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Decarbonization Targets for the Largest U.S. Utilities

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The following content is sponsored by the National Public Utilities Council

Decarbonization Targets for the Largest U.S. Utilities

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Decarbonization Targets for the Largest U.S. Utilities

This was originally posted on April 23, 2021, on Visual Capitalist.

The U.S. recently rejoined the Paris Climate Agreement and decarbonization is back on the minds of government officials and companies alike.

Though every sector plays a major role on the path to net zero carbon emissions, none are as impactful as the energy sector. In 2016, almost three-quarters of global GHG emissions came from energy consumption. With organizations looking to either curb energy consumption or transition to cleaner forms of energy, the pressure is on utilities to decarbonize and offer green alternatives.

How are U.S. utilities responding?

This infographic from the National Public Utilities Council highlights the decarbonization targets of the largest investor-owned and public U.S. utilities.

U.S. Utility Decarbonization Targets Through 2035

The American energy sector has many players, but the largest utilities account for the bulk of production.

For each state, we looked at the largest investor-owned and public electric utilities by retail sales as tracked by the U.S. Energy Information Administration. Decarbonization targets were taken from each utility’s stated goals or sustainability report.

After narrowing down from 3,328 different entities and subsidiaries, the final list of 60 utilities accounted for 60% of U.S. energy sales in 2019 at just under 1.93 trillion MWh (megawatt hours).

Many companies on the list have multiple goals spread across different timeframes, but they can be grouped into a few distinct categories:

  • Reducing carbon dioxide (CO2) or greenhouse gas (GHG) emissions: These measures are either percentage-based or flat reductions, and also include becoming carbon neutral or “net zero” by balancing reduced emissions with carbon offsets.
  • Reducing carbon intensity: These measures work on reducing the impact of electricity generated by fossil fuels, rather than reducing the amount directly.
  • Increasing renewable energy production: These measures focus on adding renewable energy with a lower carbon footprint to the production mix and can be either percentage-based or flat additions.
  • Increasing clean electricity production: These measures are centered around ensuring that electricity produced is 100% carbon free.

Utilities with decarbonization targets set for 2035 and earlier vary wildly in scope, from completely carbon neutral to minimal reductions.

EntityState (Largest Provider)Decarbonization GoalTarget Year
City of SeattleWACarbon neutral2005 (since)
ALLETEMN△50% Renewable energy2021
ExelonDC, DE, IL, MD, NJ, PA▽15% GHG emissions2022
Otter Tail PowerND▽30% CO2 emissions, △30% Renewable energy2022
AvangridCT, ME▽35% GHG emissions2025
Emera (Tampa Electric)FL▽55% CO2 emissions2025
Green Mountain PowerVT▽100% CO2 emissions2025
NextEra EnergyFL▽67% CO2 emissions2025
NiSourceIN▽50% GHG emissions2025
NRGTX▽50% CO2 emissions2025
Avista CorpID, WACarbon neutral2027
AESIN▽70% Carbon intensity2030
AlliantIA, WI▽50% CO2 emissions2030
AmerenIL, MO▽50% CO2 emissions2030
American Electric PowerAR, KY, LA, MI, OK, OH, VA, WV▽70% CO2 emissions2030
Arizona Public ServiceAZ△65% Clean electricity2030
Black HillsSD, WY▽40% GHG emissions2030
City of Colorado SpringsCO▽80% CO2 emissions2030
DTE Electric CompanyMI▽50% CO2 emissions2030
Duke EnergyFL, IN, NC, OH, SC▽50% CO2 emissions2030
EntergyAR, LA, MS▽50% CO2 emissions2030
EversourceCT, MA, NHCarbon neutral2030
FirstEnergyMD, NJ, OH, PA▽30% GHG emissions2030
Green Mountain PowerVT△100% Renewable energy2030
Long Island Power AuthorityNY▽40% GHG emissions2030
MDU ResourcesND▽45% GHG emissions2030
National GridMA, NY, RI▽80% GHG emissions2030
NiSourceIN▽90% GHG emissions2030
NV EnergyNV△50% Renewable energy2030
OGE ElectricOK▽50% CO2 emissions2030
Pacific Gas & ElectricCA△60% Renewable energy2030
PacifiCorpID, OR, UT, WY▽60% CO2 emissions2030
PSEGNJ▽13 million tons CO2 emissions2030
Puget Sound EnergyWACarbon neutral2030
Southern California EdisonCA△60% Renewable energy2030
Southern Company AL, GA, MS▽50% CO2 emissions2030
Tennessee Valley AuthorityTN▽70% CO2 emissions2030
Vistra (TXU Energy Retail)TX▽60% CO2 emissions2030
WEC EnergyWI▽40% CO2 emissions2030
Xcel EnergyCO, MN, ND, NM, SD▽80% CO2 emissions2030
AvangridCT, MECarbon neutral2035
Salt River ProjectAZ▽65% Carbon intensity, ▽30% CO2 emissions2035
Tucson Electric PowerAZ▽80% CO2 emissions, △70% Renewable energy2035

It’s also important to note that carbon emission reductions are not equal across the board.

Reduction is traditionally based on a base-year measurement (usually 2000 or 2005) that changes for each utility, and a small reduction at a major energy producer can be more impactful than 100% clean energy at a small local utility.

U.S. Utility Decarbonization Targets 2040 and Beyond

From 2040 and beyond, the decarbonization efforts become more ambitious.

In line with many states and the federal government making sweeping clean energy commitments, most of the utility companies with decarbonization targets from 2040 to 2050 are aimed at either carbon neutrality or significant reductions.

For some companies these are their first and only targets, while others are building on smaller goals from earlier years. In the case of the few utility companies marked *N/A, a decarbonization target goal couldn’t be found.

EntityState (Largest Provider)Decarbonization GoalTarget Year
AmerenIL, MO▽85% CO2 emissions2040
Black HillsSD, WY▽70% GHG emissions2040
City of Colorado SpringsCO▽90% CO2 emissions2040
City of San AntonioTX▽80% CO2 emissions2040
CMS EnergyMICarbon neutral, △90% Clean electricity2040
Consolidated EdisonNY△100% Clean electricity2040
Emera (Tampa Electric)FL▽80% CO2 emissions2040
Lincoln Electric SystemNECarbon neutral2040
National GridMA, NY, RI▽90% GHG emissions2040
PNM ResourcesNM▽100% CO2 emissions2040
Portland General ElectricORCarbon neutral2040
PPLKY, PA▽70% CO2 emissions2040
Avista CorpID, WA△100% Clean electricity2045
Hawaiian Electric IndustriesHICarbon neutral, △100% Renewable energy2045
Idaho PowerID△100% Clean electricity2045
NorthWestern EnergyMT, SD▽90% Carbon intensity2045
Pacific Gas & ElectricCA△100% Clean electricity2045
Puget Sound EnergyWA△100% Clean electricity2045
SempraCA△100% Clean electricity2045
Southern California EdisonCA△100% Clean electricity2045
PSEGNJ▽80% CO2 emissions2046
AlliantIA, WICarbon neutral2050
AmerenIL, MOCarbon neutral2050
American Electric PowerAR, KY, LA, MI, OK, OH, VA, WV▽80% CO2 emissions2050
Arizona Public ServiceAZ△100% Clean electricity2050
City of San AntonioTXCarbon neutral2050
Dominion EnergyNC, SC, VACarbon neutral2050
DTE Electric CompanyMICarbon neutral2050
Duke EnergyFL, IN, NC, OH, SCCarbon neutral2050
Emera (Tampa Electric)FLCarbon neutral2050
EntergyAR, LA, MSCarbon neutral2050
EvergyKS, MO▽80% CO2 emissions2050
FirstEnergyMD, NJ, OH, PACarbon neutral2050
Long Island Power AuthorityNY▽85% GHG emissions2050
National GridMA, NY, RICarbon neutral2050
NRGTXCarbon neutral2050
NV EnergyNV△100% Clean electricity2050
Omaha Public Power DistrictNECarbon neutral2050
PacifiCorpID, OR, UT, WY▽80% CO2 emissions2050
PPLKY, PA▽80% CO2 emissions2050
PSEGNJCarbon neutral2050
Salt River ProjectAZ▽90% Carbon intensity2050
Southern Company AL, GA, MSCarbon neutral2050
Vistra (TXU Energy Retail)TXCarbon neutral2050
WEC EnergyWI▽80% CO2 emissions2050
Xcel EnergyCO, MN, ND, NM, SDCarbon neutral2050
MidAmerican EnergyIA, IL△100% Renewable energyN/A
Cleco PowerLAN/AN/A
ENMAX (Versant Power)MEN/AN/A
Nebraska Public Power DistrictNEN/AN/A
PUD 1 of Snohomish CountyWAN/AN/A
Unitil Energy SystemsNHN/AN/A

While the targets set above are significant, they are also a long time away from being met. With pressure to decarbonize increasing across the board, utility companies may need to reassess the impact or timeliness of their decarbonization targets.

The National Public Utilities Council is a collaborative body of industry experts coming together to solve decarbonization challenges in the power sector and the proud sponsor of the Decarbonization Channel.

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Decarbonization

Visualized: Carbon Pricing Initiatives in North America

We map out all of the national and subnational carbon pricing initiatives in North America using data from the World Bank.

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Visualized: Carbon Pricing Initiatives in North America

Carbon pricing mechanisms are a vital component of an effective emissions reduction strategy. But these initiatives currently cover just 15% of total North American carbon emissions.

To discover which initiatives are currently contributing to this coverage, this graphic sponsored by the National Public Utilities Council maps out all of the national and subnational carbon pricing initiatives across North America using data from the World Bank.

Let’s begin by looking at types of carbon pricing.

Carbon Pricing Explained

Carbon pricing is a market-based policy tool that assigns a cost to carbon emissions, incentivizing reductions through the use of economic signals.

While there are several ways to go about carbon pricing, the most commonly used types of carbon pricing strategies include:

  • Emissions Trading Systems (ETS)
    ETS establishes a market for trading emissions allowances among companies. A cap on total emissions is set, and all companies receive tradable emission units. Those exceeding their limits can buy allowances from those with a surplus.
  • Carbon Taxes
    Carbon taxes impose a direct price on carbon emissions. Their goal is to disincentivize carbon-intensive activities, such as burning fossil fuels, by making them financially less attractive.

In 2022, carbon pricing strategies generated $5 billion in the U.S. and $8 billion in Canada. These funds were primarily allocated toward green investments and support for low-income households.

Carbon Pricing Initiatives By Country

The U.S. is currently the only country in North America without a national carbon pricing initiative. Both Canada and Mexico, on the other hand, have implemented federal ETS and carbon tax programs.

Beyond federal initiatives, many regions on the continent have also implemented or are considering their own carbon pricing initiatives. These subnational initiatives are listed in the table below:

RegionCarbon Pricing InitiativeStatus
🇨🇦 Alberta, CanadaETSImplemented, 2007
🇨🇦 British Columbia, Canada Carbon tax and ETS Implemented, 2008 and 2016
🇨🇦 Manitoba, CanadaCarbon tax and ETS Under Consideration
🇨🇦 New Brunswick, CanadaCarbon tax and ETS Implemented, 2020 and 2021
🇨🇦 Newfoundland and Labrador, CanadaCarbon tax and ETS Implemented, both 2019
🇨🇦 Northwest Territories, CanadaCarbon taxImplemented, 2019
🇨🇦 Nova Scotia, CanadaETSImplemented, 2019
🇨🇦 Ontario, CanadaETSImplemented, 2022
🇨🇦 Prince Edward Island, CanadaCarbon taxImplemented, 2019
🇨🇦 Quebec, CanadaETSImplemented, 2013
🇨🇦 Saskatchewan, CanadaETSImplemented, 2019
🇺🇸 California, U.S.A.ETSImplemented, 2012
🇺🇸 Hawaii, U.S.A.Carbon taxUnder Consideration
🇺🇸 Massachusetts, U.S.A.ETSImplemented, 2018
🇺🇸 New York, U.S.A.ETSUnder Consideration
🇺🇸 North Carolina, U.S.A.ETSUnder Consideration
🇺🇸 Oregon, U.S.A.ETSImplemented, 2021
🇺🇸 Pennsylvania, U.S.A.ETSUnder Consideration
🇺🇸 Regional Greenhouse Gas Initiative (RGGI)*ETSImplemented, 2009
🇺🇸 Washington, U.S.A.ETSImplemented, 2023
🇲🇽 Durango, Mexico Carbon taxImplemented, 2023
🇲🇽 Guanajuato, Mexico Carbon taxScheduled, 2023
🇲🇽 Jalisco, Mexico Carbon taxUnder Consideration
🇲🇽 Queretaro, Mexico Carbon taxImplemented, 2022
🇲🇽 State of Mexico, Mexico Carbon taxImplemented, 2022
🇲🇽 Yucatan, Mexico Carbon taxImplemented, 2022
🇲🇽 Zacatecas, Mexico Carbon taxImplemented, 2017

The RGGI was the first mandatory ETS initiative in the U.S. and applies to power plants in Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Rhode Island, Vermont, and Virginia.

Since its inception, emissions in the RGGI region fell by more than 50%—twice as fast as the nation as a whole—and raised nearly $6 billion to invest in local communities.

Are All Carbon Pricing Initiatives Created Equal?

In the landscape of carbon pricing initiatives, one critical factor stands out—the price of carbon itself.

According to The High-Level Commission on Carbon Prices, achieving alignment between carbon pricing strategies and the Paris Agreement temperature target requires a price of US$40–80/tCO2 by 2020 and US$50–100/tCO2 by 2030.

Unfortunately, many North American initiatives fall short of these prices, especially in the U.S. and Mexico, where carbon prices reach as low as US$12/tCO2e. Conversely, most Canadian initiatives set a price of US$48/tCO2e.

It’s also important to note that the broader impact of these initiatives depends on a multitude of other factors, including the industries they cover, their flexibility in accommodating changing economic conditions, and the manner in which generated revenue is invested back into sustainable practices.

Within the balance of these various elements lies the potential to steer all industries—including the power sector—toward the necessary emissions reductions.

Learn more about how electric utilities and the power sector can lead on the path toward decarbonization here.

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Decarbonization

The 3 Building Blocks for a Decarbonized Power Sector

How can the U.S. achieve a 100% clean power sector? See the three key pillars of a decarbonized power sector in this infographic.

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decarbonized power sector

The 3 Building Blocks for a Decarbonized Power Sector

As part of the Paris Agreement, the U.S. has set goals to achieve a 50-52% reduction in emissions by 2030 and net-zero emissions by 2050.

To lay the foundation for these targets, the Biden Administration’s goal is to create a 100% clean power sector by 2035.

This infographic from the National Public Utilities Council shows why a clean power sector is essential for net-zero emissions and highlights the three building blocks needed to achieve it. This is part 2 of the Road to Net Zero series of infographics.

The State of U.S. Energy Use

Today, fossil fuels like oil and gas provide most of the energy used in the U.S. for transportation, heating, and industrial purposes.

For example, due to the prevalence of gasoline vehicles, petroleum accounts for 90% of the transportation sector’s energy consumption, with electricity making up less than 1% of the total.

Similarly, around 80% of the industrial sector’s energy needs are met with natural gas and petroleum. Meanwhile, the residential and commercial sectors use large amounts of natural gas for their space heating needs, along with electricity for other appliances.

With fossil fuels widespread in the U.S. energy mix, the fastest path to net-zero emissions is to electrify and decarbonize energy use in all sectors. This involves replacing technologies that use fossil fuels with those powered by electricity and a clean grid.

For instance, electric vehicles could transform the transportation sector’s energy consumption and reduce emissions. Additionally, electric heat pumps could replace oil and gas boilers in residential and commercial buildings.

However, for electrification to be effective in reducing emissions, decarbonizing the power sector and generating clean electricity is essential.

The Path to a Decarbonized Power Sector

Decarbonization calls for a transformation of the power sector, from one where fossil fuels generate 60% of total electricity to one dominated by clean energy and backed by an upgraded grid.

There are three foundational building blocks for the road to 100% clean electricity:

#1: Accelerate Clean Energy Deployment

With renewable energy now cheaper than fossil fuels, expanding solar- and wind-powered generation is key to replacing fossil fuels and reaching zero emissions.

According to Princeton University, for net-zero emissions by 2050, the U.S. needs to add more than 50 gigawatts of solar capacity annually from 2022 to 2035. That is significantly higher than the 13 gigawatts installed in 2021.

#2: Support Clean Energy with Grid Expansion

With the U.S. power grid aging, new high-voltage transmission capacity is essential for transporting electricity from remote solar and wind farms to centers of demand.

From 2013 to 2020, U.S. transmission capacity grew by just 1% annually. To align with the net-zero pathway, the pace of expansion needs to more than double through 2030.

Here’s how transmission expansion could affect U.S. greenhouse gas (GHG) emissions, as modeled by Princeton:

Transmission Expansion RateProjected GHG Emissions in 2030% Change in Emissions vs. 2021
1% per year4.6 billion tonnes-18%
1.5% per year4.0 billion tonnes-29%
2.3% per year3.8 billion tonnes-32%

Source: Princeton University – Zero Lab

With a 2.3% annual growth in transmission capacity, U.S. GHG emissions could achieve a 32% reduction from the 5.6 billion tonnes emitted in 2021.

#3: Invest in Nuclear Power and Battery Storage

The intermittent nature and low reliability of wind and solar power generation pose a challenge for the energy transition.

Battery storage systems and nuclear power can solve the intermittency problem by supplying clean electricity when wind and solar generation falls.

For example, storage systems can store excess solar power that is produced during sunny periods of the day, and supply it in the evening when solar generation dips. Meanwhile, nuclear power plants can supply electricity around the clock, acting as a clean baseload power source.

Towards a Carbon-free U.S. Economy

New renewable capacity, transmission expansion, and reliable backup sources are key to unlocking a carbon-free power sector.

Together, these three building blocks form the foundation for economy-wide emissions reduction and net-zero emissions by 2050.

Click here to learn more about how electric utilities and the power sector can lead on the path toward decarbonization.

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