Climate 411

Déjà vu: Pushback to U.S. Clean Power Plan Reminiscent of 2011 Mercury Rule

By Susan Tierney,  Managing Principal, Analysis Group, Inc.

This post originally appeared on World Resources Institute’s Insights blog.

Did you notice the massive blackout on April 16th, 2015?Reversed-GoldBackground

Actually, I didn’t either. That’s because the electric system didn’t falter. The fact that April 16th came and went without a reliability glitch was both nothing unusual and also a really big deal. Because history has a habit of repeating itself, it’s worth understanding why April 16th was a remarkable (and remarkably dull) milestone in electric-industry history.

The Origins of the Mercury and Air Toxics Standard (MATS)

Back in 2010, just under a third of all U.S. power-plant capacity burned coal to produce electricity. Many of those plants were emitting unhealthy levels of toxic air pollution, which forthcoming regulations from the Environmental Protection Agency (EPA) would limit. Critics of EPA’s rule doubted that manufacturers and installers could get enough pollution-control equipment into the market and on to power plants fast enough to meet the deadline under the new Mercury and Air Toxics Standard (MATS) – and that taking so much of the nation’s generating capacity off line all at once would inevitably lead to an unreliable electric system.

Before the EPA finalized its MATS rule at the end of 2011, countless groups published estimates of how many coal plants would retire due to the EPA regulations. The North American Electric Reliability Corporation (NERC) warned that “with [the mercury rules] as the primary driver, the industry faces considerable operational challenges to complete, coordinate and schedule the necessary environmental retrofits.” Others, including opponents of the rule, argued that, in the name of reliability, the rule would need to be delayed.

In December 2011, EPA issued the final MATS rule, which gave owners of affected power plants until April 16, 2015, to either bring their plants into compliance with the new requirements or cease their operations.

That date passed two weeks ago without incident. The lights didn’t dim.

Why not? First, the EPA stood by its commitment (made in November 2011 by then-Assistant EPA Administrator Gina McCarthy in testimony to the Federal Energy Regulatory Commission, the agency with responsibility for electric system reliability) that “In the 40-year history of the Clean Air Act, EPA rules have never caused the lights to go out, and the lights will not go out in the future as a result of EPA rules.”

Part of the reason for that is that the EPA is nowhere near as rigid or anti-business as many observers like to portray it. The final EPA rule gave power-plant owners the ability to request an additional year of time to comply, and allowed yet another year in unusual cases where continued operation of a plant would be needed for reliability. According to the National Association of Clean Air Agencies, as of March 2015, owners of 38 percent of the 460 coal-fired power plants affected by the MATS rule had requested additional time to comply and, of those, the EPA granted an extension to 95 percent.

Kentucky power plant. Photo by Cindy Cornett Seigle/Flickr

Second, the electric industry is already transitioning to rely less on coal, even without the MATS rule. Between 2011 and the end of 2014, 21.5 gigawatts (GW) of coal-fired power plants retired. The fact that these retirements occurred before the MATS deadline indicates that something other than EPA’s regulations is driving the least-efficient and oldest coal plants into retirement.

Coal’s ardent supporters may prefer to point the finger at EPA, but the truth is that market conditions are responsible: relatively flat electricity demand, increased supply from power plants using other domestic energy sources (natural gas, wind and solar), and price competition between natural gas and coal. Another 14.6 GW of power plants have retired or will retire in 2015. This total amount of coal-plant retirements (36.1 GW) falls at the mid-point of estimates made during the 2010-2011 period.

Third, the electric industry is dynamic. The market has responded to signals that additional electric resources are needed to replace old ones. Many projects have come forward: new power plants, upgraded transmission facilities, rooftop solar panels, energy-efficiency measures and energy-management systems. These varied responses are the norm, collectively maintaining reliability and modernizing the power system along the way.

That’s why there were no blackouts on April 16th, despite all the dire warnings.

History Repeats Itself

The reliability theme is re-emerging once again, as the states and the electric industry face the prospect of EPA finalizing its “Clean Power Plan” to control carbon pollution from the nation’s power plants. In anticipation of the final rules coming out this summer and of power plant owners having to comply with them by 2020, many observers are saying that the electric system’s reliability will be jeopardized if the EPA goes forward as planned. The latest warning came last month with a new assessment published by NERC, calling for more time to allow the industry and the states to respond to the forthcoming carbon-pollution rules.

Such warnings are common whenever there is major change in the industry, and they’re not without value: They play an important role in focusing the attention of the industry on taking the steps necessary to ensure reliable electric service.

But warnings lose their value when they are read as more than what they are. Notably, the reliability concerns currently being raised by some observers about EPA’s Clean Power Plan presume inflexible implementation, are based on worst-case scenarios, and assume that policy makers, regulators and market participants will stand on the sidelines until it is too late to act.

There is no historical basis for these assumptions. Reliability issues will be worked out by the dynamic interplay of actions by regulators, entities responsible for reliability, and market participants, all proceeding in parallel to find solutions.

EPA’s proposed carbon-pollution rule provides states and power plant owners with the means to prevent reliability problems by giving them a wide range of compliance options and plenty of operational discretion (including various market-based approaches, other means to allow emissions trading among power plants, and flexibility on deadlines to meet interim targets). And EPA Administrator McCarthy has stated repeatedly that her agency will write a final rule that reflects the importance of a reliable grid and provides the appropriate flexibility.

One of the best ways to assure electric reliability will be for states to actively avail themselves of the Clean Power Plan’s flexibility, rather than “just say no.” States that do not take advantage of this flexibility and then suggest that EPA’s regulations led to unreliable and uneconomic outcomes may be courting a self-fulfilling prophecy. The more states sit in the driver seat and figure out how to arrive at the emissions-reduction destination in a manner consistent with their goals and preferences, the more likely it is that they’ll accomplish them.

Posted in Clean Power Plan, Energy, Greenhouse Gas Emissions, Health / Comments are closed

Three Climate Leadership Openings Corporate America Can’t Afford to Miss

By Ben Ratner, Senior Manager, Corporate Partnerships Program

Too much ink has been spilled on the anti-climate furor of the Koch brothers. If we lose on climate, it won’t be because of the Koch brothers or those like them.

It will be because too many potential climate champions from the business community stood quietly on the sidelines at a time when America has attractive policy opportunities to drive down economy-endangering greenhouse gas emissions.

Corporate executives have the savvy to understand the climate change problem and opportunity. They have the incentive to tackle it through smart policy, and the clout to influence politicians and policy makers. Perhaps most importantly, they can inspire each other.

And today, they have a chance to do what they do best: lead. Corporate climate leadership has nothing to do with partisanship – it’s ultimately about business acumen.

For starters, here are three immediate opportunities smart companies won’t want to miss.

1. Clean Power Plan: Will spur new jobs and investments.

The Obama administration’s plan will cut emissions from coal plants by 30 percent by 2030. This is expected to trigger a wave of clean energy investment and job creation. It will also seize energy efficiency opportunities and take advantage of America’s abundant and economic supply of natural gas.

Every company with an energy-related greenhouse gas footprint has something to gain from a cleaner power mix. Each one of those companies therefore has a stake in theClean Power Plan.

Google and Starbucks – two large and profitable American companies by any standard – are among more than 200 businesses that have already stepped up to voice their support.

Who will follow them?

2. First-ever methane rules: Will make industry more efficient.

The U.S. Environmental Protection Agency’s upcoming methane emission rules are another opportunity for business leaders to weigh in.

The rules are part of a White House plan that seeks to reducemethane emissions – a major contributor to global warming and resource waste – by almost half in the oil and gas industry.

Globally, an estimated 3.6 billion cubic feet of natural gas leaks from the sector each year. This wasted resource would be worth about $30 billion in new revenue if sold on the energy market.

Some oil and gas companies that have already taken positive steps include Anadarko, Noble and Encana, which helped develop the nation’s first sensible methane rules in Colorado.

Engaging to support strong and sensible national standards isa good next step for companies in this space. And for others with a stake in cleaning up natural gas, such as chemical companies, and manufacturers and users of natural gas vehicles.

3. New truck standards: Can help companies cut expenses and emissions.

New clean truck standards are scheduled for release this summer. Consumer goods companies and other manufacturers stand to see significant dollar and emissionsavings as they move their goods to market.

Cummins, Wabash, Fed Ex, Con-Way, Eaton and Waste Management are among those that applauded the decision to move forward with new standards.

Putting capitalism to work

American business leadership is still the global standard and will remain so if it adds climate policy to its to-do list. While it will take time to build the bi-partisan momentum for comprehensive national climate legislation, there are immediate opportunities to move the needle.

Which companies will take the field?

Image source: Flickr/Don McCullough

This post originally appeared on our EDF Voices blog.

Posted in Clean Power Plan, Economics, Energy, Greenhouse Gas Emissions / Comments are closed

Young People Want Action on Climate Change

By Ben Schneider, Director of Communications, Defend Our Future

It is a conclusion reached time and again, in survey after survey: Young people support climate action more than any other age group.

That is a point worth reiterating given the recent findings highlighted in a poll from Harvard’s Institute of Politics. Quite simply, that poll runs counter to many other polls that we have seen on this topic. Several polls over the last year, including one conducted by the Washington Post, found that young people support climate action more than any other age group – with 80 percent support from 18-39 year olds, 71 percent from 40-64 year olds, and 55 percent from those 65 and older. A spread of 25 points between oldest and youngest sure seems like an age gap to me.

The Post wasn’t alone in their findings. Here are two other polls that reached similar conclusions.

From an October 2014 poll by Democracy Corps and NextGen Climate: “Two thirds of millennials view climate change as a serious threat that requires action now or in the years ahead, 14 points higher than non-millennials. And an overwhelming 3-to-1 ratio believe that the federal government should be doing more, not less, to address the problem.

Comparing Climate Change Attitudes of Millennials and non-Millennials[1]

NG chart

Source: Democracy Corps and NextGen Climate October 2014 poll

Or take a look at this October 2014 poll from the University of Texas at Austin. They found that 68 percent of voters under 35 said they were more likely to vote for candidates that support reducing carbon emissions and other actions that can help mitigate climate change.

Comparing Under 35 and Over 65 on Climate and Environment Views

UT chart

Polls like these, that show young people care about climate change and want to do something about it, are common. And it is easy to understand why: young people are seeing the earth warm as they come of age – 2014 was the hottest year in the modern record, according to NASA and the National Oceanic and Atmospheric Administration. And they know the consequences of climate change will become more severe in the years and decades to come.

We need to act on climate. Thankfully, young people agree.

[1] The data on Millennials are from on a survey of 1,000 respondents aged 18-34 in Colorado, Iowa, New Hampshire and Florida (250 per state). The data on non-Millennials are from a nationwide survey.

Posted in News / Read 1 Response

Better Fuel Efficiency for Heavy Duty Trucks — A Target Worth Setting

1200px-Kenworth_truck

“Kenworth truck” by Lisa M. Macias, U.S. Air Force via Wikipedia

A pair of critical analyses were just released that, together, make clear the need for a strong second generation heavy truck fuel efficiency and greenhouse gas standard.

The first piece is the U.S. Energy Information Agency’s (EIA) preliminary Annual Energy Outlook for 2015. I went right to the projection of fuel efficiency for new heavy trucks in 2020, which is 7.0 miles per gallon, and compared that to the projection for 2030, which is 7.2 miles per gallon. A three percent increase in efficiency for a decade is not too impressive.

As a result of this lack of projected progress on fuel efficiency and other factors, EIA expects that greenhouse gas emissions from heavy trucks will increase more than any other single end-use source by 2040 – an additional 120 million metric tons a year.

The other recent analysis is from The International Council on Clean Transportation. It released two papers on heavy truck fuel efficiency: one reviewed the potential of current and emerging efficiency technology; the other examined the cost effectiveness of these technologies.

Among the group’s findings are:

  • Already available tractor-trailer technologies can achieve 9 miles per gallon, deliver payback periods of less than a year, and be widely deployed in the 2020 to 2025 time frame.
  • Advanced efficiency technologies, now emerging in the marketplace, can double fuel economy to 11 to 12 miles per gallon, with payback periods of 18 months or less in the 2025 to 2030 time frame.
  • Diverse technology approaches – meaning technology packages with differing contributions from aerodynamic, engine, and other technologies – can achieve similar efficiency results.
  • Even under very conservative assumptions — fuel prices remaining as low as $3.10 per gallon diesel, higher technology costs, and a high discount rate of 10 percent — the most advanced technology packages have payback periods of only 1.4 to 2.2 years.
  • Typical first owners of tractor-trailers with efficiency technology packages up to 9 miles per gallon would see fuel savings 3 to 9 times greater than the upfront technology cost over the period of ownership.

ICCT’s findings demonstrate that we have the technology to cost-effectively cut truck fuel consumption in half compared to 2010 levels. EIA’s projections demonstrate that, without well designed performance-based standards, truck manufacturers are unlikely to deploy these highly cost-effective solutions.

There is good news in EIA’s report, too. The 7.0 miles per gallon in 2020 is up from 6.0 miles per gallon in 2012. The increase can be attributed to the first round of Heavy Truck Fuel Efficiency and Greenhouse Gas Standards set by President Obama in 2011.

We know that well-designed fuel efficiency standards work because we are seeing it in the market today. For the second generation standards that will be announced this spring, we urge the administration to incentivize the full scale deployment of the advanced technologies highlighted in the ICCT analysis.

Posted in Cars and Pollution, Economics, Greenhouse Gas Emissions / Read 1 Response

Pope Francis and climate change: Thoughts from a Catholic environmentalist

Source: Flickr/Catholic Church

It’s not often that my Catholic faith intersects with my work communicating about international climate change issues.

That’s changed now that Pope Francis is expected to release a statement of official church teaching this summer on the environment and climate change. It’s making headlines again this week, as the pope convenes a summit on climate change.

Known as an encyclical, it’s expected to reflect on Catholic teaching as it applies to the world today, and focus on the moral obligation to protect creation and humankind – especially the world’s most vulnerable people.

That Pope Francis – dubbed the “rock star pope” – will make such a statement on environmental protection is not surprising to those familiar with his and the Catholic Church’s position on the environment, the latter of which has long taught the importance of humans taking care of the Earth.

Caring for Earth part of our faith

The encyclical will formally be on “ecology,” with climate change playing a central role.

Climate touches everything, including people. Pollution that causes global warming also triggers asthma. Warmer temperatures mean crops and people’s livelihoods are jeopardized, while diseases such as West Nile and Lyme disease spread. Sea-level rise means people lose their homes.

These effects can still make climate change seem unrelated to the faith, far in the future and overwhelming. But Pope Francis is calling on us to see that it’s none of those.

Similarly, when I taught Sunday school to young children, we didn’t address the complexities of Catholic theology. We focused on Catholics’ belief that God provided humans with nature and its animals, trees and air for us to enjoy and protect.

The poor feel brunt of climate change

As an environmentalist, I’ve helped bring attention to my Environmental Defense Fund colleagues’ work with people who are feeling the impact of climate change first-hand.

In Brazil, the country with the world’s largest Catholic community, indigenous groups are already experiencing changes in the Amazon’s rainfall and river levels, fire patterns and climate systems they used to depend on for growing crops. And in India, farmers and rural women are already experiencing weather events consistent with a changing climate.

We know there are solutions to climate change. The United States and the world made important advances on climate and energy in the past year, and we believe we can stop the rise in greenhouse gas emissions and see them begin to decline in thenext five years.

Timing of pope’s document critical

The encyclical is a call to action for all of us to read the document and think more deeply about our relationship with the world. It asks us to consider what we can do – personally, in our community and parish, at the state and national level, and internationally.

The release of the encyclical comes in advance of international climate negotiations in Paris this December, where countries will seek to build an international agreement to reduce greenhouse gas emissions that cause climate change.

By staking out the Vatican’s position on climate change, the pope is telling the world that protecting the environment is not a niche issue – it’s a human, personal and moral issue.

This post originally appeared on our EDF Voices blog.

Posted in Partners for Change, Policy, Setting the Facts Straight, What Others are Saying / Comments are closed

NERC’s Report is Flawed: We Can Reduce Climate Pollution and Ensure Electric Reliability

power-poles-503935_1920If reducing climate pollution from power plants were a football game, the U.S. team would be halfway to the goal line while fans were still singing the national anthem.

That is, we have already gotten about halfway to the expected goals of the Clean Power Plan – before the rule is even final.

The Clean Power Plan is the U.S. Environmental Protection Agency’s (EPA) historic effort to place the first-ever limits on climate pollution from our country’s existing fleet of fossil fuel-fired power plants. When it’s finalized this summer, it’s expected to call for a 30 percent reduction in carbon emissions compared to 2005 levels — but U.S. power plant emissions have already fallen 15 percent compared to 2005 levels.

That’s because renewable energy, energy efficiency resources, and natural gas generation have been steadily deployed and growing for years. Even conservative estimates forecast continued growth of these resources — which makes last week’s report from the North American Electric Reliability Corporation (NERC) seem really strange.

NERC’s report about the Clean Power Plan’s impacts on electric grid reliability makes predictions that starkly contrast from the progress we’re already seeing.

How did this departure from reality happen?

It’s due in large part to severely flawed assumptions underlying NERC’s analysis, which yield unrealistic results.

Those flawed assumptions cause NERC to greatly overstate the generation mix changes required to meet the Clean Power Plan. The NERC Assessment’s assumptions regarding energy efficiency, renewable energy deployment, and retirement modeling are at odds with both recent experience and current trends.

Unrealistically Low Energy Efficiency Gains

NERC assumes that demand for electricity will grow at an average of one percent per year through 2030, even after accounting for growth in energy efficiency investments. That growth rate is more than 40 percent higher than the U.S. Energy Information Administration (EIA) predicts.

It also fails to reflect likely energy efficiency growth. An analysis by McKinsey & Company found that implementing only those efficiency measures that pay for themselves would reduce the nation’s total end-use energy consumption by 23 percent by 2020.

Arbitrary and Unrealistic Projections on Wind and Solar Expansion  

NERC predicts expansions of wind and solar power that are far below those observed in recent years.

U.S. solar capacity stood at 20.5 gigawatts at the end of 2014. The NERC Assessment predicts an addition of 13 to 20 gigawatts of solar energy between 2016 and 2030 — when solar capacity is expected to grow by 20 gigawatts over the next two years alone.

The U.S. wind industry is also expected to add 18 gigawatts of new capacity in the next two years.

NERC’s low-ball assumptions greatly limit renewable energy deployment in their study. This in turn greatly increases the burden on other compliance options, namely coal-to-gas generation shifting.

Failure to Account for Dynamic Grid Reliability Management Tools

NERC assumes that the Clean Power Plan will drive coal power plant retirements over its entire life-span. However, numerous studies — including one by the Brattle Group and three by the Analysis Group, show that total output and emissions from coal units can decrease without retiring units that are needed to operate on occasion in order to maintain electric reliability.

There are also numerous tools and processes available to grid operators to ensure reliability in light of dynamic market, technological and regulatory change, including capacity and energy markets, resource adequacy forecasting, and reliability must-run contracts.

These instruments, for example, have worked well to maintain adequate capacity during the recent wave of coal-fired power plant retirements, so much so that the electric grid has added an average of roughly 30 gigawatts of total power every year since 2000. The NERC Assessment, however, finds only 11 to12 gigawatts of total power will be added every year – a significant departure from the past 15 years of evidence.

A History of Inaccurate Assessments

This report is not the first time that NERC has issued an inaccurate assessment of threats to reliability.

NERC has assessed previous public health and environmental safeguards, each time raising reliability concerns that were not borne out in reality.

  • In 2011, NERC issued its Long-Term Reliability Assessment, which looked at the Mercury and Air Toxics Standards, the Cross State Air Pollution Rule, the Clean Water Act Cooling Water Intake Structures rule, and the Coal Combustion Residuals rule. NERC raised numerous reliability concerns about these protections, which the EPA noted at the time were flawed and exaggerated. None of NERC’s concerns have manifested during implementation of these standards.
  • In a 2011 companion study, NERC issued its Potential Impacts of Future Environmental Regulations about the Mercury and Air Toxics Standards and a number of other regulations. NERC again raised reliability concerns, none of which have occurred in practice.
  • In its 2007 Long-Term Reliability Assessment, NERC predicted several regions, including New England and New York State, would drop below target capacity margins, threatening reliability. NERC’s prediction was based on a number of factors, including proposed environmental protections. Some power generators used the report to oppose to the Regional Greenhouse Gas Initiative. NERC’s predicted reliability shortfalls did not occur, nor has the Regional Greenhouse Gas Initiative caused reliability issues – even while emissions fell almost 50 percent below the region-wide emissions cap.
  • In 2000, NERC drafted a review of EPA’s nitrogen oxide emissions standards for eastern power plants, knows as the NOx SIP Call. Yet again, NERC predicted a number of reliability concerns that did not occur after the rule was implemented.

NERC has repeatedly produced analyses indicating that public health and environmental safeguards will come at the expense of electric reliability – and these analyses have consistently been contradicted by reality. In fact, emission standards have never caused a reliability problem in the more than four decades that EPA has been administering the Clean Air Act.

NERC’s newest report is no better. It gives no solid reasons to doubt that the Clean Power Plan will be compatible with a reliable electric grid.  

For a clearer picture of the link between reliability and environmental protections, read this post by my colleague Cheryl Roberto, a former Commissioner of the Ohio Public Utilities Commission and electric system operator.

You might also like EDF’s fact sheet about the Clean Power Plan and the latest flawed NERC report.

The progress made in the past demonstrates that our nation is already approaching the goal line under the Clean Power Plan. The tremendous flexibility that the Clean Power Plan provides to states and power companies alike, together with time-tested grid management tools, provides the framework we need to reach the goal line — protecting our communities and families from dangerous carbon pollution, strengthening our economy, and providing a steady flow of cost-effective electricity.

Posted in Clean Air Act, Clean Power Plan, Energy, Policy, Setting the Facts Straight / Comments are closed