No COVID-19 Climate "Silver Lining" in the U.S. Power Sector: CO_2 Emissions Reductions Not Statistically Significant, Additional Risk to Coal Generators is Minimal
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Recent studies conclude that the global coronavirus (COVID-19) pandemic decreased power sector CO_2 emissions worldwide. We analyze the statistical significance of CO_2 emissions reductions in the U.S power sector from March through July 2020 and we present model-informed expectations of the likelihood of sustained reductions in CO_2 emissions. We use Gaussian process (GP) regression to assess whether CO_2 emissions reductions would have occurred with reasonable probability in the absence of COVID-19 considering uncertainty due to factors unrelated to the pandemic. We show that CO_2 emissions are lower than levels expected in the absence of COVID-19 for each month from March through July 2020 but that those monthly reductions are not statistically significant considering hypothesis tests at 5 predictions about whether COVID-19-related CO_2 emissions reductions will be sustained in the power sector, we assess the relative impacts of the pandemic on electricity generation (E) and on the carbon intensity of electricity supply (C/E). E is on average 2.9% lower than what we would expect in the absence of COVID-19 from March through July 2020. We expect E to rebound alongside a recovery of the U.S. economy. C/E is determined to be 2.7 than what we would expect in the absence of COVID-19 from March through July 2020. Reductions in C/E are mostly attributable to reductions in the share of coal-fired electricity generation. We analyze the expected profitability through 2021 of the 845 coal-fired power plant units operating in the U.S. We find that only 76 of those units, representing 1.3 capacity, were expected to be profitable prior to COVID-19 but are no longer expected to be profitable. We conclude that COVID-19 is unlikely to have a material impact on U.S. power sector CO_2 emissions in the long-run.
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