EPA’s Proposed Clean Power Plan: Overview and State Goals JENNIFER MACEDONIA JUNE 2014
OVERVIEW OF PROPOSED CLEAN POWER PLAN
Main Features v EPA proposed numerical state goals • Represent EPA’s interpretation of best system of emission reduction
v Comment period, EPA will issue final guidelines/goals June 2015 v States develop and submit a plan regarding implementation • Individual or multi-state plans • Submit to EPA June 2016 or request 1-2 year extension
v State flexibility • Timing • Interim goal 2020-2029 (states choose trajectory to meet on average) • Final 2030 goal
• Rate-based or mass-based metric • States choose policy design • Wide range of strategies may count towards compliance
v EPA federal plan, if no state plan submitted/approved
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BUILDING BLOCKS OF EPA’S PROPOSED STATE GOALS
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Best System of Emission Reduction (BSER) is based on 4 Building Blocks
Coal Plant Heat Rate Improvement
Increased Use of Existing Natural Gas
Clean Generation (Renewable & Nuclear)
End-Use Energy Efficiency
EPA’S PROPOSED CLEAN POWER PLAN
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Available CO2 Reduction Options for Implementation v Range of CO2 reduction options may count towards compliance • • • •
Heat rate improvements (process & equipment) at affected EGUs Fuel switching/co-firing (natural gas & biomass) at affected EGUs Coal and oil/gas steam plant retirements Shifting dispatch from higher emitting to lower/zero emitting • • • • • •
more efficient coal-fired units existing, under construction, and new natural gas combined cycle existing and increased generation from non-hydro renewable energy new and increased hydro nuclear uprates and new nuclear under construction & 6% of existing nuclear generation [counts, but is in goal]
• End-use energy efficiency • Reductions in transmission & distribution losses • Carbon capture & storage (CCS)
BUILDING BLOCKS OF EPA’S PROPOSED STATE GOALS
STATE BASELINE End-Use Energy Efficiency
Clean Generation (Renewable & Nuclear)
Increased Use of Existing Natural Gas
Coal Plant Heat Rate Improvement
STATE GOAL average emission rate that reflects applica2on of BSER
EPA: “goals are intended to represent CO2 emission rates achievable by 2030 aDer 2020-‐2030 phase-‐in period on an output-‐ weighted-‐average basis collec2vely by all of a state’s affected EGUs, with certain computa2onal adjustments …to reflect the poten2al to achieve mass emission reduc2ons by avoiding fossil fuel-‐fired genera2on.”
BUILDING BLOCKS OF EPA’S PROPOSED STATE GOALS
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STATE GOAL
STATE BASELINE
Fossil emission rate =
fossil emissions (lbs. CO2) fossil genera4on (MWh)
The state fossil emission rate is calculated for all affected electric genera2ng units (EGUs) using 2012 data for exis2ng units and es2mated data for units under construc2on
BUILDING BLOCKS OF EPA’S PROPOSED STATE GOALS
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STATE GOAL
STATE BASELINE
baseline emission rate =
(fossil emissions)baseline (fossil genera4on)baseline + (RE + Nuc)baseline emissions (lbs. CO2)
=
(coal + oil/gas + NGCC + other)baseline (coal + oil/gas + NGCC + other)baseline + (RE + Nuc)baseline genera2on (MWh)
The baseline emission rate includes coal-‐fired steam, oil/gas steam, natural gas combined cycle (NGCC) and other (IGCC & CTs) exis2ng and under construc2on EGUs, plus historic genera2on from non-‐hydro renewable energy and “at risk” nuclear
BUILDING BLOCKS OF EPA’S PROPOSED STATE GOALS
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STATE GOAL
STATE BASELINE
Inserting Block 1 into State Goal
emissions (lbs. CO2)
coal + oil/gas + NGCC + other (coal + oil/gas + NGCC + other)baseline + (RE + Nuc)baseline genera2on (MWh)
Coal Plant Heat Rate Improvement
Building block 1: baseline coal emissions reduced 6% to represent “average fleet-‐wide opportunity for heat rate improvements … technically achievable at reasonable cost”
BUILDING BLOCKS OF EPA’S PROPOSED STATE GOALS
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STATE GOAL
STATE BASELINE
Inserting Block 2 into State Goal
emissions (lbs. CO2)
coal + oil/gas + NGCC + other Increased Use of Existing Natural Gas
Coal Plant Heat Rate Improvement
(coal + oil/gas + NGCC + other)baseline + (RE + Nuc)baseline genera2on (MWh)
Building Block 2: Emissions are reduced by amount to reflect shiS in dispatch from coal & oil/gas steam to exis4ng natural gas combined cycle up to 70% capacity factor
BUILDING BLOCKS OF EPA’S PROPOSED STATE GOALS
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STATE GOAL
STATE BASELINE
Inserting Block 3 into State Goal
Clean Generation (Renewable & Nuclear)
Increased Use of Existing Natural Gas
Coal Plant Heat Rate Improvement
emissions (lbs. CO2)
coal + oil/gas + NGCC + other (coal + oil/gas + NGCC + other)baseline + (RE + Nuc)goal genera2on (MWh)
Building Block 3: Future zero-‐carbon energy is reflected by replacing baseline renewable and nuclear genera4on with the state 2030 renewable genera4on target and under construc4on/preserved nuclear in the denominator
BUILDING BLOCKS OF EPA’S PROPOSED STATE GOALS
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STATE GOAL
STATE BASELINE End-Use Energy Efficiency
Inserting Block 4 into State Goal 2030 STATE GOAL =
Clean Generation (Renewable & Nuclear)
Increased Use of Existing Natural Gas
Coal Plant Heat Rate Improvement
emissions (lbs. CO2)
coal + oil/gas + NGCC + other (coal + oil/gas + NGCC + other)baseline + (RE + Nuc)goal + (EE)goal genera2on (MWh)
Building Block 4: future end-‐use energy efficiency is reflected by adding the avoided genera4on from the state’s 2030 energy efficiency target to the denominator
BUILDING BLOCKS OF EPA’S PROPOSED STATE GOALS
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STATE GOAL
STATE BASELINE DemandSide Energy Efficiency
Clean Generation (Renewable & Nuclear)
Increased Use of Existing Natural Gas
Coal Plant Heat Rate Improvement
2030 STATE GOAL = emissions (lbs. CO2)
re-‐dispatched fossil CO2 emissions baseline fossil genera@on + clean energy goal + EE goal genera2on (MWh)
BUILDING BLOCKS OF EPA’S PROPOSED STATE GOALS
Example:
MICHIGAN
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STATE BASELINE
End-Use Energy Efficiency
Clean Generation (Renewable & Nuclear)
= 1690 lbs/MWh
- 178 lbs/MWh -11%
- 69 lbs/MWh
-4% -12%
Increased Use of Existing Natural Gas
- 195 lbs/MWh
-5%
- 87 lbs/MWh Coal Plant Heat Rate Improvement
31% below state baseline
STATE GOAL
= 1161 lbs/MWh
Source: Numbers calculated from pg. 25 of the TSD: Goal Computa4on. Percent reduc4ons represent the building block emission rate/baseline emission rate.
Proposed State Goals Building Block 1: Heat Rate Improvements Coal Plant Heat Rate Improvement
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BUILDING BLOCKS OF EPA’S PROPOSED STATE GOALS
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Building Block 1: Heat Rate (HR) Improvements v State goals reduce average HR of coal-fired EGUs by 6%
Examples:
Missouri
Mississippi
Baseline Coal ER
2,085 lbs/MWh
2,494 lbs/MWh
-‐6% Coal ER
-‐126 lbs/MWh
-‐150 lbs/MWh
Adjusted Coal ER
1,959 lbs/MWh
2,344 lbs/MWh
Baseline ER
1,963 lbs/MWh
1,093 lbs/MWh
-‐6% Coal ER
-‐114 lbs/MWh
-‐22 lbs/MWh
Block 1 % Change
-‐6%
-‐2%
Genera4on (MWh)
Coal Oil Gas-‐ Combined Cycle Gas-‐ Combus4on Turbine Hydro Nuclear Wind Other
80% coal
55% Gas
Sources: EPA Technical Support Documents: Goal Computation Appendix 1 & 2; Goal Computation pg. 25
Proposed State Goals Building Block 2: Re-dispatch to existing natural gas combined cycle
Increased Use of Existing Natural Gas
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BUILDING BLOCKS OF EPA’S PROPOSED STATE GOALS
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Building Block 2: Re-dispatch to Existing Natural Gas v Displaced coal-fired & oil/gas steam generation from increased generation at existing NGCC up to 70% capacity factor (CF)
Examples:
Arkansas
Indiana
NGCC Capacity
5,588 MW
2,768 MW
2012 Genera4on %
44% coal/24% NGCC
80% coal/12% NGCC
2012 Capacity %
31% coal/31% NGCC
65% coal/9% NGCC
NGCC Capacity Factor
32% → 70%
53% → 70%
Re-‐dispatched NGCC
34,361,954 MWh
17,018,034 MWh
Baseline ER
1,634 lbs/MWh
1,924 lbs/MWh
Re-‐dispatched NGCC
-‐496 lbs/MWh
-‐45 lbs/MWh
% change
-‐30%
-‐2%
Genera4on (MWh)
Coal Oil Gas-‐ Combined Cycle Gas-‐ Combus4on Turbine Hydro Nuclear Wind Other IGCC
44% coal
80% coal
Sources: EPA Technical Support Documents: Goal Computation Appendix 1 & 2; Goal Computation pg. 25
Proposed State Goals Building Block 3: Clean Generation Renewable generation Nuclear generation Clean Generation (Renewable & Nuclear)
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BUILDING BLOCK 3 OF STATE GOALS: CLEAN GENERATION
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Renewable Energy (RE) Generation v EPA evaluated state potential to generate from RE in 2030 • •
State RE potential based on ability to ramp up towards regional average States <regional average make annual progress (growth rate) • By 2030 RE goal, ½ of states still below regional average RE generation
•
States ≥ regional average not expected to do more, but get credit if they do • 5 states already reached or surpassed RE target (IA, ME, MN, ND, SD) North Central & South Central: wind
West: geothermal & concentra4ng solar
Northeast: off-‐shore wind, biopower, solar 25%
15%
21%
16% East Central & Southeast: biopower & rooSop solar PV 20%
10%
10%
10%
Hydro-‐power is not included in the RE regional averages or targets
x% = EPA’s regional average RE (Adjusted 2020 RES/RPS)
BUILDING BLOCK 3 OF STATE GOALS: CLEAN GENERATION
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State 2030 RE Generation Target • By 2030 Final RE target, ½ of states still below regional average RE • 5 states already reached or surpassed RE target (IA, ME, MN, ND, SD) 25%
15% 10%
15%
15%
21% 18% 21%
21% 7%
4%
19%
15%
21%
21%
11%
15%
11% 20% 20%
7%
9%
7%
3% 7%
11%
6% 16%
14%
2% 6% 10%
9%
10%
16% 10%
12% 16%
10% x% = EPA’s regional average RE (Adjusted 2020 RES/RPS)
7%
2%
9%
10%
10%
10%
24%
18%
16%
16%
15%
20% 20%
25%
25%
21%
% = 2030 RE target (as % of total 2012 genera4on)
BUILDING BLOCK 3 OF PROPOSED STATE GOALS: CLEAN GENERATION
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Nuclear generation v Building Block 3 nuclear generation includes: • Projected generation (90% CF) from completing under construction • Watts Barr 2 in Tennessee • Vogtle 3-4 in Georgia • Summer 2-3 in South Carolina
• Avoiding retirement of ≈6% percent of existing “at risk” capacity Examples: State
2012 Nuclear Fleet* (MW)
At-‐Risk Nuclear Capacity (MW)
At-‐Risk Nuclear Genera@on (GWh)
Illinois
11,486
671
5,305
Michigan
3,957
231
1,828
Minnesota
1,819
106
840
Mississippi
1,368
80
632
Wisconsin
1,184
69
547
BUILDING BLOCK 3 OF STATE GOALS: CLEAN GENERATION
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Building Block 3: Renewable and Nuclear Generation Examples:
Minnesota
North Dakota
Illinois
Renewable Energy Baseline (2012) % RE Baseline RE gen 2030 RE gen target 2030 % RE genera4on target
18% 9,454 GWh 7,889 GWh 15%
15% 5,280 GWh 5,460 GWh 15%
4% 8,373 GWh 17,818 GWh 9%
Nuclear Energy At risk Nuc gen Under construc4on nuclear
840 GWh 0
0 0
5,305 GWh 0
925 3%
978 -‐1%
1540 -‐7%
Contribu@on to State Goal Baseline ER Block 3 (RE & Nuc): % Change
Source: EPA Technical Support Document: GHG Abatement Measures; Table 4.8 p4-‐27, Table 4.9 p4-‐29, and Table 4.10 p4-‐34. EPA TSD: State Goal Data Computa4on Appendix 1
Proposed State Goals Building Block 4: End-use Energy Efficiency End-use Energy Efficiency
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BUILDING BLOCK 4 OF STATE TARGETS
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Building Block 4: End-use Energy Efficiency v Increase state EE to reach 1.5% annual incremental savings •
States <best practice level are given time to ramp up (0.2%/yr)
•
States ≥ best practice level not required to (but get credit if they) do more
Examples:
Annual EE Savings as % of Retail Sales State Indiana Iowa Kentucky Louisiana
Incremental Savings 2017 2020 2030 0.57% 1.02% 0.22% 0.00%
1.17% 1.50% 0.82% 0.60%
1.50% 1.50% 1.50% 1.50%
Net Cumula@ve Savings 2020 2030 3.20% 4.65% 1.91% 1.14%
11.11% 11.66% 10.02% 9.33%
Source: EPA Technical Support Document: GHG Abatement Measures Appendix 5-‐5 (worksheet 1 and 2)
BUILDING BLOCK 4 OF STATE TARGETS
Building Block 4: End-use Energy Efficiency v Calculate net cumulative EE from annual incremental savings • • • •
Annual incremental savings = first year savings from EE investment EE investments continue to deliver savings for several years Cumulative savings includes savings from past EE investments EPA assumes an average measure life of 10 years and a linear decline in first year savings over 20 years
Net cumulative EE for a year (GWh) = (incremental savings ─ total expiring savings)year + (cumulative savings)last year
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STATE BASELINE RATES, BUILDING BLOCKS, AND STATE GOALS (CONTINUED ON NEXT SLIDE) State
Alabama Alaska Arizona Arkansas California Colorado Connec4cut Delaware Florida Georgia Hawaii Idaho Illinois Indiana Iowa Kansas Kentucky Louisiana Maine Maryland Massachuseqs Michigan Minnesota Mississippi
2012 Fossil Emission Rate (lb/ MWh) 1,518 1,368 1,551 1,722 900 1,959 844 1,255 1,238 1,598 1,783 858 2,189 1,991 2,197 2,320 2,166 1,533 873 2,029 1,001 1,814 2,013 1,140
Adjusted Baseline Rate (lb/MWh) 1,444 1,351 1,453 1,634 698 1,714 765 1,234 1,199 1,500 1,540 339 1,894 1,924 1,552 1,940 2,158 1,455 437 1,870 925 1,690 1,470 1,093
Percent Reduc@on from Baseline Rate by Building Block 1
2
3
4*
-‐4% -‐1% -‐4% -‐5% 0% -‐5% 0% -‐2% -‐3% -‐4% -‐2% 0% -‐6% -‐6% -‐6% -‐6% -‐6% -‐4% 0% -‐5% -‐1% -‐5% -‐6% -‐2%
-‐8% -‐8% -‐38% -‐30% -‐5% -‐17% -‐4% -‐17% -‐24% -‐14% 0% 0% -‐9% -‐2% -‐10% 0% -‐2% -‐25% -‐3% -‐3% -‐10% -‐12% -‐27% -‐24%
-‐9% -‐3% -‐2% -‐4% -‐7% -‐7% -‐12% -‐8% -‐6% -‐19% -‐2% -‐14% -‐7% -‐3% 11% -‐9% -‐1% -‐4% 6% -‐18% -‐17% -‐4% 3% -‐5%
-‐6% -‐14% -‐8% -‐5% -‐11% -‐7% -‐13% -‐4% -‐6% -‐6% -‐12% -‐19% -‐11% -‐9% -‐11% -‐8% -‐9% -‐7% -‐17% -‐11% -‐9% -‐11% -‐11% -‐5%
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Total Reduc@on from Baseline
2030 Goal (lb/MWh)
-‐27% -‐26% -‐52% -‐44% -‐23% -‐35% -‐29% -‐32% -‐38% -‐44% -‐15% -‐33% -‐33% -‐20% -‐16% -‐23% -‐18% -‐39% -‐14% -‐37% -‐38% -‐31% -‐41% -‐37%
1,059 1,003 702 910 537 1,108 540 841 740 834 1,306 228 1,271 1,531 1,301 1,499 1,763 883 378 1,187 576 1,161 873 692
2012 Fossil Adjusted Baseline Emission Rate (lb/ Rate State HEADER GOES HERE MWh) (lb/MWh)
Percent Reduc@on from Baseline Rate by Building Block
Total Reduc@on from Baseline
2030 Goal 27 (lb/MWh)
Missouri Montana Nebraska Nevada
2,010 2,439 2,162 1,091
1,963 2,246 2,009 988
1 -‐6% -‐6% -‐6% -‐2%
2 -‐5% 0% -‐4% -‐17%
3 -‐2% -‐8% -‐8% -‐8%
4* -‐9% -‐7% -‐9% -‐7%
-‐21% -‐21% -‐26% -‐35%
1,544 1,771 1,479 647
New Hampshire
1,119
905
-‐2%
-‐20%
-‐20%
-‐5%
-‐46%
486
New Jersey
1,035
928
-‐1%
-‐11%
-‐21%
-‐9%
-‐43%
531
New Mexico
1,798
1,586
-‐5%
-‐15%
-‐7%
-‐7%
-‐34%
1,048
New York
1,096
978
-‐1%
-‐15%
-‐18%
-‐11%
-‐44%
549
North Carolina
1,772
1,647
-‐5%
-‐19%
-‐7%
-‐8%
-‐40%
992
North Dakota Ohio Oklahoma
2,368 1,897 1,562
1,994 1,850 1,387
-‐6% -‐5% -‐4%
0% -‐4% -‐20%
-‐1% -‐9% -‐6%
-‐4% -‐9% -‐5%
-‐11% -‐28% -‐35%
1,783 1,338 895
Oregon
1,081
717
-‐2%
-‐19%
-‐16%
-‐11%
-‐48%
372
Pennsylvania
1,627
1,531
-‐5%
-‐4%
-‐15%
-‐7%
-‐31%
1,052
Rhode Island
918
907
0%
0%
-‐4%
-‐9%
-‐14%
782
South Carolina
1,791
1,587
-‐5%
-‐10%
-‐30%
-‐6%
-‐51%
772
South Dakota Tennessee Texas
2,256 2,015 1,420
1,135 1,903 1,284
-‐6% -‐6% -‐4%
-‐30% -‐5% -‐20%
15% -‐20% -‐9%
-‐14% -‐8% -‐5%
-‐35% -‐39% -‐38%
741 1,163 791
Utah
1,874
1,813
-‐6%
-‐11%
-‐3%
-‐7%
-‐27%
1,322
Virginia
1,438
1,302
-‐3%
-‐16%
-‐12%
-‐6%
-‐38%
810
Washington
1,379
756
-‐4%
-‐38%
-‐19%
-‐11%
-‐72%
215
West Virginia
2,056
2,019
-‐6%
0%
-‐10%
-‐3%
-‐20%
1,620
Wisconsin Wyoming
1,988 2,331
1,827 2,115
-‐5% -‐6%
-‐13% -‐1%
-‐6% -‐9%
-‐10% -‐3%
-‐34% -‐19%
1,203 1,714
PROPOSED STATE GOALS: RATE-BASED TO MASS-BASED CONVERSION
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Translating from rate-based to mass-based standards
State Goal rate-‐based (lbs CO2/MWh)
Apply State Goal as an average CO2 emission rate for state
non-‐plan projected scenario
Scenario includes impact of “on the books” requirements but excludes all ac2ons /programs intended to be enforceable under a state plan
State Goal mass-‐based (lbs CO2)
Projected CO2 emissions from affected EGUs for 2020-‐2029 and 2030, represent the interim and final mass-‐based State Goal
Background
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REFERENCE
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North American Regional Transmission Organizations
Source: FERC
GHG PERFORMANCE STANDARDS
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NSPS Rulemaking January 2014 Proposal*
January 2015 Final
NSPS Rulemaking June 2014 Proposal*
June 2015 Final
EPA Guidelines June 2014 Proposal
June 2015 Final
States Submit Plans June 2016- June 2018
Start of Compliance 2020
*Proposal signed by EPA Administrator 9/2014 and published in Federal Register 1/2014. Effective upon promulgation 1/2014. NSPS: New Source Performance Standard Source: Dates from Federal Register publication of 111(b) proposal, June 25, 2013 Presidential Memorandum; and June 2014 EPA Proposed Clean Power Plan
www.BipartisanPolicy.org Jennifer Macedonia jmacedonia@bipartisanpolicy.org