overview epa’s proposed clean power plan and …...coal plant efficiencies • epa notes that...
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Overview EPA’s Proposed Clean Power Plan and Impacts for Louisiana
Clean Cities Coalition MeetingNovember 5, 2014
David E. Dismukes, Ph.D.Center for Energy StudiesLouisiana State University
CAVEAT: The views and opinions provided in this presentation are those of the author and do not necessarily reflect the official position of the State of Louisiana or any Louisiana executive agency.
Take Away Points
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Overview
EPA proposed the Clean Power Plan (“CPP”) in June 2014 with the goal of reducing carbon emissions by an average of 38 percent in 2020 (interim target) and 42 percent by 2030, both from 2012 levels.
The CPP is primarily based upon a target rate (lbs/MWh), not a level; although there is a potential “mass-based” conversion.
Rule differs from many past EPA approaches since it:
a) is primarily based on a target rate (lbs/MWh), not emissions level reduction;
b) Is not based on a market-based mechanism or a fixed technology method of emissions reductions;
c) Defines a range of potential compliance options; andd) Has ambiguous non-compliance provisions (at this point).
Final comments on the proposed rule are due on December 1, 2014.
Proposed Louisiana CO2 State-wide Emission Rate Reduction
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Overview
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2012 Baseline 2020 Interim Goal 2030 Final Goal
Source: EPA Clean Power Plan Proposed Rule Technical Documents, available at: http://www2.epa.gov/carbon-pollution-standards/clean-power-plan-proposed-rule-technical-documents.
Louisiana’s 2012 baseline is set at 1,533 lbs/MWh and will be required to decrease to 948 lbs/MWh by 2020 and to 883 lbs/MWh by 2030.
lbs
CO
2/M
Wh
2020 Interim Goal: 948 lbs/MWh; a reduction of
585 lbs/MWh, or 38 percent.
2030 Final Goal: 883 lbs/MWh; a reduction of
650 lbs/MWh, or 42 percent.
Total Annual CO2 Emission Reductions Needed
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Overview
Note: Plant emissions are for 2012.Source: 2012 EPA Clean Air Markets database.
Proposed rule will require Louisiana to reduce its power sector annual CO2 emissions by over 27 million short tons of CO2 by 2030.
Over 27 million tons of CO2 per year
Big Cajun 2: 11 mllion tons CO2
Brame Energy Center:5.9 million tons CO2
Dolet Hills:5.7 million tons CO2
RS Nelson:6 million tons CO2
State Comparison of Emission Rate Reductions
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Overview
0
200
400
600
800
1,000
1,200
1,400
1,600
AL AK AZ AR CA
CO CT
DE FL GA HI
ID IL IN IA KS KY LA ME
MD
MA MI
MN
MS
MO
MT
NE
NV
NH NJ
NM NY
NC
ND
OH
OK
OR PA RI
SC SD TN TX UT
VA WA
WV WI
WY
Louisiana’s rate reduction of 650 lbs/MWh is close to the overall U.S. average of 649 lbs/MWh.
US average emission rate reduction: 649 lbs/MWh
Louisiana’s emission rate reduction: 650
lbs/MWh
Source: EPA Clean Power Plan Proposed Rule Technical Documents, available at: http://www2.epa.gov/carbon-pollution-standards/clean-power-plan-proposed-rule-technical-documents.
lbs
CO
2/M
Wh
State Comparison of Total Annual CO2 Emission Reductions
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Overview
Louisiana requirement is 22nd most stringent state goal under the proposed rule. Top five states account for five percent of the required reduction; top ten states account for
12 percent of the required reduction.
lbs/
MW
h
0
200
400
600
800
1,000
1,200
1,400
1,600
RI
CT
CA
AK
KY
DE
MA
WV
NV
MS AL IN MO HI
ME FL NJ
NY
UT
OH PA
ND
WY
VA TX ID NH LA MI
OK
MT
NE
OR
NM GA
NC WI
AR KS
MD AZ
CO TN IA IL SC
MN
WA
SD
Source: EPA Clean Power Plan Proposed Rule Technical Documents, available at: http://www2.epa.gov/carbon-pollution-standards/clean-power-plan-proposed-rule-technical-documents.
State Comparison of Total Annual CO2 Emission Reductions
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Overview
On a percentage basis, Louisiana’s required reduction of 42 percent ranks 20th overall.
Per
cent
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
RI
KY
WV IN MO
ND
WY
AK HI
MT
OH UT AL
NE
DE
PA
KS MI
CT
MS WI
FL CA
NV IA MD
NM IL TN LA MA
OK
CO VA
NC TX AR
GA NJ
NY AZ
NH
MN
ME
SC
OR
SD ID WA
Source: EPA Clean Power Plan Proposed Rule Technical Documents, available at: http://www2.epa.gov/carbon-pollution-standards/clean-power-plan-proposed-rule-technical-documents.
Myth: Louisiana Will Not be Impacted Much Since it is a Natural Gas State
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OverviewP
erce
nt
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
KY
ND
WY
WV
SD
MT
NE IA KS
MO IL IN TN UT
MD
OH
CO
MN
NC WI
SC MI
AR PA
NM GA AZ AL
OK TX LA VA
WA HI
FL OR
DE
MS
NH NV NJ
MA
AK
NY
CA
CT ID ME RI
Coal Generation as Percent of Total Emissions ReductionU.S. Average Emissions Reduction
States with large shares of coal-fired generation have reduction rates lower than the U.S. average, and lower than many states with larger shares of natural gas-fired generation.
Source: EPA Clean Power Plan Proposed Rule Technical Documents, available at: http://www2.epa.gov/carbon-pollution-standards/clean-power-plan-proposed-rule-technical-documents.
Comparative Impacts: Emission Reductions Per-Capita
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Overview
Greater than 3.0M short tons per person
No Requirement
Less than 2.0M short tons per person
2.0M to 3.0M short tons per person
Louisiana is the 8th hardest impacted state requiring 4.04M short tons of CO2 reductions per capita person by 2030.
Source: 2012 EPA Clean Air Markets database; National Electric Energy Data System (“NEEDS”); 40 C.F.R. Part 60, p. 34895; and 2014 Census Estimates.
Comparative Impacts: Emission Reductions Per State GDP
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Overview
`
Greater than 100 M short tons per million $
No Requirement
Less than 50M short tons per million $
50M-100M short tons per million $
Louisiana is the 16th hardest impacted state in terms of reduction of CO2 per state GDP.
Source: 2012 EPA Clean Air Markets database; U.S Energy Information Administration, U.S. Department of Energy
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BSER and EPA’s Building Block Approach
EPA’s Proposed Clean Power Rule – Louisiana BSER Targets
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BSER and Building Blocks
15%
16%
3%
58%
8%
The EPA’s Proposed Clean Power Rule is based on a Best System of Emissions Reductions (“BSER”) that includes four “building blocks.”
Building Block 1: EPA reviewed the opportunity for coal-fired plants to improve their heat rates. BSER
assumes all coal plants can increase their efficiency by 6
percent.
Building Block 2: EPA found an average
availability of 70 percent for natural gas CCs to be technically feasible.
Building Block 3a: EPA identified five nuclear units
currently under construction and assumes that 5.8 percent of
existing nuclear capacity is ‘at-risk” but can be retained.
Building Block 3b: EPA developed targets for
renewable energy penetration in six regions and calculated
regional growth factors to achieve each target by 2030.
Building Block 4: EPA estimated energy efficiency deployment in 12
leading states and assumes all states can increase their current annual
savings rate to reach annual savings of 1.5 percent by 2030.
Each building block accounts for a portion of the total goal.
Louisiana Average Fossil EGU CO2 Emissions Standard based on BSER
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BSER and Building Blocks
0
500
1,000
1,500
2,000
2,500
2012 FossilEmissions Rate
Coal Heat RateImprovement
Gas CC Re-Dispatch
New and "At-Risk" Nuclear
Existing andNew
Renewables
New EnergyEfficiency
2030 ProposedEmissionsStandard
Louisiana Average Coal CO2 Rate
Louisiana Average NGCC CO2 Rate
CO2 RateReduction: 42%
Foss
il E
GU
CO
2E
mis
sion
s S
tand
ards
(lbs
/MW
h)
Source: LA 111(d) EGU Computation.xlsx.
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Building Block 1: Coal Plant Efficiency Improvements
Building Block 1: 4-6 Percent Lower Emissions from Existing Coal Generation
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Coal Plant Efficiencies
• EPA notes that several studies have examined the potential to improve heat rates as coal-fired power plants, noting specifically a 2009 study by the engineering firm Sargent & Lundy.
• Based on the 2009 Sargent & Lundy study, EPA estimated that potential heat rate improvements are in the order of approximately 4 to 12 percent. Furthermore, based on review of EPA and DOE EIA generation data, EPA estimates that historically EGUs have experienced heat rate improvements from 3 to 8 percent.
• Based on a review of prior studies and generation trends, EPA estimates the potential for improvements in heat rates of between 4 and 6 percent, which mirrors a reduction in CO2 emissions by the same.
• EPA notes that improvements in heat rates decrease fuel consumption and thus costs, and that a 6 percent improvement would be sufficient to cover costs associated with improvement.
Source: 40 C.F.R. Part 60, pp. 34859-34861.
FacilityGenerator
ID
2012 Emissions
Rate(lbs/MWh)
Thermal Efficiency
Improvement Factor
(%)
Adjusted Emissions
Rate(lbs/MWh)
2012 Net Output(MWh)
Dolet Hills 1 2,460 6.0% 2,312 4,616,823
R S Nelson 1 2,693 6.0% 2,531 821,331 R S Nelson 2 2,683 6.0% 2,522 802,645 R S Nelson 6 2,493 6.0% 2,344 3,118,384
Big Cajun 2 1 2,192 6.0% 2,061 3,273,725 Big Cajun 2 2 2,140 6.0% 2,012 3,408,652 Big Cajun 2 3 2,114 6.0% 1,987 3,594,632
Brame Energy Center 2 2,257 6.0% 2,121 2,677,857 Brame Energy Center 3 2,439 6.0% 2,292 1,992,364
Average Emissions Rate: 2,323 2,184
Building Block 1, Coal-Fired Heat Rate Efficiency
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Coal Plant Efficiencies
EPA applies a six percent thermal efficiency improvement factor for each coal generation facility, setting a 139 lbs/MWh reduction target.
Source: EPA Clean Power Plan Proposed Rule Technical Documents, available at: http://www2.epa.gov/carbon-pollution-standards/clean-power-plan-proposed-rule-technical-documents.
Building Block 1 Issues
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Coal Plant Efficiencies
There are a number of incorrect and problematic assumptions included in the development of this building block:
• Use of gross rather than net heat rate reductions.
• Statistical modeling used for heat rate analysis is flawed.
• Fails to consider recent efficiency gains/new pit technologies.
• Fails to consider efficiency losses of control technologies from other EPA rules.
• Cannot be practically done given new source review standards.
• Fails to examine or consider stranded generator costs (rate impacts).
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Building Block 2: Increased NGCC Utilization
Recent Trends in Louisiana Gas-Fired Generation
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NGCC Utilization
Louisiana’s natural gas heat rates have fallen 9.7 percent in the last 10 years (at an average annual rate of one percent); and natural gas-fired emissions have fallen 11.2
percent (at an average annual rate of 1.2 percent).
1,150
1,200
1,250
1,300
1,350
1,400
9,500
10,000
10,500
11,000
11,500
12,000
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Natural Gas Heat Rate Natural Gas Emissions
Hea
t Rat
e (B
tu/k
Wh)
Source: 2012 EPA Clean Air Markets database.
Louisiana NGCC Efficiencies and Utilization
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NGCC Utilization
On average, Louisiana’s NGCC units operate at heat rates that are 29 percent lower than Louisiana’s steam units and emit 30 percent less emissions.
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013NGCC Heat Rate Steam Heat RateNGCC Emissions Steam Emissions
Hea
t Rat
e (B
tu/k
Wh)
Em
issions (lbs/MW
h)
Building Block 2, Natural Gas CC Dispatch
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NGCC Utilization
EPA assumes all natural gas-fired combined cycle units can be re-dispatched at a rate of 70 percent. This increases the NGCC generation from 19.8 million
MWh to over 40 million MWh, an increase of 102 percent.
Source: 2012 EPA Clean Air Markets database.
EPA EPA Highest HighestNameplate 2012 Estimated Assumed in Last in Last
Capacity Generation Generation Increase 10 Years 5 Years(MW) (%)
Louisiana 1 406.3 2,949,067 2,498,257 -12.6% 99.5% 99.3%Coughlin Power Station 922.8 1,434,842 5,674,113 52.3% 26.9% 26.3%Sterlington 226.3 4,610 1,391,473 69.8% 15.6% 1.4%Acadia Energy Center 1,376.0 4,785,503 8,460,749 30.4% 40.8% 40.8%Carville Energy LLC 570.0 2,899,630 3,504,816 12.1% 62.6% 62.6%Ouachita 903.9 1,658,025 5,557,900 49.1% 20.8% 20.8%Washington Parish Energy Center 655.0 - 4,027,464 70.0% 0.0% 0.0%Perryville Power Station 824.1 2,486,523 5,067,226 35.7% 29.4% 29.4%J Lamar Stall Unit 624.0 3,552,982 3,836,851 5.2% 43.0% 43.0%
Total 6,508 19,771,182 40,018,850 34.7%
Capacity Factor
------ (MWh) ------
Building Block 2 Deficiencies
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NGCC Utilization
There are a number of errors and problems with the EPA methodology:• Incorrect data. For instance, the EPA includes Washington Parish Energy Center
(655 MW) in Louisiana’s NGCC capacity totals. Other items include Louisiana 1, Perryville’s 2 CT unit and the omission of NGCCs under construction (Ninemile 6 and Morgan City 14-01).
• The EPA incorrectly uses nameplate capacity rather than net summer capacity to estimate the total NGCC potential.
• Fails to understand the gravity of the change on the use and operation of these units.
• Fails to examine ripple impacts to natural gas markets. The EPA does not consider the increased use of natural gas associated with a 102 percent increase in natural-gas fired capacity (in Louisiana alone).
• Does not adequately examine transmission constraints.• Fails to examine or consider stranded generator costs (rate impacts).
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Building Block 3a: “At Risk” Nuclear Power Generation
Building Block 3a, “At Risk” Nuclear Capacity
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At-Risk Nuclear
• In Building Block 3a, the EPA assumes 5.8 percent of the current nuclear fleet is “at risk.” This nuclear capacity is incorporated into state goals as zero emitting generation (at a 90 percent capacity factor).
• Nuclear is not considered a “dispatchable” resource as is NGCC capacity; and instead of redispatching from coal to nuclear like in Building Block 2, the expected generation is simply added to the state goal denominator – lowering the state goal emission rate.
• For Louisiana, this amounts to 985,225 MWh being added to the denominator (generation) to calculate the emissions rate.
Historic Trends in Nuclear Generation, Operating Plants and Generation
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At-Risk Nuclear
750
760
770
780
790
800
810
820
830
840
850
0
20
40
60
80
100
120
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Number of Operating Plants Generation
Num
ber o
f Pla
nts
Million M
Wh
Source: Energy Information Administration, U.S. Department of Energy.
The number of operating nuclear plants in the U.S. remained constant until this year, when four plants were retired. Nuclear generation has been falling in
the last five years.
Historic Trends in Nuclear Generation, Average Annual Capacity Factor
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At-Risk Nuclear
80%
82%
84%
86%
88%
90%
92%
94%
96%
98%
100%
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Cap
acity
Fac
tor (
%)
The average annual capacity factor of nuclear facilities has been between 86 percent and 92 percent.
Source: Energy Information Administration, U.S. Department of Energy.
Nuclear Power Plant Operating Challenges: Zero Dispatch
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At-Risk Nuclear
0%
2%
4%
6%
8%
10%
12%
0%
1%
2%
3%
4%
5%
6%
Dec-10 Jun-11 Dec-11
Wind Generation ERCOT Day Ahead ERCOT Real Time
% H
ours
Mar
ket i
s A
t or B
elow
Zer
o Wind G
eneration as a % of Total 0%
1%2%3%4%5%6%7%8%9%
0%
1%
2%
3%
4%
Jan-10 Jul-10 Jan-11 Jul-11 Jan-12 Jul-12
Wind Generation SPP Imbalance
% H
ours
Mar
ket i
s A
t or B
elow
Zer
o Wind G
eneration as a % of Total
ERCOT SPP
MISO PJM
0%2%4%6%8%10%12%14%16%18%20%
0%
1%
2%
3%
4%
5%
6%
7%
Jan-09 Jan-10 Jan-11 Jan-12Wind Generation Real Time Day Ahead
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
0%
1%
2%
3%
4%
Jan-09 Jan-10 Jan-11 Jan-12Wind Generation Real Time Market
% H
ours
Mar
ket i
s A
t or B
elow
Zer
o Wind G
eneration as a % of Total
% H
ours
Mar
ket i
s A
t or B
elow
Zer
o Wind G
eneration as a % of Total
Building Block 3a Deficiencies
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At-Risk Nuclear
• EPA’s allowance for “at risk” nuclear capacity effectively subsidizes unprofitable generation
• The basis for EPA’s “at risk” nuclear capacity estimates is weak and not well supported
• EPA’s “at risk” nuclear proposals are ambiguous on how nuclear generation will be treated for compliance purposes
• Unintended consequences of EPA’s Proposed Rule on nuclear generation.
• EPA should not expand its definition of “at risk” nuclear capacity.
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Building Block 3b: Renewable Generation
Building Block 3b, RE Potential
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Renewables
EPA assigns the states to one of six regions and sets a RE target for each, based on an average of all 2020 RPS requirements of the states in that region.
20%by 2020
10%by 2020
10%by 2020
33%by 2020
30%by 2020
20%by 2020
15%by 2020
15%by 2020
20%by 2020
22%by 2020
West Average: 22%
South Central Average: 20%
South East Average: 10%
DE: 19% by 2020DC: 20% by 2020MD: 18% by 2020NJ: 22% by 2020PA: 8% by 2020OH: 9% by 2020
East CentralAverage: 16%
CT: 23% by 2020ME: 40% by 2020MA: 22% by 2020NH: 20% by 2020NY: 29% by 2020RI: 16% by 2020
NortheastAverage:
25%
16%by 2020
10%by 2020
30%by 2020
10%by 2020
North Central Average: 15%
10%by 2020
Louisiana’s Existing Biomass Capacity
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Renewables
Louisiana’s biomass capacity totals 445 MW. However, almost 60 percent of this capacity (262 MW) is over 30 years old.
Source: Energy Information Administration, U.S. Department of Energy.
Online FacilityCompany Name Generator Id Capacity Date Age Fuel
(MW) (years)
Agrilectric Power Partners Ltd GEN1 12.1 1984 30 Agricultural ByproductBoise Packaging & Newsprint LLC TG 61.5 1969 45 Wood/Waste WoodTemple-Inland Corp NO10 37.0 1999 15 Wood/Waste WoodTemple-Inland Corp NO8 25.0 1981 33 Wood/Waste WoodTemple-Inland Corp NO9 37.5 1979 35 Wood/Waste WoodIPC-Mansfield Mill GEN1 40.0 1981 33 Black LiquorIPC-Mansfield Mill GEN2 40.0 1981 33 Black LiquorIPC-Mansfield Mill GEN3 30.0 1981 33 Black LiquorM A Patout & Sons Ltd 1000 1.0 1981 33 Agricultural ByproductM A Patout & Sons Ltd 2000 2.0 1981 33 Agricultural ByproductGeorgia-Pacific Consr Ops LLC-Port Hudson GEN1 67.7 1986 28 Black LiquorKPAQ Industries LLC GEN2 12.5 1966 48 Black LiquorRed River Mill Intl Paper Company 3 T-G 78.8 2008 6 Black Liquor
Total 445.1
NREL Estimated Technical Potential for Onshore Wind Power by State
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Renewables
Source: National Renewable Energy Laboratory, U.S. Department of Energy.
Thousand GWh
< 5050 – 100100 – 500500 – 1,000> 1,000
Louisiana is not likely to be installing much onshore wind power.
NREL Estimated Technical Potential for Utility-Scale Solar PV by State
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Renewables
Thousand GWh
< 1010 – 5050 – 7575 – 100> 100
Large amounts of solar is unlikely as well.
Source: National Renewable Energy Laboratory, U.S. Department of Energy.
NREL Estimated Technical Potential for Biopower by State
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Renewables
Source: National Renewable Energy Laboratory, U.S. Department of Energy.
Thousand GWh
< 11 – 55 – 1010 – 15> 15
Biomass is Louisiana’s most likely option for increasing renewable generation.
Building Block 3b, Louisiana Renewable Requirements
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Renewables
Under Building Block 3, the EPA expects Louisiana to be able to increase current renewable generation to 7 percent of total generation by 2030, an increase of 184 percent from current levels.
0
1
2
3
4
5
6
7
8
2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
Target Baseline
Mill
ion
MW
h
Building Block 3: Renewable Energy Growth
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Renewables
Under Building Block 3, the EPA expects Louisiana to be able to increase current renewable generation to 7 percent of total generation by 2030, an increase of 184 percent from current levels.
Per
cent
Cha
nge
in R
enew
able
Gen
erat
ion
0%
5%
10%
15%
20%
25%
30%
AL
AK AZ
AR
CA
CO CT
DE FL GA HI
ID IL IN IA KS
KY LA ME
MD
MA MI
MN
MS
MO
MT
NE
NV
NH NJ
NM NY
NC
ND
OH
OK
OR PA RI
SC
SD TN TX UT
VA
WA
WV WI
WY
2012 Renewable Percentage 2030 Goal Percentage
Building Block 3b Deficiencies
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Renewables
There are a number of problems with the EPA methodology:• The EPA targets are based upon an erroneous method of averaging..• Louisiana’s RE potential differs considerably from other states in this region.• EPA’s calculations are in error (capacity vs. generation). The Kansas RPS is a
capacity based goal, and correcting for this will change generation based targets significantly.
• It is well documented the Louisiana has limited technical RE capabilities. • The EPA’s proposed rule is ambiguous on the degree to which states will be
allowed to use biomass to meet RE generation targets.• EPA fails to recognize the age of existing RE facilities in Louisiana. Most of the
State’s non-hydro RE generation was developed in the late 1970s and 1980s.• EPA assumptions are inconsistent with the findings of the LPSC RPS
proceeding. The LPSC has already analyzed the opportunities for RE in the State.
• The EPA fails to consider lost fixed cost recovery (lost revenues or rate impacts).
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Building Block 4: Increased End-Use Energy Efficiency
Building Block 4, Energy Efficiency Deployment
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Energy Efficiency
EPA determines the total MWh sales that could potentially be avoided through demand-side energy efficiency measures.
Cum
ulat
ive
Sav
ings
as
a P
erce
nt o
f Sal
es
0.0% 0.2%0.6%
1.1%1.9%
2.7%
3.7%
4.8%
5.9%
6.9%
7.8%8.6%
9.3%10.0%
0%
2%
4%
6%
8%
10%
12%
2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
Incremental EE Savings Cumulative EE Savings
0.2 percent increase per year
1.5 percent increase per year
Building Block 4 Deficiencies
Energy Efficiency
There are a number of problems with the EPA methodology:
• Inappropriate method of determining technical potentials.
• Fails to examine cost-effectiveness.
• Fails to recognize that prior potentials arose in high-cost energy environment.
• Fails to consider rate impacts and lost base revenues.
• Fails to consider CHP potentials at industrial facilities.
• Fails to examine total rate and ratepayer impacts adequately (cumulative impacts).
40© LSU Center for Energy Studies
Building Block 4, Energy Efficiency
Energy Efficiency
Source: 40 C.F.R. Part 60, pp. 34873-34874.
Under Building Block 4, the EPA assumes it is practical for all states to implement demand-side portfolios such that 1.5 percent of annual sales growth per year are reduced. The compounded effect results in a full 1.1 percent of total annual sales being avoided by Louisiana in 2020, and 9.3 percent
of total annual sales being avoided by 2029. This is an increase
Per
cent
Incr
ease
in E
E
0%
500%
1000%
1500%
2000%
2500%
3000%
3500%
4000%
4500%
5000%
AL
AZ
AR
CA
CO CT
DE FL GA ID IL IN IA KS
KY LA ME
MD
MA MI
MN
MS
MO
MT
NE
NV
NH NJ
NM NY
NC
ND
OH
OK
OR PA RI
SC
SD TN TX UT
VA
WA
WV WI
WY
The increase is actually greater than 5,000 percent
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New Natural Gas End Uses & Fuel Diversity Concerns
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Conclusions
EPA Rulemaking Timeline
Conclusions
June 2014
EPA issuesproposed
Clean PowerPlan
Commentsdue on
proposedplan
December2014
Target datefor EPA to
issue Final Rule
Target datefor states to
submit proposedImplementation plans
June2015
June2016
December2015
December2016
States develop individual implementation plans
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Conclusions
Conclusions
• Regardless of your opinion on carbon regulation, there are a number of problems and challenges with the EPA rule.
• Inefficient way to regulate carbon emissions: fails to examine cost-effectiveness, represents the worst in command and control regulation by (a) not utilizing market-based approaches and (b) forcing resource decisions on state regulators.
• This rule has very little to do with environmental regulation, and everything to do with utility regulatory resource planning.
• The costs to Louisiana ratepayers could be considerable. Some concerns this could create a significant near-term reliability challenge as well.
44© LSU Center for Energy Studies
Questions, Comments & Input
Conclusions
CAVEAT: The views and opinions provided in this presentation are those of the author and do not necessarily reflect the official position of the State of Louisiana nor any Louisiana executive agency.
Comments, Questions
45© LSU Center for Energy Studies