webinar series - Southeast Energy Efficiency Alliance

WEBINAR SERIES EPA’s Final Clean Power Plan August, 25, 2015

Abby Fox, Policy Manager Southeast Energy Efficiency Alliance | www.seealliance.org

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SEEA Serves the Southeast The Southeast Energy Efficiency Alliance (SEEA) promotes energy efficiency as a catalyst for economic growth, workforce development and energy security. We do this through collaborative public policy, thought leadership, outreach programs, and technical advisory activities.

Regional Energy Efficiency Organization Eleven-state footprint Non-profit, non-partisan

Southeast Energy Efficiency Alliance | www.seealliance.org

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GoTo Webinar Instructions Open and hide your control panel Join audio: • Choose “Mic & Speakers” to use VoIP • Choose “Telephone” and dial using the information provided Questions • Submit questions and comments via the Questions panel


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Cyrus Bhedwar Policy Director [email protected]


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SEEA’s Clean Power Plan Portal

www.seealliance.org Southeast Energy Efficiency Alliance | www.seealliance.org

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Abby Fox Policy Manager [email protected]


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Today’s Agenda  Mechanics of the Rule  Southeastern Targets  Implementation  The Role of Energy Efficiency  Q&A


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Mechanics of the Rule

A Two-Step Process

STEP 1: EPA sets stringency guidelines for states


STEP 2: States develop and implement compliance plans

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Steps in Target-Setting Process Starting Regional Rate Averages for Fossil Steam/NGCC Units

• Apply “Best System of Emission Reduction” (BSER)

Post-BB Regional Rate Averages for Fossil Steam/NGCC Units

• Select Least Stringent Regional Goals for Each Sub-Category

Nationally Uniform Rate Averages for Fossil Steam/NGCC Units

• Weight by State Generation Mix

State-Specific Targets


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Three BSER Building Blocks Building Block 1: Heat Rate Improvements—reducing the carbon intensity of generation at coal steam units through region-specific heat rate improvements.

Building Block 2: Re-dispatch to Natural Gas Combined-Cycle (NGCC)—redispatching generation from higher to lower emitting units.

Building Block 3: Renewable Energy — greater use of new renewable energy, based on historical RE deployment.


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Southeastern Targets

Rate Reductions for Southeastern States (lbs CO2/MWh) 2,500

Range Under Draft Rule 2,000

1,500

1,000

500

0 KY

TN

SC

NC

Historic 2012

AR

LA

Interim Rate Goal


GA

AL

MS

VA

FL

Final Rate Goal 13

Mass Reductions for Southeastern States (Millions of Tons of CO2 Emissions) 120 100

Millions

80 60 40 20 AL

AR

FL

GA

Historic 2012 Southeast Energy Efficiency Alliance | www.seealliance.org

KY

LA

MS

Interim Mass Goal

NC

SC

TN

VA

Final Mass Goal 14

Mass Reductions with New Source Complement (Millions of Tons of CO2 Emissions) 120

Millions

100 80 60

40 20 AL

AR

FL

GA

KY

Historic 2012 Final Mass Goal w/New Source Complement Southeast Energy Efficiency Alliance | www.seealliance.org

LA

MS

NC

SC

TN

VA

Interim Mass Goal w/New Source Complement

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Learn More at Our Conference!


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Implementation

Implementation Timeline Submittals ▪ September 6, 2016: All states submit final plans, or initial submittal with an extension request. ▪ September 6, 2017: States that receive an extension submit progress update. ▪ September 6, 2018: Deadline to submit final state plans, for states with maximum two-year extension. ▪ July 1, 2021: States submit milestone (status) report.

INTERIM AND FINAL GOAL PERIODS ▪ 2022-2024: Interim step one period (Reporting: July 1, 2025).

Clean Energy Incentive Program (2020-2021)

▪ 2025-2027: Interim step two period (Reporting: July 1, 2028). ▪ 2028-2029: Interim step three period (Reporting: July 1, 2030). ▪ 2030: Start of final goal compliance period (Reporting: July 2, 2032 and every two years beyond). Southeast Energy Efficiency Alliance | www.seealliance.org

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Stepped “Glide Paths”

Source: U.S. EPA


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State Plan Approaches ▪ Emission Standards: Assigns all requirements to affected EGUs. ▪ State Measures (mass): Contains a mix of measures that may apply to affected EGUs and state-enforceable measures that apply to other entities, with a backstop of federally-enforceable standards on affected EGUs. ▪ Various Permutations: Rate vs. mass, distribution of compliance obligations across units, use of new source complement, trading, etc.


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The Role of Energy Efficiency

Specific Functions of Energy Efficiency Depending on the type of plan, energy efficiency can: ▪ Generate tradeable, bankable credits. ▪ Serve as a state-enforceable measure within a compliance plan (mass only). ▪ Serve as a complementary, non-enforceable, cost-reducing measure.


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Clean Energy Incentive Program ▪ 2020-2021 “early action” ▪ Pool of federal credits or allowances up to 300 million short tons of CO2 emissions

▪ Reserve for energy efficiency projects in low-income communities and matching credits/allowances (also renewables)


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Clean Power Plan Resource Paper Series


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Follow-up Materials ▪ Clean Power Plan Portal link ▪ Webinar recording/slides ▪ SEEA Conference materials ▪ NEW: Regional primer


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Questions and Answers


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Other Key Changes ▪ EGUs are the only entities with federally enforceable requirements ▪ Reliability safety valve

▪ Additional flexibility and guidance on interstate trading ▪ Release of draft federal plan ▪ Release of draft EM&V guidance


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Rate-Based Approaches Approach Sub-Categorized Emission Rates

Type

Emission Standards

Treatment of EE May be used in generating Emission Rate Credits (ERCs).

State Emission Rates Emission Standards

May be used in generating ERCs.

Emission Standards

May be used in generating ERCs.

Differing Emission Rates


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Mass-based Approaches Approach

Type

Treatment of EE

Mass Goal for Existing Units

Emission Standards Energy efficiency as a strategy for meeting limit at lesser cost, but complementary to the plan.

Mass Goal for Existing and New Units (Mass Complement)

Emission Standards Energy efficiency as a strategy for meeting limit at lesser cost, but complementary to the plan.

State Measures: Mass Goal for Existing Units

State Measures

Could include energy efficiency policies and programs that are enforceable under state law.

State Measures State Measures Mass Goal for Existing and New Units (Mass Complement)

Could include energy efficiency policies and programs that are enforceable under state law


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