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With data centers consuming more electricity, the race to reduce emissions is on. After declining for two years straight, U.S. greenhouse gas emissions (GHG) increased an estimated 2.4% last year, according to Rhodium Group. Power sector emissions jumped 3.8%, fueled in part by growing electricity demand and a 13% increase in coal-fired electricity generation.
Individual states are looking for new ways to keep up with rising electricity demand while meeting their long-term clean energy goals. A new report from Clean Air Task Force (CATF) says giving those states a bigger role in planning and procuring clean energy resources could help. The approach could be especially useful in deregulated electricity markets, where existing market incentives may fall short.
“States in deregulated markets with clean energy targets need a way to supplement the market’s inherent shortsightedness and proactively identify what the electricity system needs years in advance,” CATF’s Kasparas Spokas said in the report. “State-led planning and procurement can give states the capacity to do that while keeping the benefits of competitive electricity markets.”
What Goes Into a State-Led Program?
According to CATF, cutting power sector carbon emissions quickly and affordably takes “long-lead-time technologies that are prone to development barriers, such as nuclear energy, geothermal, and long-duration energy storage.” While market prices and clean electricity standards have helped advance clean power deployment in deregulated electricity markets, it says they “don’t provide sufficient incentives to support projects with longer development timelines.”
Giving states a bigger role in energy planning could also help get long-delayed clean energy projects off the drawing board. CATF says these efforts would have to include:
- System needs assessments. A state agency (or similar government organization) performs periodic, scenario-based assessments to identify long-term system needs to achieve clean electricity standards (and other policy targets) and gaps in expected development.
- Technology development roadmaps. Roadmaps that identify, characterize and offer strategies and policy solutions to address technology development and investment barriers. These roadmaps also can incorporate non-electricity priorities of the state, such as around job creation, economic development and public health.
- Development mandates or state-led procurement. Based on the system needs assessment and gaps, state-mandated procurement targets for load serving entities or direct state procurement of resources that the state assesses to have long-term value for achieving clean electricity standards and local economic development goals to provide revenue certainty for investors that is not present in existing market-based mechanisms.
According to CATF, these three activities form an “iterative cycle” in which clean electricity standards define the goal and drive near-term deployment. “State-led planning also establishes long-term plans and market-driven development and state-led or -directed procurement ensure development of the projects needed to close the gap on decarbonization quickly and affordably,” it adds.
Illinois is already doing it. The state’s Clean and Reliable Grid Affordability Act was enacted in January 2026. The state will continue to study its power system through 2045, with an initial plan due by November 2026 that will directly inform the Illinois Power Agency’s procurements, state advocacy positions and transmission planning, CATF says.
California and New York also have state-led planning programs in place. New York published a state-led energy storage roadmap to assess development needs and barriers, along with a Blueprint for Consideration of Advanced Nuclear Energy Technologies that identified deployment barriers in the state (which is now developing a Master Plan for Responsible Advanced Nuclear Development).
No Small Task
Looking ahead, CATF sees state-led planning as a complement to the current wholesale energy markets and says that successful initiatives will have to be rooted into new policies, oversight regulations and expert capacity. “While this is no small task,” it adds, “versions of state-led planning already exist and offer learnings.”
