an 80 percent reduction in greenhouse gas emissions by 2050.
