Tracking Renewable Energy for the U.S. EPA's Clean Power Plan: Guidelines for States on 111(d)

A presentation that explains how existing renewable energy certificate (REC) tracking systems can be used as an integral part of state compliance for the EPA's Clean Power Plan. These REC tracking systems, together with state policies designed to increase the production and use of renewable electricity, will be critical to states looking to use renewable energy like wind and solar to reduce the carbon intensity of their power sector. This presentation is intended for air and electricity regulators, as well as renewable energy advocates that are interested in participating in the Clean Air Act Section 111(d) comment period.

With CRS Chief Counsel Robin Quarrier; David Farnsworth, Senior Associate at Regulatory Assistance Project (RAP); and CRS Senior Project Manager Rachael Terada. Originally aired September 30, 2014. View the full webinar recording with audio on Vimeo here.

Transcript

1. View Slide

2. Overview of Presentation
   • Intro. CRS RAP paper
   • The Clean Power Plan
   – Cooperative Federalism—111(d)
   – Building Blocks in Perspective
   – Compliance Options
   • Tracking Systems
   • Compliance, Renewables, & RECs
   • Conclusions
   

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3. 111(d) Structure
   • Federal/State framework
   • Similar to CAA §110 Process for
   State Implementation Plans
   – EPA sets standards
   – States develop plans to comply
   – EPA reviews and
   • Approves, or if inadequate then
   • Imposes federal plan
   

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4. Clean Power Plan–EPA
   • Sets emissions goals for states to reach by 2030 that
   apply to state fossil units.
   • Gives states compliance flexibility.
   • Schedule:
   – 6/14 Draft published in Federal Register
   – 12/14 End of Public Comment Period
   – 6/15 Final Rule
   

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5. Clean Power Plan—States
   • 6/16 Initial state submittal
   – One-year extension possible for adopting single-state
   plans
   – Two-year extension possible for adopting regional
   plans
   – Programs go into effect upon adoption of state plans,
   unless superseded by federal plan
   

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6. “Adjusted Output-Weighted
   Average CO2 Emission Rates”
   TOTAL CO2
   EMISSIONS
   from Coal-, Oil- & Gas-fired Steam,
   Natural Gas Combined Cycle
   & “Other” Units (Affected EGUs)
   TOTAL NET ENERGY OUTPUT
   From Affected EGUs
   + Renewables + New Nuclear + 6% at-risk
   nuclear + cumulative annual EE savings
   Lbs
   MWh
   Or Convert the Goal to Tons.
   Source: Franz Litz, Great Plains Institute
   

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7. Building Blocks
   • Heat Rate Improvements
   • Increased Use of Existing Natural Gas
   • Increased Use of carbon-free resources
   – RPSs and
   – Preserving at-risk nuclear, and counting planned
   nuclear)
   • End-Use Energy Efficiency
   

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8. Common Misconception
   • “Building Blocks are compliance models”
   – Compliance can rely on those approaches, and in
   whatever combination states choose…but
   • There are many other choices
   – New gas
   – Plant retirements
   – CHP
   – Incremental renewable resources
   

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9. Renewable Energy under 111(d)
   • There is a role for Renewable Energy, but what does it
   look like?
   • What exists today?
   – Programs
   – Policies
   – Tools
   

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10. CRS/RAP Paper
    1. Purpose
    2. Audience
    a) Air Regulators, not renewable energy
    technical experts
    b) Need to know what is out there- RECs
    and tracking systems
    3. Conclusions
    

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12. Renewable Portfolio Standards
    - 29 States + Washington D.C. and Puerto Rico
    - 7 more States
    Source: dsireusa.org
    

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14. The Case for RECs
    1. Build on existing policy
    2. No double counting
    3. References to null power in technical
    document
    4. Interstate transfers of renewable energy
    

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15. Renewable Energy Basics
    •Definition of “renewable.” Resources that naturally
    regenerate as quickly as they are used by people.
    

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22. Compliance, Renewables & RECs
    • Expanding upon an RPS
    – In a rate-based program—lb. CO2
    /Mwh
    – In a mass-based program—tons/year
    • Does REC reflect CO2
    of orig. region?
    – A REC produced in OK (SPP) sold into IL (PJM or
    MISO)
    – Establishing reasonable emissions factors
    

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23. RECs for Compliance—cont.
    • Will capped regions need to adjust cap to reflect
    incremental RE production?
    – One model: RGGI Voluntary RE Set-Asides
    • Adjust cap to reflect RE carbon attributes
    sold/claimed?
    • Will this be de minimus or a cost to RE
    developers?
    • Will originating states continue to support RE
    development through a production-based true up?
    

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24. ?
    

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25. About Center for Resource Solutions
    A nonprofit creating policy and market solutions
    to advance sustainable energy since 1997.
    

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26. • The Regulatory Assistance Project (RAP)
    is a global, non-profit team of energy
    experts, mostly veteran regulators,
    advising current regulators on the long-
    term economic and environmental
    sustainability of the power and natural gas
    sectors. (www.raponline.org)
    • David Farnsworth has been with RAP
    since 2008. He served as a hearing officer
    and staff attorney with the Vermont Public
    Service Board from 1995 to 2008. From
    2003 to 2008, he was a member of the
    Regional Greenhouse Gas Initiative
    (RGGI) Staff Working Group.
    

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27. Robin Quarrier
    Chief Counsel
    Center for Resource Solutions
    415-568-4285
    robin@resource-solutions.org
    Rachael Terada
    Senior Project Manager
    Center for Resource Solutions
    415-561-2135
    rachael@resource-solutions.org
    CONTACT
    David Farnsworth
    Senior Associate
    Regulatory Assistance Project
    802-498-0708
    dfarnsworth@raponline.org
    

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28. Conclusions
    1. Existing RE policies can be strengthened
    under 111(d)
    2. 111(d) can increase demand for renewable
    energy
    3. Preventing double counting should be a key
    part of any state plan
    4. Use existing network of tracking systems for
    renewable attributes
    5. The use of RECs will help reduce the risk of
    double counting
    

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29. Upcoming Events
    Renewable Energy Markets Conference
    December 2-4th, Sacramento, CA
    Learn more at: www.renewableenergymarkets.com/
    

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