U.S. EPA s Proposed Clean Power Plan

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1 U.S. EPA s Proposed Clean Power Plan U.S. Environmental Protection Agency U.S. EPA s Proposed Clean Power Plan U.S. EPA proposed the Clean Power Plan on June 2, The proposed plan: Builds on actions states, cities and businesses across the United States are already taking Reduces carbon pollution from existing power plants by 2030 by approximately 30 percent from 2005 levels, with significant reductions beginning by Cuts hundreds of thousands of tons of harmful particle pollution, sulfur dioxide and nitrogen oxides as a co benefit. Leads to health and climate benefits worth an estimated $55 billion to $93 billion in

2 Clean Power Plan: How it Works The Proposed Clean Power Plan: Relies on a strong federal state partnership Recognizes the progress states, cities and businesses have already made Builds on ongoing efforts Ensures reliable, affordable energy is available to all Americans Provides flexible compliance options Gives states and the power sector ample time to develop and implement plans The proposal aims to improve efficiency and leverage cleaner energy sources by doing two things: set achievable, enforceable state goals to cut carbon pollution per megawatt hour of electricity generated. lay out a national framework that gives states the flexibility to chart their own, customized path to meet the goals in their state plans. 3 Clean Power Plan: State Goals The proposal takes into account the interconnected nature of power generation to determine the Best System of Emission Reduction (BSER). The agency considered: Costs Technology Size of reductions Feasibility The Clean Power Plan proposes state specific goals, which aim to reduce a state s carbon intensity rate. To set the goals, EPA started with emissions data from 2012 the most current information available. Then we looked ahead to see what states could reasonably accomplish by 2030, using four strategies commonly in use that result in lower CO2 emissions: 1. Measures to make coal plants more efficient 2. Increased use of high efficiency, natural gas combined cycle (NGCC) units 3. Generating electricity from low or zero emitting facilities 4. Demand side energy efficiency 4 2

3 Clean Power Plan: State Plans States have the flexibility to determine how they are going to meet their goals. They could look at: Options to reduce emissions through changes at existing fossil plants Options to reduce emissions through the use of lowor non emitting generation Options to reduce emissions through demand side energy efficiency measures Regulatory mechanisms Other opportunities Flexible timelines 2030 compliance date, giving states years to meet their goals glide path, giving states time to ramp up programs and to be sensitive to reliability and enforceability issues Public participation in the state plan development process 5 Building Block 1. Make fossil fuel-fired power plants more efficient 2. Use lower-emitting power sources more 3. Build more zero/lowemitting energy sources Strategy EPA Used to Calculate the State Goal Efficiency Improvements Dispatch changes to existing natural gas combined cycle (CC) Renewable Energy Certain Nuclear Maximum Flexibility: Examples of State Compliance Measures Efficiency improvements Co-firing or switching to natural gas Coal retirements Retrofit CCS (e.g.,wa Parish in Texas) Dispatch changes to existing natural gas CC New NGCC Renewables Nuclear (new and up-rates) New coal with CCS 4. Use electricity more efficiently Demand-side energy efficiency programs Demand-side energy efficiency programs Transmission efficiency improvements Energy storage 6 3

4 Examples of Regulatory Mechanisms Direct emission limits on power plants (rate or mass based) Could be plant specific, company wide, state wide, or region wide Could include emission rate averaging programs that allow crediting of renewables and energy efficiency Regional emission reduction agreements, such as multi state emission averaging or budget trading programs e.g. RGGI, which includes complementary EE and RE programs to lower costs and/or achieve other goals Legislation or regulations establishing EE resource standards (EERS) and/or renewable portfolio standards (RPS) Integrated resource plan (IRP) type approaches for reducing utility fleet CO 2 emissions that use multiple measures (e.g., portfolio approach) Approach similar to Colorado Clean Air Clean Jobs Act that required utility plans to reduce SO 2 and NO X emissions, including consideration of power plant retirements and repowering, and use of EE/RE 7 Responding to Public Input: Notice of Data Availability Issued on October 28, 2014 Purpose Describe and seek comment on several ideas raised by multiple stakeholders Bring these ideas to the attention of other stakeholders and the public so that they have the opportunity to consider them as the develop their comments. Topics Glide path of emission reductions from 2020 to 2029 Certain aspects of the building block methodology Stringency of building block 2 Methodology for building block 3 and how building block 3 targets relate to compliance options The way the state specific CO 2 goals are calculated Goal setting equation Alternatives to the 2012 data year 8 4

5 Clean Power Plan Supplemental Proposal for Indian Country and Territories Issued on October 28, 2014 Summary Propose Best System of Emission Reduction (BSER) and set goals for certain areas where we had limited information in June For Indian country, propose goals for each of the three areas of Indian country with affected EGUs: Lands of the Navajo Nation, Ute Tribe of the Uintah and Ouray Reservation, and Fort Mojave Tribe For territories, propose goals for Puerto Rico and Guam only Uses same methodology as for states to determine the best system of emissions reduction and goals; applying four building blocks to 2012 data. Comment period: Closed December 19, Rate to Mass Technical Support Document Issued on November 6, 2014 in response to requests from states and other stakeholders. Provides two examples of how a state could translate its rate based goal to total metric tons of carbon (a mass based equivalent). The basic formula for translating from a rate based goal to a mass based equivalent is: Mass = CO 2 Emissions Rate * Generation In calculating a mass based equivalent, EPA used each state s proposed rate based goal from the June 2 nd proposal as the emissions rate. The TSD describes two approaches conceptually and applies the calculation to an example state. The first approach calculates generation from existing affected fossil fuel fired sources using historical data. The second approach calculates generation from existing affected and new fossil fuel fired sources using a combination of historical and projected data. 10 5

6 Clean Power Plan: Outreach U.S. EPA conducted a robust stakeholder engagement process, beginning Summer 2013 We heard from thousands of people through hundreds of meetings, listening sessions, conference calls and s. Input from the outreach process formed the basis of the June 2014 proposal Open, transparent public comment period on the proposal Comment period open for 6 months U.S. EPA met with more than 300 groups through the comment period, including reaching out to all 50 states States, businesses, and other stakeholders organized meetings and discussions on their own EPA received more than 3.5 million comments 11 Clean Power Plan: Next Steps On January 7, EPA announced its schedule for issuing a final rule: EPA began the regulatory process for proposing a federal plan to meet the Clean Power Plan goals. Strong preference to approve state plans. Provide information as states start their own planning process. Maximize flexibility. Public engagement, including a small business panel. EPA will issue final rules for new, modified and existing power plants by mid summer U.S. EPA will be continuing to engage with stakeholders as the agency works to review the public comments and finalize the proposed plan. 12 6

7 Thank you! 7