Topics Clean Power Plan Role of Energy Efficiency Evaluation, - PowerPoint PPT Presentation

r Energy Efficiency in Opportunities for in th the Cle lean Power Pla lan Joe Bryson US EPA Climate Protection Partnerships Division November 12, 2015 Annual Southwest Utility Energy Efficiency Workshop

Topics • Clean Power Plan • Role of Energy Efficiency • Evaluation, Measurement and Verification • Clean Energy Investment Program • Proposed Federal Plan/Model Rule • EE-related Opportunities for Comment • Further Information 2

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Outreach Shaped the Cle lean Power Pla lan • More than two years of unprecedented outreach and public engagement • Responds to the critical changes that stakeholders and states asked the agency to make and incorporates many of their good ideas • More than 4 million public comments submitted to the EPA and • Hundreds of meetings with stakeholders • Public engagement was essential throughout the development of the Clean Power Plan, and that outreach will continue during the implementation 4

Transition to Cle lean Energy is is Happening Rapid idly • Carbon and air pollution are already decreasing, improving public health each and every year. • The Clean Power Plan supports and accelerates this momentum, putting us on pace to cut this dangerous pollution to historically low levels in the future. • When the Clean Power Plan is fully in place in 2030, carbon pollution from the power sector will be 32 percent below 2005 levels, securing progress on and making sure it continues. 5

Benefits of the Clean Power Plan The transition to clean energy is happening faster than anticipated. This means carbon and air pollution are already decreasing, improving public health each and every year. While this chart reflects health benefits in 2030, EPA’s Regulatory Impact Analysis for the 6 CPP estimates health benefits due to reduced emissions beginning in 2020.

The Clean Power Plan Overview  Relies on a federal-state partnership to reduce carbon pollution from the biggest sources – power plants  Carrying out EPA’s obligations under section 111(d) of the Clean Air Act, the CPP sets carbon dioxide emissions performance rates for affected power plants that reflect the “best system of emission reduction” (BSER)  EPA identified 3 “Building Blocks” (next slide) as BSER and calculated performance rates (lb CO2/MWh) for fossil steam EGUs and another for natural gas combined cycle units  Then, EPA translated that information into a state goal – measured in mass (tons of CO2) and rate (lbs of CO2/MWh) – based on each state’s unique mix of power plants in 2012  The states have the ability to develop their own plans for EGUs to achieve either the performance rates directly or the state goals, with guidelines for the development, submittal and implementation of those plans 7

Best System of of Emis ission Reduction: Th Three Build ildin ing Bloc locks Maximum Flexibility: Strategy EPA Used to Examples of State Building Block Calculate the State Goal Compliance Measures 1. Improved efficiency at Increasing the operational -Boiler chemical cleaning efficiency of existing coal- -Cleaning air preheater coils power plants fired steam EGUs on -Equipment and software average by a specified upgrades percentage, depending upon the region 2. Shifting generation Substituting increased Increase generation at existing generation from existing NGCC units from higher-emitting natural gas units for steam EGUs to lower- reduced generation at emitting natural gas existing steam EGUs in power plants specified amounts Substituting increased Increased generation from new 3. Shifting generation to generation from new zero- renewable generating capacity, clean energy emitting generating e.g., solar, wind, nuclear, and renewables technologies for reduced combined heat & power generation at existing fossil fuel-fired EGUs in specified 8 amounts

Category ry-Specific Performance Rates EGUs are subject to the same standards no matter where they are located. Emission Performance Unique State Mass Unique State X = Rates Generation Equivalents Goal Rates (application of Mix BSER) EPA is establishing carbon dioxide emission performance rates for two subcategories of existing fossil fuel-fired electric generating units (EGUs): 1. Fossil steam units (generally, coal-fired power plants): 1305 lb/MWh 2. Natural gas combined cycle units: 771 lb/MWh Emission performance rates have been translated into equivalent state goals in three forms: • rate-based goal measured in pounds per megawatt hour (lb/MWh); • SWEEP states range from 855 lb/MWh (NV) to 1299 (WY) • mass-based goal measured in short tons of CO 2 • mass-based goal with a new source complement (for states that choose to include new sources) measured in short tons of CO 2 9

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The Cle lean Power Pla lan Provides Many Opportunit ities for Energy Effic iciency • The Clean Power Plan (CPP) puts energy efficiency and renewable energy (EE/RE) front and center as compliance options that avoid or reduce CO2 from affected EGUs and can help states meet their CPP goal. • EE is an important, proven strategy in wide use by states that can substantially and cost-effectively lower CO 2 emissions from the power sector across all state plan pathways. • While the final state goals do not include EE as a component of the Best System of Emission Reduction (BSER), this does not limit the ability of states to use EE to meet their CPP goals for affected EGUs. 11

What Measures Can Be Used to Lower CO 2 ? Measures include (but are not limited to): • Renewable energy (new & • Heat rate improvements capacity uprates) • Fuel switching to a lower • Wind, solar, hydro, waste- carbon content fuel to-energy, wave and tidal • Carbon capture and utilization power for existing sources • Nuclear generation (new & capacity uprates) • Carbon capture and • Demand-side EE programs sequestration for existing and policies sources • Electricity transmission and • Integration of renewable distribution improvements energy into EGU operations (e.g. conservation voltage • Combined heat and power reduction) • Others • Qualified biomass co-firing and repowering 12

Two State Pla lans Desig igns States are able to choose one of two state plan types: Emission Standards Plan – state places federally enforceable emission standards on affected electric generating units (EGUs) that fully meet the emission guidelines - can be designed to meet the CO 2 emission performance rates or state goal (rate-based or mass-based goal) State Measures Plan - state includes, at least in part, measures implemented by the state that are not included as federally enforceable emission standards - designed to achieve the state CO 2 mass-based goal - includes federally enforceable measures as a backstop 13

How Does EE EE Fit it in into the Cle lean Power Pla lan? EM&V Considerations Role of EE in State Plan How States Can Advance EE Type of Approach Req’d ? Allocate CO 2 allowances for EE * (directly or through a set aside) • Unlimited flexibility with EE reduces cost and EE implementation lowers CO 2 emissions Auction allowances, use proceeds ($) * EM&V generally not required for EE (e.g., RGGI) but are not for CPP purposes, except for Mass CEIP and set asides specifically enforceable or Secure matching allowances for created to meet the leakage written into the state low-income EE from Clean Energy  requirement plan Incentive Program (CEIP) Emission • EM&V plans and M&V Standards EE explicitly written Include EE ERC tracking, trading, and  reports required issuance provisions in the state plan into state plan; Used • EE is explicitly tracked & credited to generate ERCs and Issue ERCs for quantified and • Trading-ready plans facilitate  directly adjust Rate verified MWh savings from eligible broad access to ERCs EE measures reported CO 2 • EE implemented after emissions rate of 2012 can generate credits Secure matching ERCs (2:1) from  starting in 2022 affected EGUs CEIP for low-income EE Explicitly included as • Projection of EE/RE impacts I mplement state EE policies and supporting material required and EGU CO 2 programs (e.g., EERS) that are performance required for state plan –  * enforceable under state law, either to  * EM&V Plan for EE/RE State Demo. enforceable under meet goal or in conjunction with measures must be included State state law; State Based on federally enforceable limits on EGUs as supporting material for Measures EE/RE policies and state plan Mass • B ackstop emission measures can be standards for affected EGUs Secure matching allowances from CEIP used to help affected  if CO 2 reductions don’t for low- income EE EGUs meet mass goal 14 materialize