# Presentation: 694562

## Power Sector Views on Climate Change Legislation

***Power Sector Views on ******Climate Change Legislation***

**EIA Energy Outlook and Modeling Conference**
**Washington, D.C.**
**March 28, 2007**

## Industry Efforts To Date

**EEI keenly understands importance of climate change **
**EEI members are leaders in reducing greenhouse gases**
- 1994
- Part of “Climate Challenge” joint government / industry partnership
- Eliminated 237 million metric tons of carbon dioxide equivalent “greenhouse” gas (GHG) emissions in 2000 alone
- More than 2/3 of all reported reductions under 1605(b) program
- 2004
- Industry reduced, avoided or sequestered more than 282 million metric tons of carbon-equivalent GHG emissions
- Formed Power Partners; pledged to reduce GHG intensity 3-5% by 2012
- Currently
- Leader in Asia-Pacific Partnership on Clean Development and Climate emphasizing importance of technologies
- Involves Australia, China, India, Japan, Republic of Korea and U.S. – which together produce ~50% of world’s CO**2**
- Continuing Power PartnersSM programs

## Baseline:      Challenges Going Forward

**EIA projects energy demand will grow 40% by 2025**
**292 GigaWatts of new capacity needed by 2030**
- Coal’s share of generation mix will increase to 57%
- Assumes 12 new GW of nuclear power
- Renewables will grow but still only 8-9%, including large-scale hydro
**Must invest now in new generation, T&D to meet this demand **
**No short-term options to significantly reduce GHG emissions from power generation**

## Baseline:      Challenges Going Forward

**Need to focus on developing **_***cleaner***_** coal, nuclear and gas generation technologies, while continuing efforts on renewables, energy efficiency and demand-side management**
**Current efforts yielding results:**
- IGCC costs coming down
- Major RDD&D effort could decrease cost of generation with capture
- FutureGen (1st zero-emission coal plant) 2012 operational start
**Against this backdrop, EEI has developed a set of principles to guide member involvement in ongoing public policy debate**

## EEI Global Climate Change Principles

**EEI will continue to emphasize the importance of:**
**A reliable, stable and reasonably-priced electric supply to maintain the competitiveness of the U.S. economy**
**A fuel-diverse generation portfolio to assure system reliability, energy security and price stability**
**Public policies and initiatives to accelerate the development of viable and cost-effective energy efficiency programs and technologies, including carbon capture and storage**
**International partnerships**
**Solutions compatible with a market economy that deliver timely and reasonably priced GHG reductions**

## EEI Principles:  Primary Components

**Ensure the development and cost-effective deployment of a full suite of “climate friendly” technologies;**
**Minimize economic disruptions to customers and avoid harm to the competitiveness of U.S. industry, and**
**Ensure an economy-wide approach to carbon reductions**

## EEI Principles:  All Technology Options Critical

**Addressing climate change requires an aggressive and sustained commitment to a full set of technology options, including:**
- Intensified national commitment to energy efficiency – advanced efficiency technologies and new regulatory and business models
- Accelerated development and cost-effective deployment of demand-side management and renewable energy resources
- Advanced, clean coal technologies
- Carbon capture and storage of all types of coal-based generation
- Increased nuclear capacity and advanced nuclear designs
- Plug-in electric hybrid vehicles

## Landscape:    Administration and States

**Administration**
- Continued support for Climate VISION, emission intensity reduction goals
- Expansion and implementation of Asia-Pacific Partnership initiatives
- Softening in Administration position?
**States**
- Some moving aggressively given perception of federal inactivity
- State CO**2** regulations in place – NH, MA, OR, WA
- RGGI states finalizing implementation; 10th state (MD) to join soon
- California – GHG cap and emissions performance standards program
- 30+ state national GHG registry underway
- Carbon capture and storage continuing – IL, MT, TX, WY, *etc*.

## Landscape: 	          Congress

**House of Representatives**
- House Energy and Commerce Committee (Dingell, D-MI) hearings
- Speaker Pelosi (D-CA) formed Select Committee on climate change – goal is legislation by July 4 recess
**Senate**
- Environment and Public Works Committee Chair Boxer (D-CA) moving aggressively, with numerous hearings expected during 2007
- Multiple bills have been introduced or are being prepared:  McCain-Lieberman, Sanders, Feinstein, Kerry-Snowe, Bingaman
- Erosion of opposition to mandatory cap; desire “to do something”
- Senate vote on climate amendment likely this year
- Linkage to renewable portfolio standard; RPS legislation creates a new “baseline” for any climate vote

## Comparison of Key Bills

## CO2 Reductions...What’s Technically Feasible

*** Achieving all targets is very aggressive, but potentially feasible**

*****

## Key Technology Challenges

**Smart grids and communications infrastructures to enable end-use efficiency and demand response, distributed generation, and PHEVs **
**A grid infrastructure with the capacity and reliability to operate with up to 30% intermittent renewable generation**
**Significant expansion of nuclear energy enabled by continued safe and economic operation of existing nuclear fleet; and by a solution for managing spent fuel**
**New commercial-scale coal-based generation units operating with 90+% CO****2**** capture and storage in a variety of geologies**

**It is technically feasible to reduce U.S. electric sector CO****2**** emissions significantly, but to do so the U.S. electricity system will need **_**ALL**_** of the following components:**

##  Challenge: Technologies and Timeframes

**Clean coal technologies**** not commercially available until ****2015**
- IGCC / gasification and advanced combustion systems
- Will improve plant efficiencies and achieve some GHG reductions
- Widespread deployment not expected until then due to cost differential with conventional systems
**Carbon capture and storage (CCS)**** technologies not commercially available until ****2020-2025**
- EPRI estimates 2025 for commercial availability at today’s pace
- Possibly by 2020 with more aggressive funding and more pilot projects
- Would make coal-fired generation zero or near-zero GHG emissions
**Deployment of ****nuclear plants**** not possible until ****2015-2020 ****at earliest**
**Deployment of CCS and nuclear would buy time for developing next generation technologies (*****e.g.*****, hydrogen, advanced nuclear, *****etc.*****)**

## Challenges Are Plentiful

**Urgent need for action on environment / energy efficiency**
**Supply margins are declining and demand is increasing**
**Cost of producing electricity no longer declining**
**Significant need for infrastructure investment**
**Lead times on permitting and construction are longer**
**Diversity and aging workforce increasingly important**
**New technologies must be developed and commercialized**

## EEI Principles:  Primary Components

**Ensure the development and cost-effective deployment of a full suite of “climate friendly” technologies;**
**Minimize economic disruptions to customers and avoid harm to the competitiveness of U.S. industry, and**
**Ensure an economy-wide approach to carbon reductions**

**Eric Holdsworth**
**202-508-5103**
_**[eholdsworth@eei.org](mailto:eholdsworth@eei.org)**_