CHEAPER AND CLEANER: Using the Clean Air Act to Sharply Reduce Carbon Pollution from Existing Power Plants, Delivering Health, Environmental and Economic Benefits
Dec 24, 2015
CHEAPER AND CLEANER:Using the Clean Air Act to Sharply Reduce Carbon Pollution from Existing Power Plants, Delivering Health, Environmental and Economic BenefitsMarch 2014 Update
“We limit the amount of toxic chemicals like mercury and sulfur and arsenic in our air or our water, but power plants can still dump unlimited amounts of carbon pollution into the air for free. That’s not right, that’s not safe, and it needs to stop.”-President Obama, June 25th, 2013
CLOSING THE POWER PLANT CARBON POLLUTION LOOPHOLE:SMART WAYS THE CLEAN AIR ACT CAN CLEAN UP AMERICA’SBIGGEST CLIMATE POLLUTERS
2
THE TIMELINE
January 20th End of President Obama's second term. 2017
January 20th Start of President Obama's second term.June 25th President Obama announces Climate Action Plan.September 20th EPA proposes carbon pollution standards for future power plants.
2013
May 9th End of public comment period for future power plant proposal. June 1st EPA to propose guideline for carbon pollution standards for existing
power plants. June-September Public comment period on existing power plant proposal.
2014
June 1st EPA to finalize power plant carbon pollution standards.2015
June 30th States to submit implementation plans for existing power plants to EPA.
July-December EPA reviews state plans for compliance with its guideline.2016
3
EPA proposes “emission guideline” June 2014, final June 2015.
Guideline includes performance standard and compliance provisions.
States have until June 2016 to adopt and submit state plans. If a state submits no plan, or one EPA cannot approve, EPA must issue a federal plan.
EPA CO2 Emissions Guideline & State Plans
THE CLEAN AIR ACT AND EXISTING POWER PLANTSTHE “101” ON 111 (d)
“Source-based” approach limited to options plants can do “within the fenceline” (e.g. heat-rate improvements) – yields limited reductions, higher costs
“System-based” approach includes all options that reduce emissions –yields deeper reductions, lower costs
Heat-rate improvements Shifting generation from coal to gasIncreasing zero -emission power (renewables and nuclear) Increasing energy efficiency
“Best System of Emission Reduction”
4
State-specific fossil-fleet average CO2 emission rates (lbs/MWh) for 2020 and 2025
Calculated by applying benchmark coal and gas rates to each state’s baseline (2008-2010) fossil generation mix
Averaging allowed among all fossil units in state (including new units subject to the 111(b) standard)
States may opt in to interstate averaging or credit trading
Credit for incremental renewables and energy efficiency (equivalent to adding MWhs to denominator in calculating emission rate for compliance purposes)
NRDC PROPOSALSYSTEM-BASED, STATE SPECIFIC STANDARDS
States may adopt alternative plans, including mass-based standards, provided they achieve equivalent emission reductions
5
STATES ALLOWED FLEXIBLE COMPLIANCE OPTIONS
Heat rate reductions Cleaner power sources More renewables Investments in efficiency
6
Reference Case
Moderate Case,Constrained Efficiency
Ambitious Case,Full Efficiency
Ambitious Case,Constrained Efficiency, PTC
Ambitious Case,Constrained Efficiency
Moderate Case,Full Efficiency
NRDC SPECIFICATIONSLIST OF SCENARIOS
7
AEO 2013 demand projectionsOnshore wind costs: DOE/LBL 2012 Wind Technologies ReportNuclear units re-licensed
All Cases
NRDC SPECIFICATIONSLIST OF SCENARIOS
Full Efficiency Cases: 482 TWh available in 2020 (Synapse)Constrained Efficiency Cases: 241 TWh available in 2020
Efficiency Assumptions
Ambition Assumptions
8
9
EE Program Costs (cents/kWh) 2013-2020 2021-2030
Low 2.3 2.6
Middle 2.6 2.9
High 3.2 3.5
Same energy efficiency potential (maximum MWhs saved) as in 2012 analysis
Divided evenly into three cost blocks in each region, 482 TWh in total
Energy Efficiency Quantity Assumptions
Costs apply nationwide, do not vary across regions
Derived based on utility program costs from Synapse and relative values from LBNL cost curve to estimate costs of each block
Middle cost block is equal to the Synapse utility program cost
Customer contribution at 45% of total cost is included in cost-benefit calculations
Energy Efficiency Cost Assumptions
NRDC SPECIFICATIONSSIMPLE ENERGY EFFICIENCY SUPPLY CURVE
2012 Actual 2020 Reference
NRDC POLICY CASES vs REFERENCE CASEGENERATION MIX: 2012 vs. 2020 REFERENCE CASE
10
NRDC POLICY CASES vs REFERENCE CASEPROJECTED GENERATION MIX IN 2020
11
12
NRDC POLICY CASES vs REFERENCE CASEEMISSIONS 2014-2025
Historical
Reference Case
Moderate, Constrained Efficiency
Moderate, Full Efficiency
Ambitious, Constrained Efficiency
Ambitious, Full Efficiency
Ambitious, Constrained Efficiency, PTC
-
500
1,000
1,500
2,000
2,500
3,000
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
CO2 E
mis
sion
s (s
hort
tons
)
NRDC POLICY CASES vs REFERENCE CASEEMISSIONS REDUCTIONS IN 2020: CO2 SO2 NOx
13
NRDC POLICY CASES vs REFERENCE CASECOSTS AND BENEFITS FROM REDUCED EMISSIONS IN 2020
14
STATE EMISSION RATE TRAJECTORIES UNDER NRDC POLICYAMBITIOUS CASES 2020 AND 2025
15
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 -
500
1,000
1,500
2,000
2,500
Oregon Washington Idaho Montana California Colorado
Lbs/
MW
h
WESTERN REGIONAL RESULTSGENERATION MIX IN 2020
16
WESTERN REGIONAL RESULTSEMISSION REDUCTIONS IN 2020: CO2 SO2 NOx
17
PNW AND CA+OTHERWEST REGIONAL RESULTSCO2 CREDIT PRICES ($/Ton)
18
2020 2025
Moderate Full Efficiency
CA + OTHERWEST 8.42 9.59
PNW 10.48 11.58
Moderate Constrained
Efficiency
CA + OTHERWEST 12.97 14.32
PNW 16.59 18.43
Ambitious Full Efficiency
CA + OTHERWEST 11.19 11.56
PNW 10.48 11.58
Ambitious Constrained
Efficiency
CA + OTHERWEST 27.90 32.15
PNW 16.80 18.46
Ambitious Constrained
Efficiency, PTC
CA + OTHERWEST 15.05 17.40
PNW 13.42 15.09
Exporter states
Importer states
A multi-state compliance agreement would allow each state to plan around utility portfolios, whether or not they cross state lines
INTERSTATE ISSUES FOR CONSIDERATION
19
Power leaves the state, emissions remainStates exporting to CA: emissions already counted under AB-32?
Ability to select compliance pathways potentially limited by decisions in exporting states
Changes in out of state purchases reflected?Out of state renewables and REC purchases?
The Northwest Power and Conservation Council analyze three pathways to ~35% emissions reductions by 2029 for the region, including imported power
All scenarios included 5900 MW of additional Energy Efficiency
HIGHER AND LOWER COST OPTIONS TO REACH THE SAME EMISSIONS LEVELS: NORTHWEST EXAMPLE
20
$45/ton carbon tax: 14% revenue requirement increaseCap and trade with free allocation: 2% revenue requirement increasePhased coal retirement: 15% revenue requirement increase
[email protected]@nrdc.org