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Renewable Energy as a Renewable Energy as a Mechanism for Reducing Mechanism for Reducing
Pollution Pollution North Carolina North Carolina DENR/DAQ Mercury/CO2 WorkshopDENR/DAQ Mercury/CO2 Workshop
Raleigh. North CarolinaRaleigh. North Carolina
April 20, 2004April 20, 2004
Harnessing the power of voluntary Harnessing the power of voluntary marketsmarkets… to improve the … to improve the environmentenvironment
Copyright Environmental Resources Trust, Inc. (ERT), 2003. Request to reproduce all or part of this material should be made to ERT .
Alden HathawayAlden Hathaway
Environmental Resources Trust, Inc.Environmental Resources Trust, Inc.
OVERVIEWOVERVIEW
Clean Air Act (CAA) FrameworkClean Air Act (CAA) Framework CAA as Drivers for WindCAA as Drivers for Wind MWCOG Case StudyMWCOG Case Study Chicago EcoPowerChicago EcoPower®® Report Report Potential Market OpportunitiesPotential Market Opportunities Necessary Policy ChangesNecessary Policy Changes Related Marketing InnovationsRelated Marketing Innovations
Problem StatementProblem Statement
How do we get How do we get more voluntary more voluntary participation when participation when most municipals most municipals and end-users are and end-users are staying on the staying on the sidelines because of sidelines because of the increased price the increased price for Green Power?for Green Power?
Answer: Give them credit for pollution reductionAnswer: Give them credit for pollution reduction
CLEAN AIR ACT CLEAN AIR ACT FRAMEWORKFRAMEWORK
Act drafted without renewable energy in mind Act drafted without renewable energy in mind CAA requires regional air quality plans (State CAA requires regional air quality plans (State
Implementation Plans or SIPs) Implementation Plans or SIPs) To date, EPA has To date, EPA has nevernever approved renewable approved renewable
energy as an air pollution control measure energy as an air pollution control measure under a SIP under a SIP
““Window of opportunity” created - new Window of opportunity” created - new quantification methods, 8-hour ozone quantification methods, 8-hour ozone standard, and regional haze regulationsstandard, and regional haze regulations
CAA POLICIES AS CAA POLICIES AS MARKET DRIVERSMARKET DRIVERS
State/local governments choose from wide range of State/local governments choose from wide range of air pollution control measuresair pollution control measures
Emission reductions from traditional control Emission reductions from traditional control measures largely exhausted in dirty air areasmeasures largely exhausted in dirty air areas
States and municipalities interested in air quality States and municipalities interested in air quality benefits of renewable energy (particularly wind) benefits of renewable energy (particularly wind)
Lowering NOx emissions results in reduced ozone Lowering NOx emissions results in reduced ozone transport and less regional hazetransport and less regional haze
CAA POLICIES AS CAA POLICIES AS MARKET DRIVERSMARKET DRIVERS
State and local governments are a key market for State and local governments are a key market for renewable energy, for example consider wind;renewable energy, for example consider wind; Increasing market demand is the “linchpin” for Increasing market demand is the “linchpin” for
wind power developmentwind power development Wind plants are financed based on the future Wind plants are financed based on the future
revenue stream from wind purchasesrevenue stream from wind purchases Municipalities and states often serve as important Municipalities and states often serve as important
“anchor” customers (e.g., City of Chicago)“anchor” customers (e.g., City of Chicago)
MWCOG CASE STUDYMWCOG CASE STUDY Metropolitan Washington (MW) area (MD-Metropolitan Washington (MW) area (MD-
DC-VA) designated as “severe” ozone non-DC-VA) designated as “severe” ozone non-attainment area under 1-hour standardattainment area under 1-hour standard
Met. Wash. Council of Governments (COG) Met. Wash. Council of Governments (COG) submitted revised regional air quality plan submitted revised regional air quality plan (SIP) to EPA Region III in March 2004 for (SIP) to EPA Region III in March 2004 for 60-day review60-day review
MWCOG CASE STUDYMWCOG CASE STUDY
Case demonstrates market potential of SIP Case demonstrates market potential of SIP emissions reduction credit under the CAA emissions reduction credit under the CAA
Mont. Co. seeking to purchase 5% of its Mont. Co. seeking to purchase 5% of its energy from windenergy from wind
Energy conservation planned to offset Energy conservation planned to offset “green power” premium“green power” premium
Co. issued request for proposals in late Feb. Co. issued request for proposals in late Feb. 20042004
New ERT Environmental New ERT Environmental ReportReport
Prepared under a Grant from the Great Lakes Protection Fund
MethodologyMethodology Methodology Breakthrough in Chicago ReportMethodology Breakthrough in Chicago Report Confidentiality agreements with utilities Confidentiality agreements with utilities
provide access to previously unavailable data provide access to previously unavailable data to generate emissions avoidance reportto generate emissions avoidance report
Results of Chicago ReportResults of Chicago Report Analysis proves that renewable energy backs down fossil fuel plants, coal, oil, gas rather than nuclear or hydro;Analysis proves that renewable energy backs down fossil fuel plants, coal, oil, gas rather than nuclear or hydro; Renewable energy backs down fossil fuel plants because of zero or near zero marginal operating costs;Renewable energy backs down fossil fuel plants because of zero or near zero marginal operating costs; Analysis utilizes actual power plant dispatch ranking data – specific plants dispatched in order of economic Analysis utilizes actual power plant dispatch ranking data – specific plants dispatched in order of economic
cost;cost; Analysis compares actual power plant dispatch ranking data and actual continuous emissions monitor data to Analysis compares actual power plant dispatch ranking data and actual continuous emissions monitor data to
verify emission and operational changes;verify emission and operational changes; Data based on continuous monitors are current vs. time lag (up to two years) with other methodologies;Data based on continuous monitors are current vs. time lag (up to two years) with other methodologies; Data in Chicago shows 2300 lbs CO2 per MWh vs. 815 lbs per MWh “System Mix” methodologyData in Chicago shows 2300 lbs CO2 per MWh vs. 815 lbs per MWh “System Mix” methodology
How Chicago Methodology How Chicago Methodology Can Help Provide an Example Can Help Provide an Example
Use ERT Environmental Use ERT Environmental
Impact methodology to Impact methodology to validate NOx emission validate NOx emission reductions created reductions created through renewable through renewable energy back down of energy back down of fossil plants.fossil plants.
Use NC New Generation Use NC New Generation NOx Set-Aside to provide NOx Set-Aside to provide SIP credit to NOx SIP credit to NOx emission reductions emission reductions resulting from renewable resulting from renewable energy.energy.
NECESSARY ACTIONNECESSARY ACTION MOU’s between DOE and EPA Regional MOU’s between DOE and EPA Regional
Offices to support EEREOffices to support EERE Revision of CAA regulations and policy to Revision of CAA regulations and policy to
place RE on level playing field;place RE on level playing field; Comments on EPA’s proposed Interstate Air Comments on EPA’s proposed Interstate Air
Quality Rule and planned supplemental ruleQuality Rule and planned supplemental rule EPA issuance of improved guidance and EPA issuance of improved guidance and
training for Regions, States, & local govrmt.training for Regions, States, & local govrmt. Development of model documentation Development of model documentation
POTENTIAL MARKET POTENTIAL MARKET OPPORTUNITIES OPPORTUNITIES
Regional air quality plans to meet 8-hour ozone Regional air quality plans to meet 8-hour ozone standard in Midwest and East standard in Midwest and East Marketing window of opportunity in next few Marketing window of opportunity in next few
yearsyears Wind energy as important optionWind energy as important option SIP plans due April 2007 SIP plans due April 2007
Regional air quality plans to meet regional haze Regional air quality plans to meet regional haze regulations in Westregulations in West
RELATED MARKETING RELATED MARKETING INNOVATIONSINNOVATIONS
Promote increased cost-effectiveness of Promote increased cost-effectiveness of wind purchases through:wind purchases through: Bundling with energy efficiency and innovative Bundling with energy efficiency and innovative
financing approachesfinancing approaches Blending with landfill gas & other lower-priced Blending with landfill gas & other lower-priced
renewable energy renewable energy
Chicago Leads the WayChicago Leads the Way
City of Chicago to began purchasing over 120,000 MWh of Wind from Mendota Hills Wind Plant.
2 Largest Wind Plants in Midwest coming on line 2004?
Chicago Mayor Richard Daley receives a ceremonial EcoPower® Certificate from Commonwealth Edison CEO John Rowe.
Questions?Questions?
Copyright Environmental Resources Trust, Inc. (ERT), 2001.
Request to reproduce all or part of this material should be made to ERT.
Alden HathawayAlden HathawayDirector Green Power Director Green Power ProgramsProgramsERT, Inc.ERT, Inc.202-785-8577202-785-8577
Debra JacobsonDebra Jacobson
Lecturer in Energy Law,Lecturer in Energy Law,
GWU Law SchoolGWU Law School
703-356-7448703-356-7448
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