The Future of Coal-fired Generation: Challenging the EPA

Transcription

1 Association Of Women In Energy Power Matters Conference The Future of Coal-fired Generation: Challenging the EPA MARK OURADA INDEPENDENT CONSULTANT

2 Leadership A Leader is a Dealer in Hope Napoleon

3 Power Plants are the Largest Single Source of Greenhouse Gas Emissions Agriculture Commercial and Residential Electricity Production Production of Goods Transportation Primary Sources of U.S. Greenhouse Gas Emissions in 2013 Source: U.S. Environmental Protection Agency, Sources of Greenhouse Gas Emissions, July 21, 2015.

4 Snapshot of the U.S. Coal Fleet Provided 38 percent of electricity through November 2014 More than 460 coal units in 41 states have announced retirement Most retirements have been attributed to EPA policies $145 billion invested by 2016 to reduce conventional emissions SO2, NOx, PM have been reduced by 90% per kwh Sources: EIA (2015); individual company retirement announcements; Energy Ventures Analysis (2013); EPA Clean Air Markets Division (2013)

5 Carbon Dioxide Emissions are Down 15% Since 2005 Levels 2417 MMmt 2051 MMmt 1643 MMmt: 30% Emission Reduction Goal for 2030 Carbon Dioxide Emissions from Electric Power Sector, (Million Metric Tons of Carbon Dioxide) Source: U.S. Energy Information Administration, July 2015 Monthly Energy Review, July 28, 2015; Perry Lindstrom, Lower Electricity-Related CO2 Emissions Reflect Lower Carbon Intensity and Electricity Use, U.S. Energy Information Administration, October 23, 2014.

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8 Gradient Corporation THE PUBLIC HEALTH CONSEQUENCES OF AIR EMISSIONS FROM COAL- FIRED POWER PLANTS IN THE ST. LOUIS AREA 1. St. Louis has clean air - Ambient levels of fine particles, nitrogen dioxide, and sulfur dioxide are lower than required by (NAAQS) 2. Exposure to fine particles from St. Louis power plants is insignificant compared to other sources - The levels of exposure to fine particles from sources other than power plants are tens to hundreds of times greater than the exposure caused by St. Louis area power plants 3. Air pollution does not cause asthma - While air pollution has decreased substantially over the past few decades, the percentage of people diagnosed with asthma has increased 4. Claims about other adverse health effects are not reliable - Claims that premature mortality is caused by emissions from specific power plants are based on computer models that are oversimplified and assume that adverse health effects occur at particulate levels that are in compliance with EPA s health protective air quality standards

9 States Have Seven Years to Meet Initial Emission Reduction Goals States with extensions must submit plans to the Environmental Protection Agency States continue to follow the goal that was set States may begin submitting plans to the Environmental Protection Agency States must start cutting their carbon dioxide emissions Timeline for President Obama s Clean Power Plan Source: Alex Guillen, Obama Issues Landmark Climate Change Rule, August 3, 2015.

10 2030 Emission Goals by State, Percentage Reduction from 2012 Historic Emission Values WA CA OR NV ID UT MT WY CO ND SD NE KS MN IA MO WI IL IN MI KY OH WV PA VA NY VT NJ DE MD ME NH MA RI CT AZ NM OK AR TN SC NC 0-10% 11%-20% AK TX LA MS AL GA FL 21%-30% 31-40% 41-50% HI No data* *Vermont has no fossil-fuel electric power plants. Alaska and Hawaii have unique grid situations, and the EPA is still working on establishing their goals. Source: U.S. Environmental Protection Agency, Clean Power Plan State-Specific Fact Sheets, August 3, 2015; National Journal Research, 2015.

11 Reduction Emission Goals are Calculated Using a Formula WA Western Interconnection CA OR NV ID UT AZ MT WY CO NM ND SD NE KS OK MN IA MO AR WI IL IN MI TN KY OH WV SC PA VA NC NY VT DE MD ME NH MA CT RI NJ Eastern Interconnection MS AL GA AK Texas Interconnection TX TX LA FL Alternating Current Power Grids or Interconnections in the U.S. ( % of Coal ) Power Plants in the state ( ) ( )( ) = EPA Constant for one of the grid regions % of Natural Gas EPA Constant State s Emission + Power Plants in for one of the the state grid regions Reduction Goal Source: U.S. Department of Energy, Learn More About Interconnections, 2015; Brad Plumer, How Obama s Clean Power Plan Actually Works a Step-by-Step Guide, Vox, August 4, 2015.

12 Under a rate-based program, 46 states must reduce their CO 2 emissions by more than 10% WA MT ND ME OR ID WY SD MN WI MI NY NH MA RI CA NV AZ UT CO NM NE KS OK IA MO AR IL IN KY TN OH WV SC PA VA NC NJ DE MD MS AL GA TX LA FL Greater than 10% reduction from 2012 levels

13 The 22 biggest losers with emission reduction targets more stringent than under the proposed CPP. MT ND UT WY CO SD NE KS IA MO WI IL IN MI OH WV PA KY RI TN NM AL More stringent goal under final CPP

14 10 STATES THAT ARE THE BIGGEST LOSERS North Dakota was 11% but now is 45% (four times more stringent) Iowa was 16% but now is 42% (two-and-a-half times more stringent) Kentucky was 18% but now is 41% (more than twice as stringent) Wyoming was 19% but now is 44% (more than twice as stringent) Kansas was 23% but now is 44% (almost twice as stringent) Montana was 21% but now is 47% (more than twice as stringent) Indiana was 20% but now is 39% (twice as stringent) West Virginia was 20% but now is 37% (almost twice as stringent) Missouri 21% but now is 37% (76% more stringent) Nebraska 26% but now is 40% (50% more stringent)

15 If all the coal plants retiring due to the Clean Power Plan were replaced with utility-scale solar, a land area the size of 800,000 football fields would have to be covered with solar panels EPA projects that 38,000 MW of coal-fired electric generating capacity will retire due to the CPP (source: EPA) Because the sun doesn t always shine, approximately 25% of solar electric generating capacity is counted for reliability planning, while over 90% of the capacity of coal-fired generation is counted (source: NERC). Thus, each MW of retired coal capacity would require at least 3.5 MW of replacement solar. Consequently, 38,000 MW of retired coal capacity would require 133,000 MW of replacement solar because of reliability considerations. 133,000 MW of utility-scale solar would cover 1,064,000 acres or 800,000 football fields (NREL estimates 8 acres/mw for utility-scale photovoltaic solar).

16 A land area the size of 16 million football fields would be needed if wind turbines replace retiring coal plants due to the Clean Power Plan EPA projects that 38,000 MW of coal capacity will retire by 2030 because of the Clean Power Plan (source: EPA s RIA). Because wind is intermittent, less than 20% of its capacity is counted for reliability planning, while over 90% of the capacity of coal generation is counted (source: NERC). Thus, every MW of retired coal capacity would require at least 4.5 MW of wind to replace it, meaning that 38,000 MW would require 171,000 MW of replacement wind because of reliability considerations. The Grande Prairie wind farm being constructed in Nebraska and recently purchased by Berkshire Hathaway has a capacity of 400 MW and spans an area of over 50,000 acres, or 125 acres per MW (source: geronimoenergy.com). 171,000 MW of wind would require more than 21 million acres, or almost 34,000 square miles. This amount of land would be equivalent to 494 Districts of Columbia, or 16 million football fields, or it would cover almost the entire State of Indiana (35,870 square miles).

17 Family Energy Expenditures Family energy costs are rising, and family incomes are declining On average, half of the families in the U.S. (59 million households) take home less than $1,900 per month These families spend 17% of their take-home pay on energy Impacts of energy costs on low-income families: 24% went without food for at least one day 37% went without medical or dental care 34% did not fill a prescription or took less than the full dose

18 ANNUAL COST OF CLEAN AIR ACT Rules Note: Proposed CPP $60 $50 $41 - $73 billion $40 $30 $20 $10 billion $10 $7 billion $0 All Clean Air Act rules by 2010 MATS Clean Power Plan Annual cost of all Clean Air Act rules for the electric power sector promulgated by 2010 from U.S. EPA, The Benefits and Costs of the Clean Air Act from 1990 to 2020 (2011) at Table 3-2 (electric utility direct annual compliance costs were $6.6 billion (2006$) in 2010; this converts to $7.1 billion in 2010$). MATS annual cost from U.S. EPA, Regulatory Impact Analysis for the Final Mercury and Air Toxics Standards, December 2011 ($9.6 billion compliance cost in 2006$ converted to 2010$.) Cost of proposed Clean Power Plan from NERA analysis (2013$).

19 NERA Analysis of the Clean Power Plan PROPOSED RULE: 43 states will have double digit electricity price increases 14 states will have peak-year increases that exceed 20% Compliance costs of $366 billion to $479 billion over 15 years Cost to consumers will be $34 billion/yr to $48 billion/yr

20 NERA Analysis of clean Power Plan FINAL RULE EPA projects compliance costs of $3 to $4 billion per year Based on new assumption that CO emissions will be roughly 3.6 billion tons less from $430 trillion in GDP losses from Wiping out 25 years worth of GDP! To meet a global Greenhouse Gas Reduction for benefits claimed by 2100 the U.S. would have to reduce it s emissions to 1907 levels

21 Emission reductions from EPA s proposal and AEO 2014 are accumulated and scaled to projected emissions reductions and resulting climate effects from EPA s Regulatory Impact Analysis: Final Rulemaking for Light- Duty Vehicle Greenhouse Gas Emission Standards and Corporate Average Fuel Economy Standards, August 2012, page and FINAL CPP s CLIMATE EFFECTS MORE MARGINAL THAN UNDER PROPOSED RULE CO 2 concentrations will be reduced by 0.2% Global average temperature rise will be reduced by 1/100th of a degree F. Sea level rise will be reduced by 0.2 mm Two sheets of paper; Two $1 bills; or, One or two human hairs.

22 THE STATES line up 29 STATES say that EPA does not have the legal authority to regulate CO2 emissions from coal-fired power plants 30 STATES say that EPA cannot regulate outside the fence 29 STATES say that EPA should withdraw its proposal

23 Officials from 32 States oppose the EPA s proposed Clean Power Plan WA ME MT ND OR MN VT NH ID SD WI NY MA CA NV UT WY CO NE KS IA MO IL MI IN KY OH WV VA PA MD NJ D.C. DE RI CT NC TN AZ NM OK AR SC AL GA MS TX LA AK FL HI

24 More than 20 States (and counting) Prepare to Sue the EPA WA ME MT ND OR MN VT NH ID SD WI NY MA CA NV UT WY CO NE KS IA MO IL MI IN KY OH WV VA PA MD N J D.C. DE RI CT NC TN AZ NM OK AR SC AL GA MS TX LA AK FL HI

25 Mark Ourada Independent Consultant