Southeast emissions could rise without renewables — study

Source: Kristi E. Swartz, E&E reporter • Posted: Thursday, June 30, 2016

The Southeast runs the risk of increasing carbon emissions while trying to comply with the Clean Power Plan if states add natural gas generation to meet demand without offsetting it with renewables and energy efficiency, according to a new study from Georgia Tech.

This is because the region likely will shutter the largest number of coal units to meet U.S. EPA’s rule, which broadly requires a 30 percent reduction in greenhouse gas emissions from existing power plants by 2030.

Electric companies in those states said they will replace that generation largely with natural gas. This will lead to higher emissions rates unless those power plants are controlled as well, the study says.

“You’ll be saddled with all this gas-based carbon emissions as you try to get further in your carbon reduction,” said Marilyn Brown, a Georgia Tech professor and co-author of the study titled “The Clean Power Plan and Beyond.”

The Obama administration’s signature rule is tied up in court. Experts expect an appeal to the Supreme Court regardless of the outcome.

All of the Southeastern states and many of the regulated electric companies that operate in them have sued to stop the rule. Most are not actively working on a compliance plan.

Brown, also a board member of the Tennessee Valley Authority, said she continues to have some private conversations with state air regulators, however.

The study’s authors used Georgia Tech’s version of national energy modeling and U.S. Energy Information Administration data to review a number of state compliance strategies. Broadly, the study reveals that states will have the best emissions-reduction results if they look beyond the 2030 timeline and incorporate renewables and energy efficiency into their strategy, especially if natural gas significantly comes into play.

Doing so will control emissions and prevent a sharp increase in electric utility bills, the study says.

Overbuilding with natural gas plays into one concern with the Clean Power Plan. This is over emissions shifting, or “leaking,” to new power plants, which aren’t covered by the EPA rule. Energy efficiency is a way to minimize leakage, Brown said.

“If you are going to just regulated existing power plants, you’d really better have a great energy efficiency program,” she said.

The Southeast stands out for a number of reasons when it comes to EPA’s carbon rule. First, many states are leaning toward a compliance plan that will require power generators to meet a specific rate of emissions to meet their goals. Secondly, because electricity rates are lower, the region has been slower to adopt renewable energy and energy efficiency.

Brown, a co-founder of the Southeast Energy Efficiency Alliance, pushes energy efficiency as a chief way to control demand.

She’s equally aware of the challenges that such a strategy faces. Regulated electric companies make money by building large power plants and recouping their money plus earning a return. This means they will be encouraged to build natural gas and nuclear instead of using energy efficiency to curb demand.

There policies are different from traditional energy efficiency models and would make sure electric companies aren’t losing revenue if they invest in energy efficiency. Brown encourages this.

“Make the utilities whole so they are not losing out by investing in efficiency,” she said. “Let them have the return on those investments, too.”

Critics of the Clean Power Plan argue that it will drive up customer bills. This is because utilities will be forced to shut down coal plants, build more natural gas and add significant amounts of renewable energy, all of which customers wind up paying for, they argue.

Using EIA data, the study shows that electricity bills per capita are forecast to increase by 12 percent between 2012 and 2030. However, bills will fall to 2012 levels if energy efficiency and solar policies are adopted as part of compliance strategies, Brown said. This is because these strategies will curb demand and lower electricity rates.

This story also appears in EnergyWire.