Climate Change Policies in the Northeast: Carbon Emission Caps and Energy Cost

Transcription

1 Climate Change Policies in the Northeast: Carbon Emission Caps and Energy Cost ASHRAE Winter Meeting, New York City January 20, 2008 Presented by Bruce Biewald Synapse Energy Economics Inc. All rights reserved.

2 Climate change impacts in the Northeast (NYC example) 2

3 Evolution of CO2 emissions policy in the Northeast: NEG/ECP August 2001 New England Governors and Eastern Canadian Premiers Climate Change Action Plan. Short-term Goal: Reduce regional GHG emissions to 1990 emissions by Mid-term Goal: Reduce regional GHG emissions by at least 10% below 1990 emissions by 2020 Long-term Goal: Reduce regional GHG emissions sufficiently to eliminate any dangerous threat to the climate; current science suggests this will require reductions of 75-85% below current levels. Nine action steps dealing with inventories, planning to meet targets, public awareness, energy conservation, etc. June 2007 Resolution reaffirming. 3

4 Evolution of CO2 emissions policy in the Northeast: RGGI December 2005 seven governors signed the Regional Greenhouse Gas Initiative Memorandum of Understanding. RGGI is the first mandatory cap and trade program in the US for CO2. Emissions capped at current levels in 2009, and then reducing by 10% by August RGGI Staff Working Group issues final drafts of model rules. January Massachusetts and Rhode Island commit to join. April Maryland commits to join. December Deadline for final regulations. 4

5 Proposals require deep CO2 emissions reductions 5

6 CO 2 emissions price forecasts CO2 Prices, 2007$ $80 $70 $60 $50 $40 $30 $20 $10 $ MIT - Stabilize Emissions at 2008 Levels MIT - Reduce Emissions by 50% by 2050 MIT - Reduce Emissions by 80% by 2050 Bingaman-Specter Safety Valve EIA S Fixed 30% Offsets EIA S.280 Core Scenario EIA S No Int'l Offsets EIA S No New Nuclear EIA S Unlimited Offsets EIA S Ref. Nuclear & Biomass EIA S Ref. Nuclear & Biomass - No CCS EIA S Ref Nuclear, Biomass & LNG - No CCS EPA S.280 Core Scenario - ADAGE Model EPA S.280 Senate Core Scenario - IGEM Model EPA S Low Int'l Actions EPA S Unlimited Offsets EPA S No Offsets EPA S Lower Nuclear Generation EPA S No CCS Technology Synapse Low Synapse Mid Synapse High Xcel Low Xcel Mid Xcel High New Mexico Public Regulation Commission - Low New Mexico Public Regulation Commission - Mid New Mexico Public Regulation Commission High MIT Future of Coal - Low MIT Future of Coal - High 6

7 CO2 emissions: market prices and externality cost 7

8 Power plants in the United States 8

9 CO2 emission rates from fossil-fueled electric power generation Percent of Plants 25% 20% 15% 10% 5% CO 2 Emission Rates for US Plants (2005) Gas Oil Coal 0% Tons CO 2 per MWh Coal Oil Gas Median Num Plants

10 Hourly fossil average CO2 emissions rates from the New England electric power system (2005) HAER (T CO 2 /MWh) HAER (T CO 2 /MWh) Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan /18 07/20 07/22 07/24 07/26 07/28 07/30 08/01 08/03 08/05 08/07 Hourly Average Emissions Rate (HAER) in New England (NEWE) Hour Day of Year (2005)

11 Hourly simulated wind generation for New York and New England New England (Boston) New York (Upstate: Binghampton) New York (City) Synthetic Wind Power (KW) 11

12 Power plants in the Northeast 12

13 70000 U.S. generating capacity by vintage and fuel type Gas Coal Other Solar Geothermal Wind Biomass Hydro Oil Nuclear Planned Gas Planned Coal Planned Wind In-Service Year 13

14 U.S. generating capacity: cumulative by vintage and fuel type 600,000 Gas Coal Other 500, ,000 Solar Geothermal Wind Biomass Hydro 300, ,000 Oil Nuclear Planned Gas Planned Coal Planned Solar 100, In-Service Year Planned Geothermal Planned Wind Planned Biomass Planned Hydro Planned Oil 14

15 Sources Page 2 Frumhoff, Peter, James McCarthy, Jerry Melillo, Susanne Moser, and Donald Wuebbles. Confronting Climate Change in the U.S. Northeast. Northeast Climate Impacts Assessment / Union of Concerned Scientists: Map source: Google, Sanborn Map Company, Inc. Page 5 World Resources Institute Page 6 Carbon price forecasts from: Johnston, Lucy, Ezra Hausman, Anna Sommer, Bruce Biewald, Tim Woolf, David Schlissel, Amy Roschelle, and David White. Climate Change and Power: Carbon Dioxide Emissions Costs in Electricity Resource Planning. Cambridge: Synapse Energy Economics, March Energy Information Administration. Supplement to Energy Market and Economic Impacts of S.280. November Ansolabehere, Stephen, et al. The Future of Nuclear Power: An Interdisciplinary MIT Study. Cambridge: Massachusetts Institute of Technology, Energy Information Administration. Energy Market and Economic Impacts of S. 280, the Climate Stewardship and Innovation Act of Washington, DC: July Paltsev, Sergey, John Reilly, Henry Jacoby, Angelo Gurgel, Gilbert Metcalf, Andrei Sokolov, and Jennifer Holak. Assessment of U.S. Cap-and-Trade Proposals. Cambridge: MIT Joint Program on the Science and Policy of Global Change, April U.S. Environmental Protection Agency, Office of Atmospheric Programs. EPA Analysis of the Climate Stewardship and Innovation Act of 2007: S. 280 in 110th Congress. Washington, DC: July 16, New Mexico Public Regulation Commission. Order Approving Recommended Decision and Adopting Standardized Carbon Emissions Costs for Integrated Resource Plans. Order, in Notice of Inquiry into Adoption of Staged Standardized Carbon Emissions Costs. July Xcel Energy Resource Plan. December 14,

16 Sources, continued Page 7 Hornby, Rick, et al. Avoided Energy Supply Costs: Synapse Energy Economics. Page 8 Map created by Synapse based on NERC ES&D data. Page 9 Based on EPA EGRID data. Page 10 - Based on EPA ETS data. Page 11 - Synapse Page 12 - Map created by Synapse based on data from NERC ES&D. Page 13 - Synapse calculations based on EIA-860 and NERC ES&D data. Page 14 - Synapse calculations based on EIA-860 and NERC ES&D data 16