Clean Power Plan Across State Lines - Understanding Regional Opportunities and Challenges

摘要

For the Clean Power Plan (CPP) compliance, state regulators and planners must carefully consider alternatives that reduce emissions, are cost-effective for consumers, and ensures the reliability of the electric grid while maintaining the employment and economic support produced by state operations. As our electricity grids cross state lines, states must work closely with other states, the federal government, and regional transmission organizations (RTOs) to minimize energy market disruptions, preserve electric supply reliability, and maintain fuel diversity to avoid over-dependence on any single generation source. All while reducing the carbon intensity of power generation. This paper analyzes CPP scenario alternatives available for states developing individual plans but needing to coordinate across regions in order to develop cost-effective compliance pathways for power generators. The least-cost compliance approach for many net energy exporting states, or states with higher emitting generation is one that is mass-based, and covers only existing affected fossil-fueled units. Existing assets, even with reduced capacity factors, remain important to many states' generation mixes, providing fuel diversity, reliability, and economic hedge in an uncertain energy future. Long-term investments in emissions reductions, environmental compliance, reliability, and jobs must be included in the discussion when defining CPP compliance, as premature retirement of existing assets can present an unexpected risk to future grid reliability. In contrast, a rate-based compliance scenario, would likely need to include specific increments of new, lower emitting capacity - a variable which can difficult for any state to enforce or dictate, though could simplify compliance obligations if implemented correctly. An analysis of both rate-based and mass-based approaches for various states show there are potential attainable compliance paths for each. It is important for states and power generators to understand impacts and opportunities available when neighboring states develop non-complementary plans and to capitalize on opportunities when coordination is possible, maximizing regulatory and economic opportunities for compliance. Next steps include developing the scenarios for all 49 states looking to comply with CPP or other Carbon intensity regulations in the coming decade. While the results presented are for two specific states, the ranges and clear understanding of assumptions can help power generators consider impacts and opportunities moving into the future with the CPP.