epa’s final clean power plan: overview steve burr aqd, sip section september 1, 2015
TRANSCRIPT
EPA’s Final Clean Power Plan: Overview
Steve BurrAQD, SIP Section
September 1, 2015
Slide 2
Overview
Status
Review of Clean Power Plan Basics
– Legal Basis
– BSER Building Blocks
Major Changes from Proposal
Initial Submittal
Regulatory Framework Options
Clean Energy Incentive Program (CEIP)
Slide 3
CPP Status
On August 3, 2015, EPA Signed final CPP rule and published supporting
documents:– http://
www2.epa.gov/cleanpowerplan/clean-power-plan-existing-power-plants#CPP-final
Signed final NSPS for new, modified and reconstructed EGUs:– http://
www2.epa.gov/cleanpowerplan/carbon-pollution-standards-new-modified-and-reconstructed-power-plants
Proposed federal CPP rules for states that fail to submit a plan:– http://
www2.epa.gov/cleanpowerplan/clean-power-plan-existing-power-plants#federal-plan
Slide 4
Legal Basis
Clean Air Act § 111: Standards of Performance for New Stationary Sources (NSPS)
Section 111(b) requires EPA to:– List categories of stationary sources that EPA finds
cause, or contribute significantly to, “air pollution which may reasonably be anticipated to endanger public health or welfare.”
– Promulgate “standards of performance” for emissions of air pollutants from new sources in the listed categories
Slide 5
Legal Basis
Standard of Performance: § 111(a)(1) defines as a standard which– Reflects the emission limitation achievable from
the “best system of emission reduction” (BSER) that
– Taking cost, non-air quality environmental impacts and energy requirements into account
– “the Administrator determines has been adequately demonstrated.”
Slide 6
Legal Basis
Section 111(d)– Requires EPA on adopting an NSPS to establish
guidelines and procedure for regulating existing sources that would be subject to the NSPS if they were new.
– The procedure must require states to submit a plan that “establishes standards for performance” (i.e. BSER) for covered existing sources
– If a state fails to submit a 111(d) plan or EPA disapproves a submitted plan, EPA must establish a plan for the state (similar to FIP under 110(c)).
Slide 7
Legal Basis
NSPS– Proposed January 8, 2014 for GHG emissions from
new fossil-fuel fired electric generating units (EGU)– Proposed June 18, 2014 for modified and
reconstructed EGUs– Final rule for all 3 adopted August 3, 2015, same
date as final CPP CPP consists of 111(d) guidelines for same
sources
Slide 8
BSER “Building Blocks”
Proposed BSER was based on “strategies, technologies and approaches already in widespread use by power companies and states”
Strategies include:– Measures to reduce the CO2 emissions rate of
individual generating units.– Measures to reduce the use of fossil-fuel fired
generating units.
Slide 9
BSER “Building Blocks”
EPA proposed 4 “Building Blocks” (BB) as BSER:– BB1: Reduce carbon intensity of generation from
coal-fired units through heat-rate improvements.– BB2: Shift generation from coal-fired and oil- and
gas-fired steam turbines to natural-gas fired combined cycle (NGCC) units.
– BB3: Increase reliance on renewable energy generation, which has zero CO2 emissions.
– BB4: Reduce demand for fossil-fuel fired generation by improving energy efficiency of electricity consumers.
Slide 10
BSER “Building Blocks”
State-Specific Goal Rates– Metric: lbs CO2/ MWh– Based on application of BSER over 2020-2029 to
state’s generation mix– Interim goal for 2020-2029 average– Final goal for 2030+– Arizona
• 1453 baseline• Assumed reduction to 778 by 2020 as result of BB2• 735 interim goal (49 % reduction)• 702 final goal (52 % reduction)
11
Changes from Proposal
Proposal Goals based on application
of BSER to each state
Final Goals based on application
of BSER to 3 regions:– Eastern Interconnection– Western Interconnection– Texas Interconnection
Goals based on least stringent rate for any region
12
Changes from Proposal
Proposal Single form of goal: state-
specific rate
Final Multiple forms:
– National uniform performance rates for 2 subcategories: NGCC and fossil fuel steam (FFS)
– State goals based on performance rate and mix of generation
– Mass-based goals
13
Changes from Proposal
Proposal Full application of BB2 by
2020 assumed– In AZ = complete retirement
of coal generation by 2020
Final Application of BB2 phased
in beginning in 2022
14
Changes from Proposal
Proposal Final
Energy efficiency (BB4) included in BSER and used to calculate goal
BB4 no longer used to calculate goal, but may be used for compliance
Utility-scale RE in operation in 2012 + “at-risk” nuclear counted in goal calculation and compliance
Not counted for either purpose– Effect is a “wash”
15
Changes from Proposal
Proposal Wide range of state goal
rates:– Lowest: 215 (WA)– Highest: 1989 (Navajo)
Final Narrower range of goal
rates:– Lowest: 771 (3 states)– Highest: 1305 (5 states)
Arizona goals:– Interim: 735 (49 % reduction)– Final: 702 (52 % reduction)
Arizona goals:– 1,173 (24 % reduction)– 1,031 (34 % reduction)
Slide 16
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
-
200
400
600
800
1,000
1,200
1,400
1,600
1,800
Arizona Goal Rates
Proposal
lbs C
O2/
MW
h
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
-
200
400
600
800
1,000
1,200
1,400
1,600
1,800
Arizona Goal Rates
ProposalFinal
lbs C
O2/
MW
h
Changes from Proposal
17
Changes from Proposal
Proposal Rate-to-mass conversion
left to states
Trading allowed, but details unspecified
Final Rule establishes state mass-
based goals
Trading requirements and limitations established in rule for various emission standard types
18
Changes from Proposal
Proposal “Portfolio approach”:
federal enforceability of measures other than emission standards required
Final “State measures approach”:
federal enforceability of measures other than emission standards not required; backstop required
No credit for early emission reductions; NODA sought comment
Clean Energy Incentive Program (CEIP)– Optional– Included in federal plan
19
Changes from Proposal
Proposal Plan submission deadline:
6/30/2016 If initial submittal:
– 6/30/2017 deadline for single-state plans
– 6/30/2018 deadline for multi-state plans
Final Plan submission deadline:
9/6/2016 If initial submittal:
– 9/6/2017 update on progress– 9/6/2018 deadline for all
plans
Slide 20
Initial Submittal
Must include– Identification of final plan approach or approaches,
including a description of progress made to date– Explanation of need for additional time to submit final
plan– Demonstration or description of
• Meaningful engagement with stakeholders, including vulnerable communities, during the initial submittal preparation period
• Opportunity for public comment on the initial submittal• Plans for engagement during development of the final plan
9/6/2017 update on progress: must include commitment to one approach and draft or proposed legislation or regulations
Slide 21
Regulatory Framework Options
Goals– 2 Rate-Based
• Separate, nationally uniform, “performance rates” for fossil fuel steam (FFS) and NGCC
• State “rate-based CO2 goals” based on application of performance rates to each state’s 2012 generation mix
National Performance Rates (lbs CO 2/MWh)
Subcategory Interim FinalFossil Steam 1,534 1,305 NGCC 832 771
Arizona Rate-Based Goals (lbs CO 2/MWh)
Interim Final 1,173 1,031
Slide 22
Regulatory Framework Options
Goals (cont’d)– 2 Mass-Based
• For existing EGUs only
• For existing EGUs with “new source complement”
– State plan must demonstrate achievement of one of these goals
Arizona Mass-Based Goals (short tons CO2)Interim Final
33,061,997 30,170,150
Arizona Mass-Based Goals with New Source Complement (short tons CO2)
Interim Final34,486,994 32,380,196
Slide 23
Regulatory Framework Options
2 plan types:– Emission standards
• Imposes requirements solely on affected EGUs in the form of federally enforceable emission standards
• Emission standards suffice to achieve goal– State measures
• May impose emission standards that partially achieve goal or no emission standards at all
• Measures other than emission standards must be enforceable at state level but do not become federally enforceable
• Must demonstrate compliance with mass-based goal• Must establish backstop emission standards plan
Emission standard types (next page)
24
Regulatory Framework Options
Slide 25
Clean Energy Incentive Program
Eligible Projects – Located in or benefit a state implementing CEIP– Commence construction (RE) or operation (EE)
after submission of final plan– During 2020-2021, either (a) generate metered
MWh from any wind or solar resource or (b) result in quantified and verified electricity savings through demand side EE in low-income communities
Slide 26
Clean Energy Incentive Program
Credits– Allocated from state budget for 2022-2029 interim
compliance period; EPA provides matching credits as the incentive for participation
– RE Projects: For every 2 MWh generated, project receives 1 ERC from state and 1 matching ERC from EPA
– EE Projects: For every 2 MWh generated, project receives 2 ERCs from state and 2 matching ERCs from EPA
– For mass-based program, project receives ERC equivalent in allowances; in TSD EPA applies emission factor of 0.8 short tons CO 2 per MWh FF generation