Amidst an historic surge in energy demand, each Earth Day is a reminder to reduce emissions and protect our environment for future generations. In the power sector, competitive power markets have proven the most effective solution to deploy cleaner resources that drive emissions reductions while balancing reliable and cost-effective access to electricity.
Over the past three decades, competition has helped transform the nation’s power mix— leading to lower emissions while maintaining reliability and helping keep costs competitive for consumers. Markets do this by rewarding efficient, cost-effective generation, which in turn drives innovation across the sector, lowering costs and accelerating deployment of cleaner energy solutions.
Competition Supports Cleaner Electricity
Competitive power markets create powerful incentives for generators to modernize fleets, adopt new technologies, and retire older, less efficient facilities. Rather than relying solely on centralized planning, markets reward the resources that deliver electricity at the best value.
The result? Market competition has contributed to several shifts in the nation’s generation mix:
- Older, higher-emitting plants have been replaced by newer, more efficient generation technologies.
- Investment has expanded in wind, solar, battery storage, and nuclear generation capacity.
- Lower-cost resources, including highly efficient natural gas, are increasingly meeting electricity demand.
These shifts are delivering measurable results. In regions with competitive power markets, renewable buildout has grown rapidly—often faster than in other regions.
Natural Gas Has Accelerated Emissions Reductions
A major contributor to U.S. power sector emissions reductions has been the shift from higher-emitting coal generation to more efficient natural gas generation.
Compared to other fossil fuels, natural gas plants produce significantly lower emissions of carbon dioxide, sulfur dioxide, nitrogen oxides, and particulates, which has resulted in better air quality in communities throughout the country. As markets prioritized affordability and performance, natural gas expanded in many regions and led to the retirement of higher-emitting plants.
Key impacts include:
- Switching to natural gas is responsible for roughly 60% of power sector emissions reductions since 2005.
- The transition to natural gas has reduced emissions by more than 6,300 million metric tons of CO₂.
- By comparison, that scale of reductions would be equal to removing over 1.4 billion gasoline-powered vehicles from the road for one year.
Just as importantly, natural gas plants can ramp up quickly, providing the flexibility needed to support a grid that includes growing amounts of weather-dependent renewable generation.
Reliable Power for a Growing Grid
Electricity demand is rising as the economy becomes more digital, more electrified, and more energy-intensive. From AI and advanced manufacturing to data centers and electrification, the grid is being asked to do more than ever before.
Meeting that demand requires a diverse mix of generation resources that can deliver both clean energy and dependable power. As renewable energy expands, maintaining reliability requires resources that can respond when generation fluctuates.
EPSA member companies help support this reliability through a broad portfolio of generation resources, including:
- 142,000 MW of natural gas
- 32,000 MW of nuclear
- 10,500 MW of wind
- 6,300 MW of solar
- 5,300 MW of battery storage
- 3,500 MW of hydropower
- 800 MW of geothermal
Together, these resources illustrate how competitive markets support a diverse and flexible mix that strengthens reliability while continuing to expand cleaner energy resources.
Smarter Systems and Faster Deployment
While AI growth brings challenges, it also presents opportunities for a smarter, more responsive system. AI-enabled tools can improve demand forecasting, optimize dispatch decisions in real time, and enhance asset performance across generation fleets. These capabilities allow grid operators and market participants to extract more efficiency from existing infrastructure while supporting the integration of new resources.
These innovations are already taking shape. Through its partnership with Google’s Tapestry initiative, PJM is beginning to apply AI to further speed its interconnection queue. By automating application review, integrating fragmented data systems, and improving planning models, these tools have the potential to significantly reduce delays and accelerate the deployment of new generation resources.
Policy and Supply Chain Barriers
At the same time, innovation alone is not enough. The pace of infrastructure development must accelerate to keep up with demand growth while bringing cleaner energy resources on the system. Today, lengthy permitting processes remain significant barriers to bringing new generation and transmission resources online. Streamlined, predictable permitting frameworks will be essential to enable the timely deployment of all types of resources—renewables, natural gas, nuclear, storage, and emerging technologies alike.
PJM is working to accelerate the interconnection of new generation capacity of all types and has seen progress under its reformed processes – but these advancements are delayed by factors beyond the grid operator’s control.
- Since 2023, PJM has processed more than 170,000 MW of new generation requests with 30,000 MW to be processed in 2026.
- Of the 30 GW of projects scheduled for completion by the end of 2026, 25 GW are renewable and storage projects. PJM also expects solar, wind, battery, and hybrid projects to be strongly represented moving forward.
- In addition, there are 46 GW of construction-ready projects that have been approved but not yet built, of which more than 40 GW are comprised of renewables, storage, or renewable-hybrid resources.
Just as importantly, supply chain constraints and workforce shortages delay equipment delivery, increase project costs, and limit the speed at which critical infrastructure can be built. Addressing these barriers will be essential to getting new resources on the grid.
EPSA member companies have announced new investments and actions to secure critical equipment like state-of-the-art gas turbines, along with the workforce needed to support new development. For example, NRG, GE Vernova and Kiewit are partnering to support the buildout of over 5 GW of new capacity to meet rising demand from AI by combining NRG’s generation expertise with GE Vernova’s turbine technology and Kiewit’s construction capabilities.
State policymakers have a key role to play in addressing on-the-ground barriers to development of all types of resources.
Competition Supports the Grid of the Future
As the power sector evolves, competitive power markets remain the most effective tools for delivering reliable, affordable, and cleaner electricity.
By allowing market signals to guide investment decisions, competitive power suppliers can deploy new technologies, retire outdated infrastructure, and build the resources needed to meet rising demand. Competition helps aligns economic and environmental goals by driving innovation, lowering costs, and reducing emissions simultaneously.
On Earth Day and throughout the year, competitive power markets are powering a smarter, cleaner energy future.
