BPC Modeling Results: Projected Impact of Changing Conditions on the Power Sector

The electric power sector in the United States is facing a changing market environment—one that features low natural gas prices, rising coal prices, flattening electric demand, new environmental regulations, expanding renewable power, uncertainty about future carbon risk, and an aging coal fleet. This combination of factors continues to influence the relative competitive positions of all forms of electricity generation, as evidenced by recent shifts in dispatch resulting in a declining share of electricity generation from coal-fired generators, as well as infrastructure decisions including announced coal plant retirements, planned gas-fired and renewable capacity additions, and proposed retrofits.

To help understand the impacts of these changes, the Bipartisan Policy Center (BPC) has continued its ongoing effort begun several years ago to model and to analyze the power sector with ICF International’s Integrated Planning Model (IPM). This document is a follow-up to the power-sector analysis presented in the June 2011 BPC staff paper, Environmental Regulation and Electric System Reliability, specifically to the modeling results presented in that report’s “Appendix B: BPC Modeling Using ICF’s Integrated Planning Model.” This paper details the assumptions—including important updates on fuel price trends, electric demand projections, and final air regulations—and results from BPC’s recent analysis.

From BPC’s Blog

Projected Impact of Changing Conditions on Electricity Generation