To keep in line with the twists and turns of the fate of EPA’s Clean Power Plan, one of the highest-profile environmental regulations to come out of the Agency, which aims to reduce U.S. power sector CO2 emissions by more than 30% by 2030 below 2005 levels, the November 8 presidential election was no different. With the election of Donald Trump to be the next president of the United States, many in the industry now see the Clean Power Plan in its current form as good as “dead”. The only thing in question is how it is going to “die” (see other two articles in this report for more details).

Amid the unlikely scenario of having any form of federal carbon regulation/legislation in the near future, regional programs, states, and individual utilities are moving forward to reduce their carbon footprint. Both existing U.S. CO2 emission programs – the Regional Greenhouse Gas Initiative (RGGI) and California/Quebec cap-and-trade program (CA AB 32) – have recently developed plans to extend the current programs beyond their current expiration date of 2020 all the way through 2030.

During its 2016 Program Review, RGGI’s nine member states are discussing likely paths forward for the regional CO2 cap-and-trade program. Based on last November’s stakeholder meeting, the likeliest scenarios to extend the program through 2030 include either a 2.5% or a 3.5% annual CO2 emissions cap reduction. An initial suggestion of reducing the cap by 5% annually as originally proposed by Massachusetts has been abandoned after strong opposition from Maryland and Delaware (Maryland is the only RGGI state left with significant in-state coal generation). RGGI has also been very open and interested in accepting new members into the program. Possible candidates to join RGGI are Virginia, Illinois, Minnesota, and under a different governor New Jersey.

CA AB 32, the other reginal CO2 cap-and-trade program, is also in the midst of extending the current cap-and-trade program through 2030. As outlined in the California State Senate Bill 32 (SB 32) and signed by Governor Brown on Sept. 8 2016, California aims to reduce its greenhouse gas emissions by 40% below 1990 levels by 2030, a much more ambitious target than the previous goal of hitting 1990 levels by 2020.

In its 2017 2017 Climate Change Scoping Plan Update, CARB proposes the following major elements of the framework to achieve this ambitious goal:

• Achieve 50 percent Renewables Portfolio Standard (RPS) by 2030
• Doubling of energy efficiency savings by 2030
• Increased stringency of Low Carbon Fuel Standard (LCFS)
• 20 percent reduction in greenhouse gas emissions from the refinery sector
• Increase number of zero emission vehicles on the roads
• Extend cap-and-trade program through 2030 with declining caps, continued linkage with Quebec and linkage to Ontario

CARB is also looking for opportunities to strengthen the cap-and-trade program design by reducing the offset usage limits and redesigning the allocation strategy to reduce free allocation to support increased technology and energy investment at covered entities. Due to its scope and complexity, other U.S. states are unlikely to join the California/Quebec (/Ontario) cap-and-trade program in the near future.

Other states are also working on reducing their carbon footprint mainly by encouraging increased generation from non-CO2 emitting resources such as nuclear and renewables through financial incentives.

For example, On August 1, 2016, New York’s Public Service Commission presented the Clean Energy Standard (CES). New York’s latest policy achievement to combat climate change will require 50% of the state’s 2030 electricity consumption to come from renewable energy sources and provide financial incentives to at-risk upstate nuclear power plants for their carbon-free electricity.

Illinois passed a sweeping energy bill on December 1, 2016, which provides financial incentives to its struggling nuclear power plants while also encouraging the use of in-state renewable resources to meet its 25% by 2025 RPS target. Other states have also extended or continue to extend their existing RPS targets to encourage continued investments in renewable and other non-emitting resources to meet electricity demand. Oregon increased its RPS target to 50% by 2040. Washington DC extended its target to 50% by 2032 and Michigan raised its objective to 15% by 2021 (up from 10%). Maryland marks the latest state to expand its RPS target as the Maryland House of Delegates on January 31, 2016 approved an override of Gov. Larry Hogan’s veto of the Clean Energy Jobs Act, legislation that would boost the state’s renewable portfolio standard (RPS) from 20% by 2022 to 25% by 2020.

As for the entire U.S. power sector, the trend of recent years will continue into the next few years, resulting in reduction of carbon intensity for the entire sector without any federal intervention. The U.S. electricity industry is planning to increase natural gas-fired generating capacity by 11.2 gigawatts (GW) in 2017 and 25.4 GW in 2018, based on information reported to the Energy Information Administration (EIA). Depending on the timing and utilization of these plants, the new additions could help natural gas maintain its status as the primary energy source for power generation, even if natural gas prices rise moderately. The upcoming expansion of natural gas-fired electricity generating capacity follows five years of net reductions of total coal-fired electricity generating capacity. Available coal-fired capacity fell by an estimated 47.2 GW between the end of 2011 and the end of 2016, equivalent to a 15% reduction in the coal fleet over the five-year period. Should the majority of the planned natural gas fired power plants be built, they will ultimately displace existing, older coal generation, therefore reducing CO2 emissions from the power sector.

All in all, these trends in state legislation that encourage the expansion of the renewable energy sector while helping struggling nuclear power plants, and the continued trend in the U.S. power sector to replace retiring coal generation with new more efficient natural gas generation will eventually result in significant CO2 reductions for the U.S. power sector, Clean Power Plan or not.