EPA`s Clean Power Plan: Enhancing Sustainable Electricity through

EPA’s Clean Power Plan:
Enhancing Sustainable Electricity
through Climate Policy
Karen Palmer
Electricity is the Fuel for the Future
Fossil fuels dominate as source of electricity
BSER: Building Blocks Translate to State Goals
Technology/Building Block
1. Heat rate improvement (Avg.
Reduction for Coal)
2. Dispatch to existing and underconstruction NGCC
3. Dispatch to new clean electric
generation
4. Demand-side Energy Efficiency
(% reduction in demand from BAU MWh
sales)
Goal
Average nationwide goal for covered
sources (lbs/MWh)
Proposed Option 1
Alternative Option 2
6%
4%
Utilization of NGCC
up to 70% capacity factor
Utilization of NGCC
up to 65% capacity factor
Includes new nuclear generation under construction,
moderate deployment of new renewable generation,
and continued use of existing nuclear generation
3.0% / 10.7%
(2020 / 2030)
2.4% / 5.2%
(2020 / 2025)
Proposed Option 1
Proposed Option 2
25% to 30% below 2005
levels
20% to 25% below 2005
levels
Ø  The BSER is applied to state-specific data (e.g., existing generation
mix) to set state-specific emission rate goals.
4
0
Alabama
Alaska
Arizona
Arkansas
California
Colorado
Connecticut
Delaware
Florida
Georgia
Hawaii
Idaho
Illinois
Indiana
Iowa
Kansas
Kentucky
Louisiana
Maine
Maryland
Massachusetts
Michigan
Minnesota
Mississippi
Missouri
Montana
Nebraska
Nevada
New Hampshire
New Jersey
New Mexico
New York
North Carolina
North Dakota
Ohio
Oklahoma
Oregon
Pennsylvania
Rhode Island
South Carolina
South Dakota
Tennessee
Texas
Utah
Virginia
Washington
West Virginia
Wisconsin
Wyoming
BSER: State Targets in 2030 Under Option 1
lb/MWh
2,500
Target
Blocks 3 & 4
Block 2
Block 1
2,000
1,500
1,000
500
Source: US EPA Clean Power Plan proposal
Flexibility, Stringency, Legal Risk are Intertwined
Stringency and Legal Risk
Flexibility
Low
Coal boiler
heat rate
improvements
Increased
use of gas
Increased
use of
nonemitting
resources
High
End use
energy
efficiency
What if the building blocks are severed?
BB #2 is most stringent. BB #3 is negative!
National Electricity Sector CO2 Emissions (M tons)
2200
Baseline
2100
2000
BB1 Rate As Existing-SteamCoal Policy
1900
1800
BB2 Rate As Existing-Fossil
Policy
1700
1600
BB3 Rate As Existing-Fossil
+Renewable Policy
1500
1400
BB4 Rate As Existing-Fossil
+Renewable Policy w/ EE
1300
1200
2013
2016
2020
2025
2030
Based on preliminary results of the RFF Haiku Electricity Market Model
Emissions: Sources of Emissions Reductions (M short tons)
BB1 Rate As
Existing Coal Policy
BB2 Rate As
Existing Fossil Policy
2500
2500
2300
2300
2100
2100
1900
1900
1700
1700
1500
2013
2016
2020
2025
2030
1500
2013
BB3 Rate As Existing Fossil
+Renewables Policy
2016
2020
2025
2030
BB4 Rate As Existing Fossil
+Renewables Policy w/ EE
2500
2500
2300
2300
2100
2100
1900
1900
1700
1700
1500
1500
2013
2016
2020
2025
Demand Reduction
New CC Nat Gas
2030
EE Savings
Wind
2013
2016
2020
2025
Existing CC Nat Gas
Nuclear
2030
8
Opportunities for flexibility and cost effectiveness
Stay tuned for final EPA rule in 2015 and state plans in 2016-18.