new EPA carbon standards

The EPA is in the process of developing and implementing new ‘carbon pollution standards’ for all new and existing Power Plants.  The most recent pollution standard mandates reducing total Power Sector annual carbon emissions from the 2005 (baseline) level by 30% in 2030.  Achieving a 30% reduction in Power Sector 2005 carbon emissions should reduced total U.S. carbon emissions by up to 730 million metric tons per year (MMT/yr.).  The EPA has determined this level of reduced Power Sector carbon emissions can be readily achieved by expanding existing and installing new lower carbon technologies.

Within the next couple years all States are required to develop individual or collective multi-State reduced power generation carbon reduction compliance plans as needed to meet the new EPA carbon standards.  While the possible negative impacts on many Power Grids’ reliabilities, future Consumer power costs, and individual States’ economies are now being strongly debated, there is a fairly promising factor that has not been very clearly communicated in recent months.  Since 2005 the U.S. Power Sector has already achieved ‘half the EPA’s 2005 30% reduction standard’.  This means the sum of all States’ compliance plans only need to reduce total current carbon emissions up to (730/2=) 365 MMT/yr. by 2030.

Reducing the Power Sector’s total carbon emissions by 365 MMT/yr. will still be a significant challenge for most States and the costs will probably be quite significant.  To achieve new EPA carbon standards compliance each State must evaluate the many available and feasible options to reducing future power generation emissions and reliably optimize in-state power supply-demand.  Feasibly lower carbon technologies and options include: ‘fuels switching’ Coal-to-Natural Gas, expanding Renewable and Nuclear power generation, further increasing power generation & consumption efficiencies, expanding consumer ‘Demand Response’ capabilities, and possibly installing new developing ‘Carbon Capture and Sequestration’ (CCS) technologies.

Besides mandating that individual States develop acceptable compliance plans, the EPA regulation also allows multiple-State groups to develop ‘Flexible Clean Power’ plans.  In theory all States could group together and develop a single ‘National Power Sector’ compliance plan.  Such a strategy could possibly provide the highest level of market flexibility and minimize overall compliance costs for the Country as a whole.

One possible strategy to achieving the required 365 MMT/yr. reduction overall 2015-2030 would be to possibly build on the actions and operations implemented during 2005-2013.  To illustrate how existing technologies reduced Power Sector 2005-2013 carbon emissions by 365 MMT/yr. a detailed power generation & associated carbon emissions balance was developed based on DOE/EIA data. Refer to Table 1.

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Data Source - EIA Table 7.2b and Table 12.6. Note: Coal’s average carbon emission of 1,002 (thousand metric tons) KMT per TWh is equivalent to a power generation carbon intensity of 2,209 lbs. carbon per MWh. This is over double the maximum EPA allowed levels for all future new and existing power plants.

Table 1 clearly shows how total Power Sector carbon emissions declined by 365 MMT/yr. (or 15% of the 2005 baseline level) during 2005-2013.   The reduction in carbon emissions was obviously achieved by reducing Coal and Petroleum Power net generation levels and replacing nearly all of this higher carbon intensity power generation capacity with lower carbon Natural Gas, Renewables and Nuclear Power.  The primary incentives for this very significant shift in net power generation technologies was a combination of Free Market based factors (lower cost natural gas), Government subsidies (such as renewable power ‘Production Tax Credits’ (PTC) and individual State ‘Renewable Portfolio Standards’ (RPS)), and other recent EPA regulations such as the ‘Mercury and Air Toxics Standards’ (MATS).  The combination of increased consumer efficiency and the negative impacts of the 2007-09 economic recession caused total net power consumption to decrease by a modest 0.2% level 2005-2013.

The EIA data clearly shows that the combination of ‘fuels or energy switching’ from coal to cleaner power generation sources was the primary reason for reduced Power Sector carbon emissions 2005-2013.  To illustrate the level of individual cleaner power generation technology contributions towards the overall reduced carbon emissions, a second detailed balance was developed based on available DOE/EIA data.  Refer to Table 2.

reduced carbon emissions

Data Source – EIA data from Table 1.  Note: Natural Gas and Nuclear carbon emission reductions are based on displacing 100% coal ‘baseload’ capacity and average KMT Carbon/TWh emissions for 2013.  Wind & Solar estimated carbon emission reductions are based on displacing 90% natural gas and 10% petroleum ‘intermediate/peaking’ power capacities.

Since 2005 the single largest technology source of reduced Power Sector carbon emissions has been due to ‘fuels switching’ from Coal-to-Natural Gas net power generation (77% of the total reduction).  Fuels switching normally means that Coal (conventional steam boiler/turbine) power plant generation capacity has been replaced by state-of-art Natural Gas, high efficiency gas turbine power generation capacity (largely CCGT technologies).  Displacing Coal Power generation was achieved by a combination of installing new CCGT capacity and utilizing existing excess capacity.

The second largest source of reduced carbon emissions was due to expanded Wind net power generation (20%).  Wind Power has been the fastest growing renewable power source due to its favorable economics (including PTC subsidies and RPS incentives) compared to all other renewable power sources.  The balance of Power Sector carbon reductions is due primarily to other zero carbon technologies including a small increase of Nuclear (2%) and Solar Power (1%) net generation, and total reduced power consumption (<1%).  The smallest contributing factor (<0.1%) has been due to ‘other renewables’ (wood, other biomass/waste & geothermal).

Future Options to Reducing U.S. Power Sector Carbon Emissions – The feasible options to reducing U.S. total Power Sector emissions by another 365 MMT/yr. 2015-2030 are numerous.  Obviously the optimal solution(s) will involve some combination of displacing high carbon intensity Coal Power with lower-zero carbon power generation alternatives, possibly installing newly developing CCS technologies with new fossil fuels power generation capacity, and significant growth in consumer efficiency or reduced future power consumption growth.

Each State will have the option of choosing a different mix of available technology solutions or teaming up with multiple other States to reduce combined generation carbon emissions.  A reasonable strategy for achieving future U.S. Power Sector carbon emissions reductions would be to possibly build on the successful changes made during 2005-2013 or recent actions taken by individual and regional State networks.  A very good example would be possibly following the strategies used by individual lower carbon emission States (such as California) or group/regional States (such as Regional Greenhouse Gas Initiative (RGGI-10)).   

A recent TEC Post documents (refer to Table 1) that RGGI-10+CA States have average power generation carbon intensities almost half (666 lbs./MWh vs. 1,258 lbs./MWh) of the balance of (non-RGGI+CA) States.  This lower carbon intensity power generation performance has been achieved by operating about 90% less Coal Power, 85% greater Natural Gas, 70% greater Renewables, and 40% greater Nuclear Power generation capacities on average compared to all other non-RGGI+CA States.  Refer to Table 2 of the same TEC Post. 

Based on these currently successful strategies and other feasible options to reducing overall U.S. Power Sector carbon emissions by an additional 365 MMT/yr. 2015-2030 a number of different compliance strategies are currently under development.  Some of the more promising compliance strategies will be covered in a future TEC ‘New EPA Carbon Standards Compliance Strategies: Part 2’ Post.