Annual Energy Outlook 2007
With Projections to 2030
Energy Information Administration
Office of Integrated Analysis and Forecasting
U.S. Department of Energy
Washington, DC 20585
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The reference case projects a drop in national SO2 emissions from electricity generation, from 10.2 million short tons in 2005 to 3.6 million in 2030 (Figure 94). The reduction results from both use of lower sulfur coal and projected additions of flue gas desulfurization equipment on 143 gigawatts of capacity. SO2 allowance prices are projected to rise to $900 per ton in 2015, remain between $900 and $1,100 per ton until 2025, and then fall to $800 per ton in 2030. SO2 emissions projections are not greatly affected by economic growth assumptions. In the AEO2007 high growth case, with more coal-fired power plants added, the new plants are equipped for SO2 capture before beginning operation, which is less costly than retrofitting existing plants. Therefore, allowance prices do not differ by much from those in the reference case. Fuel price assumptions have a greater effect on SO2 allowance prices. More CTL plants are constructed in the high price case, and they are expected to have more efficient SO2 capture equipment than advanced pulverized coal plants. Thus, in the last few years of the projections, SO2 allowance prices are nearly 50 percent lower in the high price case than in the reference case, while the inflexible CAIR cap keeps emissions at nearly the same level in all cases.