The Power Sector Carbon Index represents the carbon intensity of the U.S. electricity sector. We observe that the Power Sector Carbon Index decreased by 24% between 2005 and 2016. In 2005 the index value was 1,324 lb CO₂ per MWh, and by 2016 it had dropped to 1,005 lb CO₂ per MWh.

The amount of electricity generated in the United States each year has been quite stable since 2005, only varying by about 2.5%, while the annual direct CO₂ emissions from the power sector decreased by 23% over that same period. This means that the change in emissions is almost entirely responsible for the large change in the Index. Indeed, the main contributors to the observed decrease are a switch from coal to natural gas and a 75% increase in renewable electricity generation. The increased efficiency of natural gas power plants was the next largest contributor to the decrease in the value of the Index.

The Power Sector Carbon Index dropped 320 lb CO₂ between 2005 and 2016 (left), primarily due to a switch from coal to natural gas and an increase in renewable generation (right)

Coal to Gas

A little over half of the reduction in the index value that is observed between year 2005 and 2016 is due to a shift from coal to natural gas for electricity generation. In 2005, coal represented half of total U.S. generation, and by 2016 it was reduced to 30%. At the same time, electricity produced by natural gas grew from 19% of U.S. electricity generation in 2005 to a third of the total in 2016. Notably, 2016 was also the first year where more electricity in the U.S. was generated from natural gas than coal. Coal-fired plants emitted an average of 2,200 lb CO₂ per MWh and natural gas power plants emitted less than half of that amount.

Generation from Coal, Natural Gas, Renewables, and combined Coal & Natural Gas in 2005 and 2016

Increase in Renewable Generation

The increase in renewable electricity generation is responsible for another 40% of the 320 lb CO₂ per MWh reduction. While coal generation went down and natural gas generation went up, their combined share dropped from 68% to 64%. The growth in electricity from renewable sources made up for this drop and more, accounting for 15% of the U.S. total in 2016 – an increase of nearly 75%. Wind generation grew nearly 12-fold during this time, accounting for 77% of the increase in generation from renewable sources.

Increase in Gas-fired Plant Efficiency

Natural gas power plants operated with an average efficiency of 42% in 2005, and 44% in 2016. Because of this, average CO2 emission intensity of natural gas power plants dropped from 964 to 930 lb CO₂ per MWh, accounting for another 4% of the overall index reduction.