Full Title: Changes in the Fuel Mix Used to Produce Power in the U.S.
Author(s): Michael E. Canes
Publisher(s): The Marshall Institute
Publication Date: 10/2012
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Over the years, there have been significant changes in the fuel mix used to generate electricity in the United States. Generally, this mix has become less carbon-intensive, relying less on coal and more on natural gas and renewable sources. Nevertheless, concerns over the environment and a desire to promote the emergence of “clean energy” industries have led a number of people to advocate policy measures to induce, if not compel, power suppliers in the United States to alter their fuel mix away from fossil fuels and towards non-carbon sources. For example, many states have established Renewable Portfolio Standards (RPSs), which compel power suppliers to utilize minimum percentages of renewable fuels that usually rise over time. At the federal level, President Obama has proposed a ‘clean energy standard’ and Senator Jeff Bingaman (D-New Mexico), Chairman of the Senate Energy Committee, recently introduced a RPS bill that would compel power suppliers everywhere in the country to meet that standard.
In this paper, we examine what actually has been happening over time with respect to the power producing fuel mix in the United States. The purpose is to see whether such mix already is being shaped by market forces that are driving it towards lower carbon content. If so, question arises whether there is any need for policy measures such as RPSs or subsidies for non-carbon sources. Further, as mandates or subsidies have substantial costs, question arises whether these costs are justified.