Fossil fuels continue to dominate heat and electric power production. Electricity generation accounts for 2,100MtC/yr or 37.5% of global carbon emissions¹⁰. Baseline scenarios without carbon emission policies anticipate emissions of 3,500 and 4,000MtCeq for 2010 and 2020, respectively. In the power sector, low-cost combined cycle gas turbines (CCGTs) with conversion efficiencies approaching 60% for the latest model have become the dominant option for new electric power plants wherever adequate natural gas supply and infrastructure are available. Advanced coal technologies based on integrated gasification combined cycle or supercritical (IGCCS) designs potentially have the capability of reducing emissions at modest cost through higher efficiencies. Deregulation of the electric power sector is currently a major driver of technological choice. Utilization of distributed industrial and commercial combined heat and power (CHP) systems to meet space heating and manufacturing needs could achieve substantial emission reductions. The further implications of the restructuring of the electric utility industry in many developed and developing countries for CO₂ emissions are uncertain at this time, although there is a growing interest in distributed power supply systems based on renewable energy sources and also using fuel cells, micro-turbines and Stirling engines.

The nuclear power industry has managed to increase significantly the capacity factor at existing facilities, which improved their economics sufficiently that extension of facility life has become cost effective. But other than in Asia, relatively few new plants are being proposed or built. Efforts to develop intrinsically safe and less expensive nuclear reactors are proceeding with the goal of lowering socio-economic barriers and reducing public concern about safety, nuclear waste storage, and proliferation. Except for a few large projects in India and China, construction of new hydropower projects has also slowed because of few available major sites, sometimes-high costs, and local environmental and social concerns. Another development is the rapid growth of wind turbines, whose annual growth rate has exceeded 25% per year, and by 2000 exceeded 13GW of installed capacity. Other renewables, including solar and biomass, continue to grow as costs decline, but total contributions from non-hydro renewable sources remain below 2% globally. Fuel cells have the potential to provide highly efficient combined sources of electricity and heat as power densities increase and costs continue to drop. By 2010, co-firing of coal with biomass, gasification of fuel wood, more efficient photovoltaics, off-shore wind farms, and ethanol-based biofuels are some of the technologies that are capable of penetrating the market. Their market share is expected to increase by 2020 as the learning curve reduces costs and capital stock of existing generation plants is replaced.

Physical removal and storage of CO₂ is potentially a more viable option than at the time of the SAR. The use of coal or biomass as a source of hydrogen with storage of the waste CO₂ represents a possible step to the hydrogen economy. CO₂ has been stored in an aquifer, and the integrity of storage is being monitored. However, long-term storage is still in the process of being demonstrated for that particular reservoir. Research is also needed to determine any adverse and/or beneficial environmental impacts and public health risks of uncontrolled release of the various storage options. Pilot CO₂ capture and storage facilities are expected to be operational by 2010, and may be capable of making major contributions to mitigation by 2020. Along with biological sequestration, physical removal and storage might complement current efforts at improving efficiency, fuel switching, and the development of renewables, but must be able to compete economically with them.

The report considers the potential for mitigation technologies in this sector to reduce CO₂ emissions to 2020 from new power plants. CCGTs are expected to be the largest provider of new capacity between now and 2020 worldwide, and will be a strong competitor to displace new coal-fired power stations where additional gas supplies can be made available. Nuclear power has the potential to reduce emissions if it becomes politically acceptable, as it can replace both coal and gas for electricity production. Biomass, based mainly on wastes and agricultural and forestry by-products, and wind power are also potentially capable of making major contributions by 2020. Hydropower is an established technology and further opportunities exist beyond those anticipated to contribute to reducing CO₂ equivalent emissions. Finally, while costs of solar power are expected to decline substantially, it is likely to remain an expensive option by 2020 for central power generation, but it is likely to make increased contributions in niche markets and off-grid generation. The best mitigation option is likely to be dependent on local circumstances, and a combination of these technologies has the potential to reduce CO₂ emissions by 350-700MtC by 2020 compared to projected emissions of around 4,00MtC from this sector.

HFC and, to a lesser extent, PFC use has grown as these chemicals replaced about 8% of the projected use of CFCs by weight in 1997; in the developed countries the production of CFCs and other ozone depleting substances (ODSs) was halted in 1996 to comply with the Montreal Protocol to protect the stratospheric ozone layer. HCFCs have replaced an additional 12% of CFCs. The remaining 80% have been eliminated through controlling emissions, specific use reductions, or alternative technologies and fluids including ammonia, hydrocarbons, carbon dioxide and water, and not-in-kind technologies. The alternative chosen to replace CFCs and other ODSs varies widely among the applications, which include refrigeration, mobile and stationary air-conditioning, heat pumps, medical and other aerosol delivery systems, fire suppression, and solvents. Simultaneously considering energy efficiency with ozone layer protection is important, especially in the context of developing countries, where markets have just begun to develop and are expected to grow at a fast rate.

Based on current trends and assuming no new uses outside the ODS substitution area, HFC production is projected to be 370 kt or 170MtCeq/yr by 2010, while PFC production is expected to be less than 12MtCeq/yr. For the year 2010, annual emissions are more difficult to estimate. The largest emissions are likely to be associated with mobile air conditioning followed by commercial refrigeration and stationary air conditioning. HFC use in foam blowing is currently low, but if HFCs replaces a substantial part of the HCFCs used here, their use is projected to reach 30MtCeq/yr by 2010, with emissions in the order of 5-10MtCeq/yr.

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