Annual Energy Outlook 2006 with Projections to 2030 - Usinfo.org

Carbon Dioxide and Sulfur Dioxide EmissionsTechnology Advances Could ReduceCarbon Dioxide EmissionsFigure 109. Carbon dioxide emissions in threetechnology cases, 2004, 2020, and 2030(million metric tons)10,0008,0006,000ReferenceHigh technology2005 technologySulfur Dioxide Emissions Fall Sharplyin Response to Tighter RegulationsFigure 110. Sulfur dioxide emissions fromelectricity generation, 1990-2030(million short tons)20151015.9History12.110.9Projections4,0002,00055.94.64.0 3.83.702004 2020 203001990 1995 2004 2010 2015 2020 2025 2030Future CO 2 emissions depend, in part, on the timing,effectiveness, and costs of new energy technologies.The reference case assumes continuing improvementin energy-consuming and producing technologies.The high technology case assumes earlier introduction,lower costs, and higher efficiencies for energytechnologies in the end-use sectors, as well asimproved costs and efficiencies for advanced fossil-firedand new renewable generating technologiesin the electric power sector [94]. As in the referencecase, however, technology adoption is assumed to beconsistent with past patterns of market behavior.Energy use grows more slowly in the high technologycase, with prospects for greater energy savings constrainedby gradual turnover of energy-using equipmentand buildings. Increased use of renewables andless new coal-fired generating capacity accompanythe efficiency improvements in the high technologycase. As a result, CO 2 emissions in 2030 are 9 percentlower in the high technology than in the referencecase, while total energy consumption is only 8 percentlower (Figure 109).In contrast, the 2005 technology case assumes thatonly the equipment and vehicles available in 2005 willbe available through 2030, with no further improvementsin efficiency for new building shells and electricpower plants. Consequently, more energy is used,and CO 2 emissions in 2030 are 9 percent higher thanin the reference case, with the difference quantifyingthe effects of technology improvement assumptionson the reference case projections.EPA’s CAIR regulation, promulgated in March 2005,caps emissions of SO 2 for the District of Columbia and28 eastern and midwestern States that were determinedby the EPA to contribute to nonattainment ofthe NAAQS for PM 2.5 and ozone. CAIR is scheduled tosupersede Title IV of the Clean Air Act through theuse of a cap and trade approach. Phase I of CAIRcomes into effect in 2010 for SO 2. Phase II takes effectin 2015. States can achieve the required emissionsreductions by using one of two compliance options:meet the State’s emissions budget by requiring powerplants to participate in an EPA-administered interstatecap and trade system that caps emissions in twostages; or meet an individual State emissions budgetthrough measures of the State’s choosing.Power companies are projected to add flue gasdesulfurization equipment to 141 gigawatts of capacityin order to comply with State or Federal initiatives.As a result of those actions and the growing useof lower sulfur coal, SO 2 emissions drop from 10.9million short tons in 2004 to 3.7 million short tons in2030 (Figure 110). The SO 2 emissions allowanceprice rises to nearly $890 per ton in 2015 and remainsbetween $880 and $980 per ton from 2015 through2030. The reference case projections indicate thatthe level of SO 2 reductions called for in CAIR can beachieved without significantly raising electricityprices, which are determined by many factors,including natural gas prices, environmental compliancecosts, and the status of electricity deregulationactivities.104 Energy Information Administration / Annual Energy Outlook 2006