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June 05, 2014
EPA's Clean Power Plan-Part 2

Part 2 – State-specific goals

EPA’s proposed regulations to reduce carbon dioxide (CO2) emissions from existing fossil-fuel power plants would establish state-specific goals for electric generating units (EGUs) comprising those plants.  As the proposal goes through what will certainly be a very active public comment period, there will be many questions and discussions about how the EPA arrived at those goals.  Here we summarize how the Agency did that.

Rate-based or mass-based

The goals are expressed as the rate of pounds of CO2 emitted per megawatt-hour (lb CO2/MWh).  (States have the option of translating the rate-based goals to mass-based goals as long as the translated goal achieves the same degree of emissions limitation.)  States must develop plans that demonstrate how they will meet the goals first on an interim basis by 2020 and then on a final basis by 2030.  The goals vary considerably based on each state’s fuel mix, electricity market, and “numerous other factors.”  For example, the final goals range from 215 lb CO2/MWh for Washington to 1,783 lb CO2/MWh for North Dakota.

Seven-step process
To develop the proposed rates, the EPA used a seven-step process that, in general, looks at both the amount of CO2 generated by fossil-fuel EGUs in each state and the best system of emissions reduction (BSER), which comprises four general approaches, or “building blocks,” the EPA believes states can use to bring their emissions down to the proposed goals. 

The methodology the EPA used to compute each state’s proposed goal is summarized below on a step-by-step basis.

  • Step 1—compilation of baseline data.  On a state-by-state basis, the EPA obtained total annual quantities of CO2 emissions, net generation (MWh), and capacity (MW) from reported 2012 data for all affected EGUs.  For each state, the Agency aggregated the 2012 data for all coal-fired steam EGUs as one group, all oil- and gas-fired steam EGUs as a second group, and all natural gas combined cycle (NGCC) units as a third group.  To these totals, the Agency added estimates for affected EGUs not yet in operation in 2012.  Capacity and emissions rate data inputs for the post-2012 period were estimated and also brought into the calculation.
  • Step 2—application of building block 1.  Total CO2 emissions for the coal-fired steam EGU group in each state from Step 1 were reduced by 6 percent, reflecting EPA’s assessment of the average opportunity to reduce CO2 emissions rates across the existing fleet of coal-fired steam EGUs through heat rate improvements technically achievable at a reasonable cost.
  • Step 3—application of building block 2.  If the generation data for the NGCC group in a state developed in Step 1 showed average annual utilization below    70 percent of those units’ maximum possible output, the estimated potential utilization of the NGCC group was increased to a maximum of 70 percent.
  • Step 4—application of building block 3.  This involves reducing emissions from affected EGUs in the amount that results from substituting generation at those EGUs with expanded low- or zero-carbon generation such as renewable energy.  In addition, generation from under-construction and preserved nuclear capacity is based on an estimated 90 percent average utilization rate.
  • Step 5—application of building block 4.  States would increase their demand-side energy efficiency efforts to reach 1.5 percent annual electricity savings.
  • Step 6—computation of annual rates.  The EPA computed the adjusted output-weighted-average CO2 emissions rates for each state by dividing (1) the total CO2 emissions for the coal-fired steam EGU, oil- and gas-fired steam EGU, NGCC unit, and “other” affected fossil EGU groups from Step 3 above by (2) the total of (a) the total net energy output (expressed in MWh) for the four groups from Step 1 above, plus (b) the estimated annual net generation from renewable and nuclear generating capacity from Step 4 above, plus (c) the estimated cumulative annual MWh amount saved through demand-side energy efficiency from Step 5 above.
  • Step 7—computation of interim and final goals.  The final 2030 goal for each state is the annual rate computed for 2029 for the state from Step 6. The computed 2020 to 2029 interim goal for each state is the simple average of the annual rates computed for each of the years from 2020 to 2029 for the state from Step 6.

Clearly, all states will carefully review the goals the EPA has proposed for them, and many states will present their own data, which may vary significantly from EPA’s.

The Agency says it invites such submissions.

The proposed Clean Power Plan

Part 1-Introduction

Part 3-BSER

Part 4-State plans

Part 5-Reactions

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