Modeling Goes On for the CPP

Although the fate of the CPP remains uncertain, groups continue to model different scenarios that assume its implementation.  In a recently released report, the Center for Climate and Energy Solutions (C2ES) compared five studies concerning CPP implementation. (Specifically, the studies are by MJ Bradley & Associates, the Energy Information Administration, the Bipartisan Policy Center, the Center for Strategic and International Studies and the Rhodium Group, and the Nicholas Institute for Environmental Policy Solutions at Duke University.)  C2ES identified several results that are consistent across all the studies, including: mass-based and rate-based plans yield similar cumulative emissions reductions; emissions are higher under a rate-mass patchwork scenario; and rate-based plans have higher total compliance costs than mass-based plans.  The studies included the extension of federal tax credits for wind and solar in the business-as-usual scenarios.

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DOE Task Force on the Future of Nuclear Power Releases Draft Report

The Secretary of Energy Advisory Board (SEAB) Task Force on the Future of Nuclear Power issued a draft report on September 16, 2016 calling for policy and market changes to support future deployment of nuclear power.  Appointed by Energy Secretary Ernest Moniz, the Task Force was charged with developing an initiative to attain significant future deployment of nuclear technologies.  The draft report finds that in order for existing and future nuclear generation to be fully cost competitive, overnight capital costs must decline, while policymakers and electricity markets must take strides to more accurately value carbon-free generation.

The Task Force reports that current overnight capital costs—the cost of building a new nuclear power plant assuming no financing costs—are estimated to be $5,000/kilowatt-electric (kWe).  If overnight capital costs were reduced to $2,000/kWe, the Task Force found that the levelized cost of electricity (LCOE) for new nuclear generation should be competitive with other non-carbon-emitting generation.  But the report finds that additional changes are needed if existing and future nuclear generation is to achieve full cost competitiveness, including that electricity markets must recognize the value of carbon-free electricity generation based on the social cost of carbon emissions avoided—either by charging generators for their carbon emissions, or compensating generators at $0.027 for each kilowatt-electric-hour (kWe-hr) of carbon-free electricity they generate.  Finally the report highlights that current wholesale electric market rules in many parts of the U.S. make valuing base load nuclear generation difficult, including the rate structure of wholesale capacity markets and preferential dispatch for renewables.

The full SEAB will consider whether to approve the draft at its quarterly meeting on Thurday, September 22, 2016.

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Annual Energy Outlook 2016 Now Available

Yesterday, the Energy Information Administration (EIA) released its Annual Energy Outlook 2016.  EIA has updated its reference case to include new legislation and regulations enacted since April 2015, as well as model changes and data updates.  In the electric power sector, updates include the incorporation of 3 GW of previously unannounced nuclear retirements, explicit representation of 8.8 GW of coal-fired units that are being converted to natural gas between 2016 and 2025, and modification of the module to include CPP representation.

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Frequently Asked Questions about the Paris Agreement

Earlier this month, the Congressional Research Service (CRS) released Climate Change: Frequently Asked Questions about the 2015 Paris Agreement.  CRS starts with a summary of and context for the Paris Agreement, noting that “Members of Congress have expressed diverse views about the [Paris Agreement] and may have questions about its content, process, and obligations.”  CRS explains that the principle mandatory provisions of the agreement for individual parties are procedural—the submission of Nationally Determined Contributions is required, but the specific contents are not dictated.  And the elements that are binding are consistent with obligations on the U.S. that the United Nations Framework Convention on Climate Change already imposes.  CRS notes that there is no established legal remedy—such as compensation for loss or damage—for parties that perceive themselves as particularly vulnerable to climate change, although this was hotly negotiated.

Over 170 governments signed the agreement on April 22, 2016—setting a new record for signatures on a United Nations treaty in a single day—and the agreement is open for signature until April 21, 2017.  CRS explains the process for the entry into force of the agreement, as well as countries’ (nonbinding) pledges to contribute to greenhouse gas (GHG) mitigation.  The U.S. has pledged to reduce U.S. GHG emissions by 26–28% by 2025 compared to 2005 levels.  CRS notes that economic and technological factors that may help meet this goal include: natural gas prices, environmental compliance costs, the retirement pattern of coal-fired power plants, restrained demand for electricity, lower costs of renewable energy and battery capacity, state and local policies, public support for renewable energy, and extension of renewable energy tax credits.

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Litigation Maps Illustrate State Involvement in Power Sector Environmental Regulation Suits

States are on both sides of the various lawsuits over EPA’s regulation of air emissions from the power sector.  To assist readers with tracking state and local government participation in active litigation, Considering the Grid has compiled maps showing the roles of states in the lawsuits.  An overview of the litigation maps is available here.

Individual maps are available for the:

CPP
Clean Power Plan
MATS
Mercury and Air
Toxics Standards
NSPS carbon
CO2 New Source Performance
Standards for
New Power Plants
Methane
New Source Performance
Standards
for
Oil and Natural Gas Sector
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