Putting 100% Clean Power Within Reach: A Post-IRA Pathway

NRDC and Evergreen Action released a roadmap to reduce power sector emissions using federal actions, state programs, and robust implementation of last year’s climate legislation.

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NRDC and Evergreen Action released a report today outlining a roadmap to reduce power sector emissions 80 percent from 2005 levels by 2030—an essential milestone on the way to reaching President Biden’s goal of 100 percent clean electricity by 2035—using federal actions, state programs, and robust implementation of last year’s climate legislation. The report contains new NRDC modeling showing that, together with the clean energy investments in the Inflation Reduction Act (IRA), ambitious carbon pollution standards for new and existing fossil fuel-fired power plants could cut power-sector carbon pollution 77 percent below 2005 levels by the end of this decade, putting the 80 percent by 2030 target within reach.

NRDC and Evergreen’s new report assesses the steps the Biden administration and state leaders can take to stay within reach of 100 percent clean electricity by 2035 and address harmful pollution from fossil generation. Our recommendations include:

  • Setting ambitious carbon pollution standards for new and existing power plants under the Clean Air Act, through the Environmental Protection Agency (EPA), and setting EPA pollution standards that reduce traditional air and water pollutants and improve public health.
  • Expanding transmission capacity, speeding up interconnections, and creating market parity for clean energy at the Federal Energy Regulatory Commission (FERC).
  • Implementing the Inflation Reduction Act effectively, distributing funds to maximize carbon reductions and equitable economic opportunity.
  • Advancing climate action at the state level, including accelerated 100 percent clean electricity and pollution standards and heightened oversight of polluting utilities.

President Biden made an international commitment to cut economy-wide greenhouse gas (GHG) emissions 50 to 52 percent by 2030. Cleaning up the electricity sector—which produced 25 percent of U.S. GHG pollution in 2020—is a critical component of an economy-wide decarbonization strategy. Decarbonizing the grid by increasing the share of power generated by clean sources such as wind, solar, and battery storage, and slashing pollution from sources such as coal and fossil gas, is the largest near-term opportunity for climate action. A clean grid is also essential to decarbonize other sectors: electrifying transportation, buildings, and industry as rapidly as possible using clean power to minimize fossil fuel pollution across the economy.

Reaching 80 percent clean power by 2030 is essential to achieve both the U.S.’s 2030 international target and President Biden’s commitment to 100 percent clean power by 2035. Last year’s legislative progress was a big step forward toward 80 percent: NRDC’s modeling finds that the IRA’s historic clean energy tax incentives, grants, and other provisions of the IRA can bring down power sector carbon emissions to 66 percent below 2005 levels by 2030. But how do we get from there to where we need to go? A combination of ambitious federal executive action and accelerated state policy is needed to put an 80 percent reduction by 2030 within reach – and that’s what our new paper lays out.

The biggest opportunity: EPA carbon standards for new and existing fossil power plants

Setting stringent carbon pollution standards is the most significant action the federal administration needs to take now to clean up the grid this decade. And fortunately, the IRA directs EPA to issue new carbon pollution standards for power plants, and the law’s incentives dramatically reduce the cost of such standards for power companies and their customers.

Based on new NRDC modeling presented in the report, setting strong carbon pollution standards for both existing and new coal and gas plants is estimated to have an equal impact on power sector pollution as the IRA clean electricity tax credits themselves. Pairing the IRA with strong EPA carbon standards for power plants, the Biden Administration could cut power sector carbon pollution 77 percent below 2005 levels and achieve a 76 percent clean grid by the end of this decade. However, setting weak standards, or failing to set standards for existing gas plants, would leave potential emission reductions on the table—more than half of the standards’ potential carbon reductions would be lost if existing gas plants’ carbon pollution is left unregulated.

Power sector emissions under “Business-as-Usual” (BAU) with and without IRA and two regulatory scenarios: the IRA plus moderate carbon pollution standards (covering new gas and existing coal) or with more ambitious standards (also covering existing gas)

Pairing the IRA’s clean electricity tax credits with EPA carbon pollution standards will support an unprecedented buildout of clean, renewable power. By 2030, the U.S. could triple the wind, solar, and storage capacity operating on the grid (as compared to today), with capacity quadrupling by 2035. The IRA also includes significant incentives to bolster clean energy manufacturing and domestic supply chains to ensure this growth in clean energy drives tremendous new economic activity and jobs growth across the country.

Cumulative renewable energy capacity under two EPA carbon rule scenarios

Cumulative capacity of solar, wind, and storage through 2035 under moderate or ambitious standards

Essential safeguards: EPA standards for traditional air and water pollution

The power sector is not only a major source of climate pollution, but also of health-harming air and water pollution. Often, fossil fuel-fired power plants are located in and disproportionately impact the health of low-income communities and communities of color. EPA must update and strengthen a suite of clean air and water standards for fossil power plants—under the existing authority of the Clean Air Act, Clean Water Act, and the Resource Conservation and Recovery Act—that will help improve air and water quality across the country, in order to better protect communities from health-harming pollution such as sulfur dioxide, fine particle pollution, toxic air pollutants, and coal ash waste.

Facilitating clean energy: FERC actions to improve access to clean power

The Federal Energy Regulatory Commission (FERC) has an essential role to play in facilitating the transition to 100 percent clean electricity. FERC must use its authority to: expand transmission capacity, a major bottleneck to deploying the levels of clean energy needed; speed up interconnections, so that the thousands of solar, wind and storage projects waiting for approval can get connected to the grid; and create market parity for clean energy to remove barriers for clean power deployment while maintaining reliability.

Implementing the IRA at pace and scale

The IRA—the largest investment in clean energy and climate action in U.S. history—must be implemented efficiently, effectively, and equitably to maximize greenhouse gas emission reductions and economic benefits. The IRA’s groundbreaking investments in clean and renewable energy and energy storage will help transform the electric grid, including the following:

  1. Clean energy tax credits: long-term, full-value extension of the federal investment and production tax credits (ITC and PTC) for clean electricity generation, expanded to cover energy storage and interconnection costs.
  2. DOE loan guarantee program: a powerful tool to leverage private sector investment in innovative clean energy technologies.
  3. USDA rural utilities financing: programs to help rural communities retire coal-fired power plants and deploy more clean energy.
  4. EPA “force multiplier” programs: programs like the Greenhouse Gas Accelerator, Climate Pollution Reduction Grants, and Environmental and Climate Justice Block Grants can help reduce emissions and deliver on environmental justice.
  5. DOE transmission funding: grants and loans to build new transmission infrastructure and facilitate siting.

State action to accelerate the clean energy transition

States have played an essential role in the U.S.’s progress toward our clean energy and climate goals to date. And state programs will continue to be crucial in closing the gap between current federal policies and our targets. For example, state governors, legislatures, and utility regulators will all have critical roles in implementing the IRA’s climate and clean energy provisions. And at the same time, more states will need to advance clean electricity standards and goals in line with the national targets of 80 percent clean by 2030 and 100 percent clean power by 2035.

States with 100 percent clean energy standards

Map showing states that have set 100 percent clean electricity standards or goals with target year

We are at a pivotal moment in the clean energy transition. Congress took an enormous step by enacting the IRA’s historic clean energy and climate investments. But those investments alone will not achieve our national climate and clean power targets—the Biden administration and state policymakers must take bold actions to reduce power sector pollution and facilitate the buildout of clean energy. Decisive and immediate action is required to achieve 80 percent emission reductions by 2030 and keep 100 percent clean power by 2035 within reach. Our new paper lays out the roadmap to reach that essential destination. 

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