EPA's Clean Power Plan

The final rule for EPA’s Clean Power Plan came out today.  This is the strongest action the Federal Government has taken to reduce the drivers of climate change.  The draft rule was put out in June 2014.  It proposed targets for CO2 emissions from power plants for each state.  The final rule made some adjustments to the proposed rule.  (A summary of the changes is available here.)

Each state’s target is expressed as a rate of CO2 emissions per unit of electricity generated (pounds of CO2 per MWh).  EPA computes the present rate (using 2012 data) and the targeted rate for the year 2030.  Stepwise targets are also set beginning in 2022.  The targets are different for each state because each state has different energy histories and capacities.  Washington, for example, has only one coal-fired power station while Ohio has many.  In the interest of fairness, EPA has come up with a formula and applied it to each state.

The formula takes into account four different things. 
1. Fuel efficiency of coal-fired power stations. 
2. Unused capacity at existing natural gas combined cycle (NGCC) power plants.
3. Reliance on nuclear and renewable energy sources.
4. [Demand side conservation was included under the draft rule, but this was dropped in the final rule.]

To compute future CO2 emissions targets, the formula assumes the following policy targets:
1.  Coal-fired power station efficiency should increase between 2-4% by 2030. 
2.  The use of NGCC power plants should increase to 75% of “net summer capacity” by 2030.
3.  Increase nuclear and renewables to 13% of supply by 2030.

Washington State’s emissions of CO2 from the electricity sector were 7 million tons.  These come almost totally from the Centralia coal power plant.  Washington’s rate of CO2 emissions was 763 lb/MWh.  The goal EPA set for WA in 2030 is 215 lb/MWh.  That is a drop of 72%.

The Centralia plant is scheduled to switch over to natural gas by 2030.  This fuel-switching should produce about a 44% drop in the state’s CO2 emissions rate (because natural gas emits less CO2 than coal per unit of electricity generated).  Since Washington will have no coal-fired power stations after 2030 and it has no plans to build more nuclear power stations, the additional required reduction in CO2 emission rate will have to come about by:
·      increasing the amount of time natural gas plants are run or
·      installation of new renewable energy such as wind or solar.

Reduction of demand through energy efficiency improvements, such as switching out incandescent light bulbs for LEDs, was part of the draft rule, but this was removed in the final rule.  Nonetheless, EPA expects that states will incorporate energy conservation and efficiency into their plans simply because it is cost-effective to do so.

Additionally, the Clean Power Plan allows for states to combine their state goals and achieve collective targets through emissions trading, or setting a price on carbon. This is quite new as existing carbon trading scheme involve polluters trading with each other, but under the Clean Power Plan states could trade with states.

States have until September 2016 to propose a plan or obtain an extension.