Transcript Clean Energy Incentive Program - Environmental Justice Leadership

Clean Power Plan
Training Conducted for:
Environmental Justice Leadership Forum on Climate Change
and
Building Equity and Alignment Initiative
Coordinated by:
Nicky Sheats, Esq., Ph.D.
Director, Center for the Urban Environment,
John S. Watson Institute for Public Policy of
Thomas Edison State University and member of
the New Jersey Environmental Justice Alliance
Cecilia Martinez, Ph.D
Director of Research Programs, Center for
Earth, Energy and Democracy
Table of Contents
• The Clean Power Plan and the U.S. Electricity
System
• Dr. Cecilia Martinez
• Climate Change Mitigation Policy and Emissions
Reductions for Environmental Justice Communities
• Dr. Nicky Sheats
• Clean Energy Incentive Program
The Clean Power Plan and
the U.S. Electricity System
Dr. Cecilia Martinez
Director of Research Programs
Center for Earth, Energy and Democracy
U.S. Electricity System
The current U.S. electricity system is
comprised of:
• 145,000, 000 customers
• 19000 power plants
• 55,000 substations
• 476,000, HVL
• 6,000,000 distribution lines
Source: Energy Information Administration
EASTERN
Interconnection
WESTERN
Interconnection
Source: ERCOT
TEXAS
Interconnection
Source: Energy Information Administration
Which power plants are covered
by the Clean Power Plan?
• About 3000 plants
• Plants with generating capacity > 25 MW
• Plants operating in 2012
• Plants under construction prior to
January 8, 2014
• Plants beginning construction after
January 8, 2014 covered under the New
Source Performance Standard (NSPS)
Power Plants
http://public.tableau.com/profile/cmart225#!/vizhome/CLeanPowerPlanEGUbyState/Dashboard1
DISTRIBUTION
CLEAN
POWER
PLAN
GENERATION
TRANSMISSION
Federal – State –Tribal Complexity
Federal
State
EPA
Regulatory Agency (or
designee)
Federal Energy
Regulatory Commission
Energy Planning Agency
Department of Energy
Public Utilities
Commission (PUC)
Public Service
Commission (PSC)
State Law and Policy (e.g.,
Renewable Portfolio
Standards, State Climate
Policy
Tribal (3 EGUs)
Tribal Government
Tribes “OPT” to do a Plan;
if opt out the Federal
government through EPA
will implement
Tribes can produce “zero
carbon emitting”
electricity and enter into
the ERC market.
States with
Granted
SIP or Extensions
Extension SIP DUE
CPP
Released
August
2015
CEIP Projects
with approved
State plans
earn credits In
2020 and 2021
States Must
be in Full
Compliance
in 2030
State “Glide Path”
DUE
September
2016
CEIP
September
2018
2020
2021
Milestone
Report
Due
July 21st
Interim
Period 1
2022
2024
Interim
Period 2
2025
2027
Interim
Period 3
2028
2029
2030
Best System of Emission Reduction
(BSER)
Performance Standard
Building Block
Calculation
Examples
#1. Improved Efficiency at
the Power Plants
Increases the efficiency of the
power plant (needs less fuel Improve operations
to generate electricity)
#2. Shifting Generation
from “Higher Emitting”
power plants to “Lower
Emitting” Natural Gas
Power Plants
Substitute generation from
existing natural gas units
Increase generation at
natural gas units (NGCC)
#3. Shifts to “Clean
Energy”
Substitute from new zeroemitting generating
technologies
Increase generation
from solar, wind.
Best System of Reductions:
The “3 Building Blocks”
#1 Power Plant Efficiency
#2 Shift to Natural Gas
#3 Shift to zero carbon
NATIONAL
STANDARD
Fossil-fired Steam
1305 lbs/MWh
Combustion
Turbine
771 lbs/MWh
STATE PLAN DESIGN OPTIONS
Emission Standards
State Measures
• Federally Enforceable
• Rate-Based
• Mass-Based
• Measures not included as fed enforceable
standards
• Example: Renewable Portfolio Standards,
Energy Efficiency Resource Standards
• Mass-based
Single state (“Trading Ready”); Multi-State
Standards*
STANDARDS
1305 lbs/MWh
771 lbs/MWh
The same standard applies to
all plants across the country
regardless of region
State Targets (Goals)
STATE FLEET
of Power
Plants
# of Coal Plants
in the State
# of Gas Plants
in the State
STATE
GOALS
RATE-Based Goal
in CO2 lbs/MWh
WHICH EPA CONVERTED TO:
MASS-Based Goal
in Total lbs CO2
* Also referred to as Guidelines
State Plan Compliance Options
Natural Gas
Efficiency
Renewables
Nuclear
Waste to Energy
Carbon Capture and Sequestration
Trading Schemes
And ………….
Foundation of CPP is
Carbon Trading Schemes
TRADING READY
Emission Standards
• Federally Enforceable
• Rate-Based
• Mass-Based
Exchange Units
Rate Based
Emission Rate Credits
(ERCs)
Zero emissions/MWh
Mass-Based
Allowances
Clean Power Plan Summary
• The EPA calculated power plant standards based on
the Best System of Emission Reductions (BSER)
• The Building Blocks used to determine the BSER
• Efficiency Improvements at affected coal fired
plants
• Generation shift among affected plants
• Renewable generation
• Resulting Standards
• Coal: 1305
• Combustion turbine: 771
• The power plant standards were converted into State
Goals
What qualifies as an ERC?
“Zero- Carbon Emitting Electricity”
• Renewable electric generating technologies:
wind, solar, geothermal, hydro, wave, tidal
• Qualified biomass
• Waste-to-energy (biogenic portion only)
• Nuclear power
• A non affected combined heat and power unit
including waste heat power
• Demand side energy efficiency or demand side
management
• A category identified in a State plan and
approved by the EPA to generate ERCs
What CANNOT be used for an ERC?
• Measures that reduce emissions outside
the electric power sector, including GHG
offset projects representing reductions
that occur in the forestry and agriculture
sectors, transportation sector due to EV
• If biomass is an eligible source, SIP must
include why the proposed feedstocks
should qualify as an approach for
controlling COP2 levels in the
atmosphere.
CPP and EJ in the SIPs
• Meaningful community engagement
• Stakeholder processes
• “Encourage” to do EJ analysis
• Voluntary low-income CEIP
• “Encourage” monitoring
Some Challenges I
Examples of how the CPP minimizes environmental
justice considerations
Climate Change Mitigation
Policy and Emissions
Reductions for Environmental
Justice Communities
Nicky Sheats, Esq., Ph.D.
Director, Center for the Urban
Environment, John S. Watson Institute for
Public Policy of Thomas Edison State
University and member of the New Jersey
Environmental Justice Alliance
The Premise
Climate change mitigation
policy should produce
emissions reductions for
Environmental Justice
communities.
Investigations have found
that EJ communities are
disproportionately
exposed to unwanted land
uses and environmental
hazards, including air
pollution.
See Morello-Frosch et al. 2011; Ash et al. 2009; See also California EPA 2010; Bullard et al. 2007;
Mohai and Saha 2007; Houston et al. 2004; Jarrett et al. 2001; Wernette and Nieves 1992.
More Detailed Premise
EQUITY OR JUSTICE MEANS THAT:
Guaranteed emissions reductions in and
near EJ communities; preferably with
GHG co-pollutant reductions intentionally
maximized, but reductions either way.
Co-pollutant of concern: fine particulate
matter should show reductions.
Power plants that affect EJ communities
should reduce emissions.
More on Co-Pollutants
Fine Particulate Matter (PM2.5) is linked to premature
death (200,000 estimated in 2005), cardiovascular
disease, pulmonary disease, lung cancer.
Nitrogen Oxides (NOx) and sulfur dioxide (SO2) also have
some effects of their own, but are also precursors to PM
and ozone.
Ozone (O3) is linked to premature death (10,000
estimated in 2005), asthma, reduced lung function.
Hazardous Air Pollutants (HAPs) are linked to cancer;
neurological disorders; and respiratory, reproductive
and developmental disorders.
Potential Co-Pollutant and GHG
Emissions from New Natural Gas Plant*
Air Contaminant
Proposed Maximum
Potential Emissions
from NEC
PSD Applicability
Threshold
PSD Applicable
Carbon Monoxide
483.70
100
Yes
Nitrous Oxides
139.10
40
Yes
Sulfur Dioxide
19.73
40
No
Particulate Matter
67.17
25
Yes
PM 10
101.27
15
Yes
PM 2.5
97.65
N/A
N/A
Volatile Organic
Compounds
24.99
40
No
Lead
.0002
.6
No
Sulfuric Acid Mist
10.55
7
Yes
Greenhouse Gases
2,003,654
100,000
Yes
New Jersey Department of Environmental Protection (2012). Data taken from permit application in Newark, New Jersey.
Units are in TPY
Goal and Opportunities for the CPP
Drive down concentrations of fine
particulate matter and other GHG copollutants as low as possible.
Fine particulate matter has no lower
threshold for health benefits; that is
lowering emissions continues to have health
benefits
Makes climate change policy immediately
relevant to EJ communities.
Relationship between Cumulative Impact and
Socio-economic Indicators
Relationship Between Cumulative Impact & Percent Minority
• Grouped all block
groups based on
percent minority
and poverty
• Calculated
cumulative impact
score for combined
groups
• Cumulative impact
scores increase
steadily with
increased percent
poverty and
minority
Relationship Between Cumulative Impact & Percent Poverty
A Preliminary Screening Method to
Estimate Cumulative Environmental Impact
In a Presentation by the New Jersey Department of Environmental Protection to
the Environmental Justice Advisory Council (December 2, 2009), the following
indicators were used to estimate cumulative environmental impact
• NATA diesel (1999);
• NATA cancer risk;
• NJDEP benzene estimates;
• Traffic (all);
• Traffic (trucks);
• Density of major regulated sites;
• Density of known contaminated sites;
• Density of dry cleaners;
• Density of junkyards.
New Jersey Screen Indicators
• NATA diesel (1999);
• NATA cancer risk;
• NJDEP benzene estimates;
• Traffic (all);
• Traffic (trucks);
• Density of major regulated sites;
• Density of known contaminated sites;
• Density of dry cleaners;
• Density of junkyards.
Results:
The EJ Problem in the CPP
• The CPP Rule allows rate averaging and
so does not mandate reductions at any
specific facility;
• In this way it’s similar to carbon
trading;
• Both leave equity to chance.
Note: 1) CPP allows trading under either a rate based
system or mass based system; 2) Do we need more on
carbon trading or ERCs?
The Problem
Under the CPP and carbon trading three things
can happen to emissions (GHGs and copollutants) in EJ communities:
• Emissions can increase
• Emissions can stay the same
• Emissions can be reduced
Note: Let’s talk more about framing our message.
More CPP Problems
• CPP talks about working with states
to prevent disproportionate impacts
and emissions increases but doesn’t
say how.
• Does not talk a lot about obtaining
reductions for EJ communities.
A Solution
Plants located in and near EJ communities
must reduce emissions, THEREFORE
STATES MUST:
• Identify plants in EJ communities (look
at proximity analyses);
• Require those plants to reduce.
Provided EJ SCREEN in Final Rule
Demographic
• Percent “Minority”
• Percent Low Income
• Percent < High School
• Percent Linguistic
Isolation
• Percent Under Age 5
• Percent Over Age 64
Environmental Indicators
• Air (NATA)
• Air Other – Traffic
• Dust/Lead paint
• Waste/air/water
• Water
EPA EJ Screen for NJ Plants Subject to CPP
Issues Connected to
Solutions
• What is an EJ community?
(> 50%; > state average)
• Reduce by how much?
(sub-category rate; overall state rate; amount of estimated
reductions – 32%; some other fixed percentage – 10%, 25%,
33%)
• How can RE and EE threaten emissions reductions?
• Incentive Program?
What do you think?
Equity and Justice
• Equity/Justice should be part of
climate change mitigation policy.
• Equity/Justice should not left to
chance or addressed later.
• The market should not make our
equity/justice decisions.
Recommendations for
Framing the EJ Message
Focus on:
• Achieving emissions reductions for EJ
communities;
• The market should not be making our equity
decisions.
As opposed to possible emissions increases.
What do you think?
How Important are
Equity and Justice to you?
Our Challenge: Make obtaining
emissions reductions for EJ
communities as important as
obtaining GHG reductions.
Clean Energy Incentive
Program
Dr. Cecilia Martinez
Director of Research Programs
Center for Earth, Energy and Democracy
Clean Energy Incentive Program
• Reward early investment
• CEIP is optional but States must include intention in
SIP
• Main elements of the CEIP
• Project developer can approach state, state award
additional ERCs or additional allowances
• EPA will match with a matching pool of allowances or
ERCs maxed at 300 million tons
• EPA will pro rate state’s allocation based on level of
reductions required
(CEIP) Energy Efficiency
“Incentivizes” energy efficiency in low-income communities
The CEIP is considered an “early launch” program because
emission reduction credits will be earned in 2020-2021 (CPP
Compliance begins in 2022)
• Eligibility: Projects that begin construction AFTER state
submits plan. Operational in 2021 and 2022
• EPA provides “matches” in Emission Rate Credits or
Allowances (EPA will provide 2 for every 1 earned)
• EPA to 300 million tons allocation to each state based
on pro rated state targets
CEIP Renewable Energy
Part of Clean Energy Incentive Program “early launch”
• Solar and Wind Projects
• Eligibility: Projects that begin construction AFTER state
submits plan. Operational in 2021 and 2022
• EPA provides “matches” in Emission Rate Credits or
Allowances
• Up to 300 million tons allocation
“INCENTIVIZING”
Low-Income Investment
Energy Efficiency
EE in Low Income
Communities
EPA Match
For every one MWh in end-use
demand savings achieved, the
project will receive one ERC from
the state (or the equivalent number
of allowances).
EPA will provide a matching ERCs (or
the equivalent number of
allowances) for each earned.
The result is 2 credits for each MWh of avoided carbon-generated electricity
Renewable Energy
Renewable Energy credits are universal and not targeted to lowincome communities
Renewable Energy
MWh Wind or Solar
EPA Match
Wind and Solar
For every MWh generated, the
project will receive half an ERC
or Allowance from the state
EPA will provide a half ERC or
Allowance match
Wind or solar projects will receive 1 credit for 1 MWh of generation (i.e., half
early action credit from the state and half matching credit from the EPA)
Electricity consumption in Homes
Clothes Washer 1%
Freezers 2%
Dishwashers 2%
Computers 2%
Cooking 2%
Furnace Fans 3%
(quadrillion BTU)
Electronics
Source: Energy Information Administration
Low Income Population
Diverse Housing Characteristics
Source: Serj Berelson, Opower
Low Income Electricity Consumption
Source: Serj Berelson, Opower
Thank You
Contact Information for Trainers:
Dr. Nicky Sheats
Center for the Urban Environment, John S. Watson Institute
for Public Policy at Thomas Edison State University
New Jersey Environmental Justice Alliance
[email protected]
Dr. Cecilia Martinez
Center for Earth, Energy and Democracy
[email protected]