US energy-related CO2 emissions are on track to hit their lowest levels since 1994 as a record 23GW of coal capacity is retiring and more renewables and natural gas are coming online, analysts Bloomberg New Energy Finance said.

Greenhouse gas emissions from the US power sector is set to drop 35 million tonnes, or 2%, compared to 2014, BNEF said in a new report.

“Industry should take notice of emissions levels in light of the Clean Power Plan, which is (mis)-understood to call for a ‘30% carbon cut from 2005 levels by 2030’. Our estimate puts 2015 emissions at 2,094MtCO2 – 16% below 2005 levels, and roughly 350Mt away from our 2030 ‘goal’,” the report said.

The year-on-year drop in emissions was bigger in 2012, but while that decrease was due to cyclical reasons, this year’s emissions cut is structural, with permanent reductions due to more renewable energy and less coal, BNEF said.

Emissions intensity will be lower this year than in any other of the 60 years there is data on, it said.

“Emissions can rise or fall year-to-year based on weather anomalies and volatile fuel prices – but in 2015, we’ll take a giant, permanent step towards de-carbonizing our entire fleet of power plants,” said William Nelson, BNEF’s head of analysis in North America.

A combination of ageing coal plants, low gas prices and new mercury regulations means that 7% of the United States coal fleet will retire this year, according to the report.

At the same time, 18GW – a new record – of renewable energy will come online, half of it in California. Generators will also burn more natural gas than ever before due to low prices.

By Stian Reklev – stian@carbon-pulse.com