The US Environmental Protection Agency (EPA) has released the final Clean Power Plan (CPP). The rules establish the first national standards to limit CO2 emissions from fossil-fuel-fired power plants, with a target of a 32% reduction against a 2005 baseline by 2030. The 32% reduction target is 9% more aggressive than in the draft proposal of the CPP released in 2014. (Earlier post.)
The 2030 target is in alignment with the Administration’s earlier economy-wide emissions targets, including the goal of reducing emissions to 17% below 2005 levels by 2020 and to 26-28% below 2005 levels by 2025. Under the Clean Power Plan, by 2030, renewables will account for 28% of national capacity, up from 22% in the proposed rule.
Carbon dioxide is the most prevalent greenhouse gas pollutant, accounting for nearly three-quarters of global greenhouse gas emissions and 82% of US greenhouse gas emissions. Fossil fuel-fired power plants are by far the largest source of US CO2 emissions, making up 32% of US total greenhouse gas emissions.
Under the CPP by 2030, emissions of sulfur dioxide from power plants also will be 90% lower compared to 2005 levels, and emissions of nitrogen oxides will be 72% lower, EPA said. EPA said that in addition to its projected climate benefits, the CPP will result in the avoidance each year of :
- 1,500 to 3,600 premature deaths
- up to 1,700 heart attacks
- 90,000 asthma attacks
- 300,000 missed work days and school days
EPA thus estimates that the CPP will result in public health and climate benefits worth an estimated $34 billion to $54 billion per year in 2030, against implementation costs of $8.4 billion.
In the US, there are 1,000 fossil-fuel-fired power plants with about 3,100 units covered by the CPP rule.
With the final rules, EPA is establishing the final emission guidelines for states to follow in developing plans to reduce greenhouse gas emissions from existing fossil fuel-fired electric generating units (EGUs). Specifically, the EPA is establishing:
CO2 emission performance rates representing the best system of emission reduction (BSER) for two subcategories of existing fossil fuel-fired EGUs: fossil fuel-fired electric utility steam generating units and stationary combustion turbines.
Emission Performance Rates (Adjusted Output-Weighted-Average Pounds of CO2 Per Net MWh from All Affected Fossil Fuel-Fired EGUs) Subcategory Interim Rate Final Rate Fossil Fuel-Fired Electric Steam Generating Units 1,534 1,305 Stationary Combustion Turbines 832 771
The EPA has determined that the BSER is the combination of emission rate improvements and limitations on overall emissions at affected EGUs that can be accomplished through any combination of one or more measures from the following three sets of measures or building blocks:
- Improving heat rate at affected coal-fired steam EGUs.
- Substituting increased generation from lower-emitting existing natural gas combined cycle units for reduced generation from higher-emitting affected steam generating units.
- Substituting increased generation from new zero-emitting generating capacity for reduced generation from affected fossil fuel-fired generating units.
State-specific CO2 goals reflecting the CO2 emission performance rates. EPA derived statewide rate-based CO2 emissions performance goals as a weighted average of the uniform rate goals with weights based on baseline generation for the two types of units (fossil steam and stationary combustion turbine) in the state.
The Clean Power Plan Final Rule also establishes an 8-year interim compliance period that begins in 2022 with a glide path for meeting interim CO2 emission performance rates separated into three steps: 2022-2024, 2025-2027, and 2028-2029. This results in interim and final statewide goal values unique to each state’s historical blend of fossil steam and NGCC generation.
Guidelines for the development, submittal and implementation of state plans that establish emission standards or other measures to implement the CO2 emission performance rates, which may be accomplished by meeting the state goals.
Implementation. EPA is establishing interim and final statewide goals in three forms:
- A rate-based state goal measured in pounds per megawatt hour (lb/MWh);
- A mass-based state goal measured in total short tons of CO2;
- A mass-based state goal with a new source complement measured in total short tons of CO2.
States are to develop and implement plans that ensure that the power plants in their state—either individually, together or in combination with other measures—achieve the interim CO2 emissions performance rates over the period of 2022 to 2029 and the final CO2 emission performance rates, rate-based goals or mass-based goals by 2030.
States may choose between two plan types to meet their goals:
Emission standards plan: includes source-specific requirements ensuring all affected power plants within the state meet their required emission performance rates or state-specific rate-based or mass-based goal.
State measures plan: includes a mixture of measures implemented by the state, such as renewable energy standards and programs to improve residential energy efficiency that are not included as federally enforceable components of the plan. The plan may also include federally enforceable source-specific requirements. The state measures, alone or in conjunction with federally enforceable requirements, must result in affected power plants meeting the state’s mass-based goal.
The plan must also include a backstop of federally enforceable standards for affected power plants that fully meet the emission guidelines and that would be triggered if the state measures fail to result in the affected plants achieving the required emissions reductions on schedule. States may use the final model for their backstop.
States will be required to submit a final plan, or an initial state plan with an extension request, 13 months after the final rule, or 6 September 2016. Final complete state plans must be submitted no later than 6 September 2018.
The final rule provides 15 years for full implementation of all emission reduction measures, with incremental steps for planning and demonstration that will ensure progress is being made in achieving CO2 emission reductions.
Each state plan must include provisions that will allow the state to demonstrate that the plan is making progress toward meeting the 2030 goal. The Clean Power Plan offers several options for states to show their progress for meeting interim CO2 emission performance rates or state CO2 emission interim step goals.
In addition to offering three multi-year “step down” goals within the interim period, the final rule also allows states to apply measures in a gradual way that that they determine is the most cost-effective and feasible.
During the interim period states are required periodically to compare emission levels achieved by their affected power plants with emission levels projected in the state plan and report results to EPA.
Among other implementation elements of the Clean Power Plan are:
Rewards States for Early Investment in Clean Energy, Focusing on Low-Income Communities: The Clean Power Plan establishes a Clean Energy Incentive Program that will drive additional early deployment of renewable energy and low-income energy efficiency. Under the program, credits for electricity generated from renewables in 2020 and 2021 will be awarded to projects that begin construction after participating states submit their final implementation plans.
The program also prioritizes early investment in energy efficiency projects in low-income communities by the Federal government awarding these projects double the number of credits in 2020 and 2021.
Grid Reliability: In addition to giving states more time to develop implementation plans, starting compliance in 2022, and phasing in the targets over the decade, the rule requires states to address reliability in their state plans. The final rule also provides a “reliability safety valve” to address any reliability challenges that arise on a case-by-case basis.
Energy Efficiency as Key Compliance Tool: In addition to on-site efficiency and greater are reliance on low and zero carbon generation, the Clean Power Plan provides states with broad flexibility to design carbon reduction plans that include energy efficiency and other emission reduction strategies. EPA’s analysis shows that energy efficiency is expected to play a major role in meeting the state targets as a cost-effective and widely-available carbon reduction tool.
Proposed Federal Implementation Plan: EPA is also releasing a proposed federal plan today. This proposed plan will provide a model states can use in designing their plans, and when finalized, will be a backstop to ensure that the Clean Power Plan standards are met in every state.
Requires States to Engage with Vulnerable Populations: The Clean Power Plan includes provisions that require states to meaningfully engage with low-income, minority, and tribal communities, as the states develop their plans. EPA also encourages states to engage with workers and their representatives in the utility and related sectors in developing their state plans.