Sensitivity of Natural Gas Deployment in the US Power Sector to Future Carbon Policy Expectations

Daniel Steinberg, Bryan Mignone, Sharon Showalter, Frances Wood, Haewon McJeon

Research output: Contribution to journalArticlepeer-review

14 Scopus Citations


One option for reducing carbon emissions in the power sector is replacement of coal-fired generation with less carbon-intensive natural gas combined cycle (NGCC) generation. In the United States, where there is abundant, low-cost natural gas supply, increased NGCC deployment could be a cost-effective emissions abatement opportunity at relatively modest carbon prices. However, under scenarios in which carbon prices rise and deeper emissions reductions are achieved, other technologies may be more cost-effective than NGCC in the future. In this analysis, using a US energy system model with foresight (a version of the National Energy Modeling System or “NEMS” model), we find that varying expectations about carbon prices after 2030 does not materially affect NGCC deployment prior to 2030, all else equal. An important implication of this result is that, under the set of natural gas and carbon price trajectories explored here, myopic behavior or other imperfect expectations about potential future carbon policy do not change the natural gas deployment path or lead to stranded natural gas generation infrastructure. We explain these results in terms of the underlying economic competition between available generation technologies and discuss the broader relevance to US climate change mitigation policy.

Original languageAmerican English
Pages (from-to)518-524
Number of pages7
JournalEnergy Policy
StatePublished - Nov 2017

Bibliographical note

Publisher Copyright:
© 2017 ExxonMobil Research and Engineering Company, OnLocation, Inc., Pacific Northwest National Laboratory and National Renewable Energy Laboratory

NREL Publication Number

  • NREL/JA-6A50-67242


  • Climate change mitigation
  • Energy modeling
  • Energy system transformation
  • Natural gas


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