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

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
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
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
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Two-year extension possible for adopting regional plans – Programs go into effect upon adoption of state plans, unless superseded by federal plan
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
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
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
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
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
12. Renewable Portfolio Standards - 29 States + Washington D.C. and Puerto Rico - 7 more States Source: dsireusa.org
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
15. Renewable Energy Basics •Definition of “renewable.” Resources that naturally regenerate as quickly as they are used by people.
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
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?
24. ?
25. About Center for Resource Solutions A nonprofit creating policy and market solutions to advance sustainable energy since 1997.
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.
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
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
29. Upcoming Events Renewable Energy Markets Conference December 2-4th, Sacramento, CA Learn more at: www.renewableenergymarkets.com/