Clean Power Plan goes the way of the Dodo. But does it matter?

This week the EPA published the draft CPP replacement - known as the Affordable Clean Energy rule - in the federal register. Nonetheless the general view of industry is that CPP's exit, and ACE's entry, will not make a whole lot of difference. The simple reason is that utilities invest in new generation with an eye that extends far beyond one or even two presidential terms. Their long term view is unequivocally - and almost unanimously - that we are increasingly living in a carbon constrained world. As a result of this reality, that same view holds that coal - the most carbon intensive power generation fuel - has a limited shelf life. This explains why, over the last 10+ years, utilities have been fleeing coal in droves. In 2007, coal generated 50% of US electricity: today it is only 28% and falling. During President Trump's administration, the rate of decline of coal use has been unchanged from its 10 year average. This is illustrated by the previous diagram.

So much for the decline of coal: But back to the CPP. The Trump Administration claims one of the main reasons for getting rid of this Obama-era piece of legislation is that the GHG reduction target it proposes (a 32% reduction in power sector GHG emissions, relative to 2005 levels, by 2030) is only attainable at extortionate cost. But a look at US Energy Information Administration data shows that those emissions have been declining much faster than the trend rate which would be required to meet the 2030 target of 1,642.2 million tonnes per annum. In fact the power sector has collectively reduced their emissions by 85% of the CPP's 773.4 mmt requirement and has done so while still only half way between 2005 and 2030.

The cost of this impressive reduction in GHG emissions? It has certainly not been ruinously expensive as the CPP detractors have claimed. In fact, as the previous graphic shows, inflation adjusted US power prices have been unchanged since 2005.