In the electric power sector, “carbon intensity” is defined as the amount of carbon emitted per unit of electricity; a common measure is metric tons of CO2 per megawatt-hour. Industry-wide, one can divide total CO2 emissions by total power generation to calculate carbon intensity.
Electricity demand is a function of population, per-capita GDP growth, and electricity per unit of GDP. Since population and per-capita GDP tend to grow over time, they are upward forces in increasing electricity demand. Electricity per unit of GDP is tempered by changes in electricity intensity; it goes down with greater efficiency (e.g., LED bulbs replacing incandescent bulbs), but can also go up if electricity expands into new applications (e.g., electric vehicles).
Annual Energy Outlook 2023 projects growth in electricity sales through the year 2050, averaging about 0.7% per year. This is not substantially different from the growth rate projected in AEOs from recent years. With this growth, absent a change in carbon intensity, CO2 emissions would grow in lockstep, resulting in 2050 emissions over 20% higher than in 2022. Climate-wise … not good.
But carbon intensity in the electric power sector has changed dramatically in recent years, and is projected to continue doing so. In 2005, carbon intensity averaged 0.62 metric tons CO2 per MWH, reflecting a generation mix dominated by fossil fuels, particularly coal. By 2022, the carbon intensity had fallen about 39%, to about 0.38 metric tons CO2 per MWh. (In other words, charging your cellphone is now 39% less carbon-intensive!) This improvement was initially driven by natural gas-fired generation displacing coal, and more recently by rapid growth in wind and solar.
Improvements in electricity carbon intensity are projected to continue, and this is leading to lower future CO2 emissions. In recent AEOs, this improvement was gradual, ending up by 2050 at 0.20 to 0.30 metric tons CO2 per MWh. But as seen in the chart below, AEO2023 is projecting steep improvements, reaching 0.14 metric tons CO2 per MWh in 2050, less than one-fourth the 2005 intensity. Sparked largely by the BIL, IRA, and technology and price improvements, renewable capacity soars, accounting for 60% of total generation by 2050. As a result, projected power sector emissions in 2050 would be more than 70% below their 2005 peak.