The President s Climate Action Plan and the Role of States

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1 The President s Climate Action Plan and the Role of States NCSL Webinar Energy Planning for Climate Regulations: Lowering the Cost of Cutting Carbon Judi Greenwald Deputy Director for Climate, Environment and Energy Efficiency Office of Energy Policy and Systems Analysis

2 Outline GHG emissions trends The President s Climate Action Plan (PCAP) State leadership in emissions reductions Power generation sector End-use sectors Cross-cutting EPA s questions for states DOE s questions for states 2

3 Million Metric Tons CO 2 e Recent emissions trends are consistent with climate goals 6,500 Annual Greenhouse Gas Emissions 1 6,000 5,500 5,000 4,500 4, Historical Business as Usual 17% Target US climate goal: Reduce emissions in the range of 17% below 2005 levels by Source: Draft U.S. Biennial Report. Includes energy CO 2, non-energy CO 2, non-co 2 GHGs, historical land-use, land-use change and forestry (LULUCF) sinks, and assumes static LULUCF sinks after

4 Several factors have driven recent emissions trends Federal actions since 2008 Other actions and trends Increased efficiency of cars and trucks (light duty fleet average requirement of 54.5 mpg by 2025) Set appliance efficiency standards for nearly 40 products Issued federal air pollution standards for the oil and natural gas industry Transformation of the natural gas industry and associated trends in natural gas prices Changes in patterns of economic growth State actions on multiple fronts Cut federal government carbon pollution Doubled generation from wind and solar sources 4

5 Falling costs of clean technologies are increasing deployment * * Costs include the Production Tax Credit Source: DOE (2013), Revolution Now The Future Arrives for Four Clean Energy Technologies. 5

6 New actions will be required to continue downward trend Major PCAP goals Cut carbon pollution in America Prepare the U.S. for worsening impacts of climate change Lead international efforts to address global climate change 6

7 New actions will be required to continue downward trend Major PCAP goals Cut carbon pollution in America Prepare the U.S. for worsening impacts of climate change Lead international efforts to address global climate change Selected US mitigation activities Cutting carbon pollution from power plants Promoting American leadership in RE Spurring investment in advanced fossil energy projects* Building a 21st-century transportation sector Establishing a new goal for energy efficiency standards* Expanding the President s Better Buildings Challenge* Developing an interagency methane strategy Instituting a federal Quadrennial Energy Review (QER)* *Activities for which DOE has a lead role. 7

8 Policies in many states are already reducing emissions Power generation sector Market-based carbon policies Emissions performance standards for new power plants Renewable Portfolio Standards (RPSs) Cleaner fossil generation End-use sectors Energy Efficiency Resource Standards (EERSs) and other EE programs Updated building codes Cross-cutting Public benefit funds Incentives to attract renewable energy technology companies 8

9 Generation sector policies

10 Market-based policies and emissions performance standards A price on carbon and state emissions performance standards for new power plants lower emissions and drive investment in clean energy technologies Source : C2ES. 10

11 Renewable and Alternative Portfolio Standards * Renewable Portfolio Standards (RPSs) provide market signals and certainty for companies to invest in clean energy technologies in certain states Source : DSIRE, C2ES, primary sources. * Clean Energy Standard 11

12 Financial incentives for Carbon Capture and Sequestration Financial incentives for carbon capture and sequestration (CCS) motivate deployment and research of cleaner fossil generation Source : DSIRE, C2ES. 12

13 Policies in end-use sectors

14 Energy Efficiency Resource Standards 29 states have some type of EERS program Ratepayer-funded EE programs overcome market barriers to cost-effective energy savings to save consumers money Source : primary sources, DSIRE, ACEEE. 14

15 Residential building codes States can update building codes and improve enforcement to stimulate growth of EE industries and construction, while reducing electricity load Source : DOE Building Technologies Program 15

16 Cross-cutting policies

17 Public benefit funds Public benefit funds can be used to enable energy efficiency and renewable energy deployment Source : DSIRE, C2ES, primary sources. 17

18 Attracting energy companies and jobs Approximately 20 states have or have had specific programs to attract renewable energy companies Tax credits for corporate income and property levies Tax exemptions and reductions Grants, loans and loan guarantees Examples Arizona Renewable Energy Tax Incentive Program provides incentives for the manufacturing of solar, geothermal, wind and other renewable energy components Kansas Solar and Wind Bond Financing Incentive allows for up to $5 million in bond financing for each eligible wind and solar manufacturing project Michigan Renewable Energy Renaissance Zone offers significant tax benefits to facilities that locate in these zones 18

19 EPA is seeking state input regarding the design of a program* to reduce GHGs from existing power plants under Clean Air Act Section 111(d) What is state and stakeholder experience with programs that reduce CO 2 emissions in the electric power sector? How should EPA set the performance standard for state plans? What requirements should state plans meet, and what flexibility should be provided to states in developing their plans? What can EPA do to facilitate state plan development and implementation? Public listening sessions this fall in 11 different cities. Find more information at: *For more background on EPA s questions for states please see: States can responses to these questions to EPA at carbonpollutioninput@epa.gov 19

20 DOE is gathering information on how to support states What tools, analysis and data are states currently using to develop strategies to reduce GHGs in the power sector and to build resilience to climate change? What additional tools, analysis and data would be helpful to develop strategies to reduce GHGs in the power sector from both supply and demand-side resources? What additional analysis and information would be helpful in developing resilience plans? 20

21 Appendix

22 U.S. Emissions by greenhouse gas and sector ~85% of emissions tied to energy Source: EPA, 2012, Inventory of U.S. Greenhouse Gas Emissions and Sinks

23 Cutting carbon pollution from power plants Climate plan directs EPA to complete standards for both new and existing power plants Revised draft rules for new plants released on September 20, 2013 Existing plant draft guidelines to states to be issued June 1, 2014 and finalized June 1, 2015 DOE Role: Technical assistance to EPA and other stakeholders Technology development 23

24 Promoting American leadership in renewable energy Double renewable energy generation by 2020 Accelerate clean energy permitting Expand and modernizing the electric grid DOE Role: Participate in interagency steering committee on energy corridor designations Make recommendations to the steering committee on energy corridor design Technology development 24

25 Spurring investment in advanced fossil energy projects DOE to issue an $8bn solicitation in (self pay) loan guarantee authority for advanced fossil energy projects under its Section 1703 loan guarantee program Draft solicitation issued July 3, 2013 Next steps: Comment period concluded Sept 9, 2013 Issue final text of solicitation Receive, evaluate and fund selected proposals 25

26 Building a 21st-century transportation sector Develop post-2018 fuel economy standards for heavy-duty vehicles building off of successful current standards and standards for light-duty vehicles Develop and Deploy advanced transportation technologies such as biofuels and electric vehicles DOE Role: Technology development 26

27 Establishing a new goal for energy efficiency standards Set goal for DOE s combined first and second term new minimum appliance efficiency standards to reduce emissions by at least 3 bn metric tons cumulatively by 2030 Recent NOPRs: Commercial refrigeration; walk-in coolers and freezers; metal halide lamp fixtures Next steps: Finalize rules according to statutory deadlines Work to increase energy savings potential of new or amended standards by updating and finalizing more effective test procedures 27

28 Expanding the President s Better Buildings Challenge DOE to expand the Better Buildings Challenge from commercial and industrial buildings to include multifamily housing The Administration will also launch the Better Buildings Accelerators, to support and encourage the adoption of State and local policies to cut energy waste Industrial Strategic Energy Management Accelerator Energy Data Accelerator Performance contracting Accelerator 28

29 Developing an interagency methane strategy Plan to form an interagency methane strategy between EPA, USDA, DOE, DOI, DOL, and DOT The interagency group will assess current emissions data, address data gaps, identify technologies and best practices for reducing emissions, and identify existing authorities and incentive-based opportunities to reduce methane emissions The Administration will work collaboratively with state government and the private sector to reduce methane emissions across multiple sectors 29

30 Instituting a Quadrennial Energy Review (QER) Institute a QER across all federal agencies led by DPC and OSTP and supported by a Secretariat at DOE The first QER will focus on infrastructure challenges, will identify the threats, risks, and opportunities for U.S. energy and climate security and will propose investments over a four-year planning horizon 30

31 DOE state policy analysis DOE and its national labs have a long history of providing state energy policy analysis Examples of recent reports include: Including Alternative Resources in State Renewable Portfolio Standards: Current Design and Implementation Experience (NREL) Renewable Energy Data Book (NREL) Assessing Natural Gas Energy Efficiency Programs in a Low-Price Environment (LBNL) Estimating impacts of warming temperatures on California's electricity system (LBNL) DOE is interested in pursuing new analysis to support states in designing effective climate change and clean energy policies 31

32 Cost of policies is decreasing due to cheaper clean technology In 2012, wind installations were the largest single source of new electric generation capacity in the U.S., accounting for 43% of new generation capacity Since 2008, total U.S. solar PV deployment has increased by a factor 10 and during the same time PV module costs have dropped over 75% In just the last year, prices for LED light bulbs have dropped by about 70%, and in the last four years deployment has increased by a factor of 50 EV battery costs have fallen 50% in the last four years, and in the first half of 2013, over twice as many EV s were sold in the U.S. than in the same period in 2012 Source: DOE (2013), Revolution Now The Future Arrives for Four Clean Energy Technologies. 32

33 DOE vulnerability report released in July 2013 Purpose of report: Respond to White House climate change adaptation initiative (E.O 15314); Supports President s Climate Action Plan Provide objective analysis of vulnerabilities to the U.S. energy sector - both positive and negative effects Identify opportunities for future actions Approach: Use existing peer-reviewed and USG research Hosted DOE Atlantic Council Climate Change and Extreme Weather: Vulnerability Assessment of the US Energy Sector workshop Scope: Focus on the U.S. energy sector Include exploration, production, refining, fuel transport, generation, delivery, and end-use 33

34 Recent events illustrate U.S. energy sector vulnerabilities Lower water levels: Reduced hydropower generation Cooling water intake or discharge too hot: Shutdown and reduced electricity generation from power plants Wildfires: Damaged transmission lines Flooding: Impacts on inland power plants Water restrictions due to drought: Potential limits on shale gas production Intense storms: Disrupted electricity generation and oil and gas operations Lower river levels: Restricted barge transportation of coal and petroleum products Source: DOE (2013), Energy Sector Vulnerabilities to Climate Change and Extreme Weather. 34

35 State and Local Climate Adaptation States are developing their own custom adaptation plans to prepare for location specific changes from climate change. Source : C2ES. 35