EPA's Final Clean Power Plan and Legal Basis
Explore the EPA's Final Clean Power Plan overview, legal basis under the Clean Air Act, standards of performance, and Section 111(d) guidelines for regulating existing sources. Learn about the major changes, regulatory framework, and clean energy incentive program included in the plan.
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Presentation Transcript
EPAs Final Clean Power Plan: Overview Steve Burr AQD, SIP Section September 1, 2015
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 2
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 3
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 4
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 5
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 6
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 7
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 CO2emissions rate of individual generating units. Measures to reduce the use of fossil-fuel fired generating units. Slide 8
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 CO2emissions. BB4: Reduce demand for fossil-fuel fired generation by improving energy efficiency of electricity consumers. Slide 9
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) Slide 10
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 11
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 12
Changes from Proposal Proposal Full application of BB2 by 2020 assumed Final Application of BB2 phased in beginning in 2022 In AZ = complete retirement of coal generation by 2020 13
Changes from Proposal Proposal Utility-scale RE in operation in 2012 + at-risk nuclear counted in goal calculation and compliance Final Not counted for either purpose Effect is a wash Energy efficiency (BB4) included in BSER and used to calculate goal BB4 no longer used to calculate goal, but may be used for compliance 14
Changes from Proposal Proposal Wide range of state goal rates: Final Narrower range of goal rates: Lowest: 215 (WA) Lowest: 771 (3 states) Highest: 1989 (Navajo) Highest: 1305 (5 states) Arizona goals: Arizona goals: Interim: 735 (49 % reduction) 1,173 (24 % reduction) Final: 702 (52 % reduction) 1,031 (34 % reduction) 15
Changes from Proposal Arizona Goal Rates Arizona Goal Rates 1,800 1,800 1,600 1,600 1,400 1,400 1,200 1,200 lbs CO2/MWh lbs CO2/MWh 1,000 1,000 Proposal Proposal Final 800 800 600 600 400 400 200 200 - - 2017 2017 2018 2018 2019 2019 2020 2020 2021 2021 2022 2022 2023 2023 2024 2024 2025 2025 2026 2026 2027 2027 2028 2028 2029 2029 2030 2030 Slide 16
Changes from Proposal Proposal Rate-to-mass conversion left to states Final Rule establishes state mass- based goals Trading allowed, but details unspecified Trading requirements and limitations established in rule for various emission standard types 17
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 18
Changes from Proposal Proposal Plan submission deadline: 6/30/2016 If initial submittal: Final Plan submission deadline: 9/6/2016 If initial submittal: 6/30/2017 deadline for single-state plans 9/6/2017 update on progress 9/6/2018 deadline for all plans 6/30/2018 deadline for multi- state plans 19
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 20
Regulatory Framework Options Goals 2 Rate-Based Separate, nationally uniform, performance rates for fossil fuel steam (FFS) and NGCC National Performance Rates (lbs CO2/MWh) Interim 1,534 832 Subcategory Fossil Steam NGCC Final 1,305 771 State rate-based CO2goals based on application of performance rates to each state s 2012 generation mix Arizona Rate-Based Goals (lbs CO2/MWh) Interim 1,173 Final 1,031 Slide 21
Regulatory Framework Options Goals (cont d) 2 Mass-Based For existing EGUs only Arizona Mass-Based Goals (short tons CO2) Interim 33,061,997 Final 30,170,150 For existing EGUs with new source complement Arizona Mass-Based Goals with New Source Complement (short tons CO2) Interim 34,486,994 Final 32,380,196 State plan must demonstrate achievement of one of these goals Slide 22
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) Slide 23
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 25
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 CO2 per MWh FF generation Slide 26
