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Power Sector Opportunities for Reducing Carbon Dioxide Emissions: Colorado

President Obama announced the first-ever National Climate Plan for the United States in June 2013. Under the plan, the U.S. Environmental Protection Agency (EPA) will set carbon pollution standards for power plants. In September 2013, EPA introduced emissions standards for new power plants and is expected to announce standards for existing plants in 2014. Once EPA establishes those standards, states will develop and implement their own plans to achieve the necessary emissions reductions.

In this fact sheet, WRI examines how Colorado can use its existing policies and infrastructure to reduce power plant emissions.

Read about additional analyses in WRI’s fact sheet series, Power Sector Opportunities for Reducing Carbon Dioxide Emissions.

Executive Summary

WRI analysis finds that Colorado can reduce its CO2 emissions 29 percent below 2011 levels by 2020. These reductions would meet or exceed moderately ambitious EPA power plant emissions standards. Although EPA has not yet announced what its power plant emissions standards will look like, WRI based its analysis on two hypothetical standards. Under these scenarios, Colorado would be required to reduce its CO2 emissions in the range of 28 to 37 percent below 2011 levels by 2020.

CO2 reduction opportunities using existing policies include:

  • Meeting renewable energy targets. Colorado has a renewable energy standard in place, requiring some of the electricity sold by its electricity producers to come from renewables: 30 percent for investor-owned utilities, 20 percent for the largest electric cooperatives, and 10 percent for smaller electric cooperatives and large municipalities. Meeting this requirement by adding new renewable generation in Colorado will reduce CO2 emissions by 7 percent below 2011 levels in 2020.

  • Meeting energy efficiency targets. Colorado’s existing efficiency standard requires utilities to implement programs that help customers save energy. Meeting this standard can reduce Colorado’s CO2 emissions by 5 percent below 2011 levels in 2020.

CO2 reduction opportunities using available infrastructure include:

  • Using more combined heat and power (CHP). Colorado has the potential to use more CHP systems—which use waste heat to generate electricity more efficiently than the average power plant—at sites like universities, hospitals, and manufacturing facilities. Increasing the use of CHP by about 30 percent could reduce CO2 emissions by 2 percent below 2011 levels in 2020.

  • Increasing the use of existing natural gas plants. Colorado’s most efficient natural gas plants–combined cycle (NGCC) units—generated much less electricity than they were capable of producing in 2011. Running existing NGCC plants at 75 percent can reduce CO2 emissions by 15 percent below 2011 levels in 2020.

  • Increasing existing coal plant efficiency. Existing coal plants could save energy by upgrading their equipment and making other operational improvements. Increasing coal plant efficiency by 2.5 percent could reduce CO2 emissions by 1 percent below 2011 levels by 2020.

Colorado is in a good position to comply with moderately ambitious standards for existing power plants if it builds off its progress to date. Weakening or repealing existing measures would make meeting emissions standards more difficult. Taking additional action could help the state achieve greater emissions reductions and adhere to ambitious standards, should EPA pursue them. For example, expanding the existing energy efficiency standard to achieve annual energy savings of 2 percent per year at all utilities is a cost-effective way to position the state to achieve stringent standards in the near- to medium-term.

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