PJM Interconnection recently released its annual emission rate report, which tracks emissions data from 2000 to 2021. The data is a key tool in helping to educate relevant stakeholders the progress made in reducing electricity-related emissions across the competitive power market.
Emerging From COVID-19
PJM has made significant strides in overall emissions reductions, showing significant decreases between 2017 and 2020. While 2020 was the lowest year for emissions in PJM’s history, that was due in large part to the decrease in energy use due to the COVID-19 pandemic. As the normalcy of daily life was brought to a standstill and Americans remained home, national power consumption fell 4 percent compared to the same time period last year and as a result, the associated emissions dropped as well. During that time, the commercial and industrial sectors experienced an 11- and 9-percent reduction in usage, respectively, while home energy usage increased.
As daily life returned to some form of normalcy in 2021, energy usage and emissions naturally increased. While power sector emissions rose across PJM’s footprint in 2021, their overall emissions remained below 2019 levels. Carbon Dioxide emissions fell by 8 pounds per megawatt-hour, or 1 percent, in 2021, while both Sulfur Dioxide and Nitrogen Oxides declined by seven pounds per megawatt-hour. Though 2020 to 2021 saw an increase in emissions, PJM’s emission trends continued to decline overall, the continuation of a 17-year pattern.
The Emissions Reduction Benefits of Competitive Market
More than 20 years ago, competitive wholesale electricity markets were established in many parts of the U.S. to strengthen reliability, increase competition and choice, help reduce power generation costs, enable innovation, and enhance efficiency and operations.
In the intervening period, markets have encouraged responsible investment in new, lower-emissions generation fuels. Natural gas, coal, wind, solar, hydropower, geothermal, nuclear, biomass and battery story are all a part of PJM’s portfolio. Because of the competitive marketplace structure, power generators are following market signals and transitioning away from dirtier fuels and increasingly adopting lower emitting options. By switching out coal for cleaner fuels like natural gas and renewables, customers in the PJM region have seen significant emissions reductions without expensive subsidies, rate-increase passthroughs or mandates
Regional transmission organizations (RTOs) such as PJM have also fostered innovation through competition, shaping the future of clean energy technology and reducing greenhouse gas emissions. By cultivating an environment in which all resources can thrive, PJM encourages the development and integration of new, more-efficient and lower-emission resources.
The Energy Information Administration predicts power usage will rise about 1 percent in 2022 as the economy continues to recover from the pandemic. At the same time, natural gas usage is expected to decline 2 percent, replaced partially by renewables, a low-emission energy source competitive market participants are ready to provide. Other studies, however, have predicted more natural gas will be needed even in high electrification, high renewable scenarios.
Competitive markets continue to be the best means of providing American families and businesses with the reliable, affordable and cleaner power they need. Policies that allow for competition among different forms of generation, rather than mandating specific fuels, have created a system where firm, reliable resources like natural gas and zero-emission renewables complement each other. As wind and solar generation continues to expand, natural gas and battery storage will play a needed support role, helping ensure the number one concern of families and businesses – reliable power.