NRDC presses EPA for ‘very ambitious’ standards for existing power plants

Source: Jean Chemnick, E&E reporter • Posted: Friday, March 21, 2014

If U.S. EPA proposes a tough carbon standard for existing power plants, it won’t risk sacrificing energy affordability or reliability, a prominent environmental group said today.
The Natural Resources Defense Council released a new analysis of its 2012 report on how EPA could use the Clean Air Act’s Section 111(d) to rein in emissions from today’s power plant fleet. It argued that there are ample opportunities for efficiency and low-carbon energy to allow states to satisfy even very stringent reduction targets.Dan Lashof, director of NRDC’s Climate and Clean Air Program, said at a briefing at the National Press Club that the report was intended to encourage EPA to write a tougher rule.

“What we show in this analysis is that EPA can be very ambitious indeed and get reductions of as much as 700 million tons by 2020 and have very large benefits to show for it,” he said. “So, we hope to influence what they eventually propose.”

Most observers expect EPA to set reduction targets for heat-trapping emissions and leave states the task of deciding how standards should be met.

The widely circulated NRDC proposal recommends EPA look at a state’s current fossil fuels mix and then base its standard on that — averaging in 1,500 pounds per megawatt-hour for the share of the state’s portfolio derived from coal and 1,000 pounds per MWh for gas-fired units.

Today’s coal plants regularly emit more than 2,000 pounds per MWh, so a state that is heavily dependent on coal-fired generation would be required to make deep cuts by the time the rule phased in in 2020. Kentucky, for example, would be assigned a weighted average of 1,480 pounds per MWh.

But opportunities exist in every state to help them meet this high standard, Lashof argued.

The NRDC proposal has often been criticized as relying too heavily on demand-side efficiency, but today’s analysis concludes that utilities could deploy more renewable or low-carbon energy to reduce emissions as well and that those options would also be low-cost.

Less consumer efficiency would mean less emissions avoided, it found — unless EPA ratcheted the weighted average for emissions down to an “ambitious” 1,400 pounds per MWh base line for coal plants, at which point options including carbon capture and storage would come into greater use and emissions reductions would be greater, it said.

The greatest emissions reductions would come from a renewal of the renewable energy production tax credit, which would ensure that many utilities used wind power and other technologies to comply.

But the analysis, which used information from the U.S. Energy Information Administration’s 2013 “Annual Energy Outlook,” shows the emissions reductions could be made economically.

NRDC puts the cost of its most stringent scenario at $7 billion by 2020 and claims health and environmental benefits of nearly $30 billion.

Richard Caperton of Arlington-based Opower, which develops energy management tools, said there are still opportunities to make demand-side efficiency improvements even in states that already have ambitious policies in place.

“No state in the country has gotten anywhere near saturating their efficiency market,” he said. “We see significant savings in every state, even the Californias and Vermonts of the country.”

Rob Gramlich, senior vice president of public policy for the American Wind Energy Association, said he expected ambitious rules to create an incentive for renewable energy, as well. New wind energy has the added benefit of providing lasting emissions reductions, he said, because once it is built it will continue to operate.

Lashof and others dismissed a question about whether a tough standard would place coal-dependent states at an economic disadvantage. A state’s response to the new rule would determine how it fared under the new regime, he said, not its fuel mix.

“The winners are going to be the state that get on this and get started right away, and the losers are the ones who drag their feet,” he said.