# Presentation: 925626

## Developing a Regional Energy Planning Framework for the Northeast States

- Gary Kleiman
*Northeast States for Coordinated Air Use Management*
*Northeast States Center for a Clean Air Future*
* **(NESCAUM / NESCCAF)*
- NREL Energy Analysis Forum
- November 9, 2004

## Key QuestionsProvided by NREL

- What questions and issues are raised when renewable energy and energy efficiency policies are proposed?
- What approaches have been used to address these questions/issues?
- What are the key questions that legislators, regulators, and other decision-makers struggle with most regarding renewable energy and efficiency?
- What analysis tools are available, and how could they be enhanced or improved to address needs?
- What data gaps need to be filled, and what additional information (analysis tools or studies) is needed?

## Key Questions/OutlineMorphed by NESCAUM/NESCCAF

- What are the issues facing the Northeast States that require energy/economic analysis?
- What approach have the States taken to provide answers to key regulatory/legislative questions in a comprehensive, multi-sector analysis framework?
- What additional data or development efforts are needed to realize this framework?

## Critical IssuesFrom the NESCAUM Perspective

- From the NESCAUM-NASEO Letter to EPA, March 5, 2004, an admonition that policy models:
- (1) accurately reflect the policy initiatives that are actually being designed and implemented;
- (2) use an appropriate cost and performance characterization of the technologies readily available at the state and regional level; and
- (3) use appropriate algorithms that provide a reasonable, credible, and fair economic assessment of cost-effective technology deployment; and
- (4) include some assessment of benefits as well as costs in their modeling exercises.
- NE-MARKAL is an important step forward in all 4 areas.

## Energy Issues in the Northeast

## New England Governors/Eastern Canadian Premiers Climate Action Plan

- In August 2001, NEG-ECP adopted aggressive regional targets:
- 1990 levels of GHG emissions by 2010
- 10% below 1990 by 2020
- Eventual target (set by the science on climate) 75-85% below 1990.

## New England Governors/Eastern Canadian Premiers Action Steps

- Establish Standardized Regional GHG Emissions Inventory
- Establish a Plan for Reducing GHG Emissions and Conserving Energy
- Promote Public Awareness
- Governments Lead by Example
- Reduce Public Sector GHG by 25% by 2012
- Reduce Electricity Sector GHG
- Lower CO2/MWH by 20% by 2025

## New England Governors/Eastern Canadian Premiers Action Steps

- Reduce Total Energy Demand through Conservation
- By 2025, increase energy saved by 20%
- Reduce and/or Adapt to Negative Social, Economic, and Environmental Impacts of Climate Change
- Reduce Growth in Transportation Sector GHG Emissions
- Create Regional GHG Emissions Registry and Explore Regional Trading

## Regional Greenhouse Gas Initiative (RGGI)

- 	To date, CT, DE, MA, ME, NH, NJ, NY, RI, VT have signed on as full participants.  In addition, several other jurisdictions are participating as observers (MD, PA, DC, the Eastern Canadian Provinces, and New Brunswick).
-    *Work plan has been approved by state environmental ministers.**	*

## RGGI (cont.)

- Start simple:  CO2 & power sector, then expand to other gases, sectors, offsets
- Will include:  Data gathering, expert briefings, technical analyses, cost & benefits assessment, stakeholder participation
- Other states:  May join
- Phase 1 Target:  Model rule April 2005

## Clean Air Act Requirements

- Changes to New Source Review
- States must comply with several new/revised programs:
- PM2.5 NAAQS implementation
- 1-hr Ozone NAAQS → 8-hr Ozone NAAQS
- Regional Haze Program

## Multi-Pollutant Legislation

- Several 2003 legislative packages stalled in the Senate
- Administration’s Clear Skies Act [SO2, NOX, Hg]
- Jefford’s Clean Power Act [SO2, NOX, Hg, CO2]
- Carper [SO2, NOX, Hg, CO2]

## Multi-Pollutant Regulation

- EPA has proposed the NOx/SOx Transport rule/Inter-state Air Quality Rule/Clean Air Interstate Rule (CAIR)
- 30 Eastern states subject to an eastern cap and trade program for SO2, NOx and Hg based on individual state emissions budgets.
- Under CAA this regulation would deal with inter-state transport related to 8-hr ozone and PM2.5 nonattainment

## Energy/Economic Modeling Rationale

- There is a tremendous need for sound energy & air quality planning at the state and regional level.
- These efforts must address multiple pollutants (at least SO2, NOX, Hg, CO2 and PM)
- Need to understand the economic implications of various planning options
- Multi-sector analysis desired
-  [identify inter-sector equilibrium points]

## MARKAL Approach

## What is MARKAL?

- An energy-technology-environment model
- a bottom-up representation of energy-producing, -transforming, and -consuming technologies
- A framework for exploring and evaluating alternative futures, and the role of various technology and policy options.

## What Does MARKAL Do?

- Finds a least cost set of technologies to satisfy end-use energy service demands ***AND*** policies specified by the user
- Quantifies the sources of emissions from the associated energy system.
- Quantifies the system-wide costs of energy and environmental policies

## MARKAL's four stage representation of an energy system

**MARKAL's four stage representation of an energy system**

_**Industry, **_**e.g.**
**-Process steam**
**-Motive power**
_**Services, **_**e.g.**
**-Cooling**
**-Lighting**
_**Households, **_**e.g.**
**-Space heat**
**-Refrigeration**
_**Agriculture, **_**e.g.**
**-Water supply**
_**Transport, **_**e.g.**
**-Person-km**

**Demand for **
**Energy Service**

_**Industry, **_**e.g.**
**-Steam boilers**
**-Machinery**
_**Services, **_**e.g.**
**-Air conditioners**
**-Light bulbs**
_**Households, **_**e.g.**
**-Space heaters**
**-Refrigerators**
_**Agriculture, **_**e.g.**
**-Irrigation pumps**
_**Transport, **_**e.g.**
**-Gasoline Car**
**-Fuel Cell Bus**

**End-Use**
**Technologies**

**Process**
**Technologies**

**Primary Energy **
**Supply**

_**Fuel processing**__ _
_**Plants**_** e.g.**
**-Oil refineries**
**-Hydrogen prod.**
**-Ethanol prod.**
_**Power plants**_** e.g.**
**-Conventional**
**  ****Fossil Fueled **
**-Solar**
**-Wind**
**-Nuclear**
**-CCGT**
**-Fuel Cells**
**-Combined Heat**
**    ****and Power**

_**Renewables**_** e.g. **
**-Biomass**
**-Hydro**
_**Mining**_** e.g.**
**-Crude oil**
**-Natural gas**
**-Coal**
_**Imports**_** e.g.**
**-crude oil **
**-oil products**
_**Exports**_** e.g.**
**-oil products**
**-coal**
_**Stock changes**_

**    ****(Final Energy)                         (Useful Energy)****    **

## Example MARKAL Reference Energy System with one end-use demand

- Each box     is a MARKAL technology
- Each arrow is a MARKAL energy carrier

- box

## NE-MARKAL database

| Sector | Sources | Technologies |
| --- | --- | --- |
| Transportation | NGGMVI;
FTA/MBTA | 7 light duty vehicle technologies; 8 heavy duty; 3 regional airports; rail on the way |
| Electricity | eGRID; EIA | 130 generation facilities >25 MW; 48 technologies <25 MW |
| Commercial | EIA/
CBECS | 13 heating, 14 cooling, 14 lighting technologies |
| Residential | EIA/RECS | 10 heating, 4 cooling, 4 lighting technologies |
| Industrial | EIA/MECS
BEA | 4 energy-intensive industries; 1 growing potential industry |
| Exogenous energy | NEMS | 25 types by region, sulfur content, and mine type. 8-step supply curves |
| Oil/gas supply | NEMS, USGS | 5 grades imported oil; 9 imported refined products plus natural gas. 3-step supply curves. |
| Emissions | EPA | 1999 NEI/eGRID |

## What is the rest of the comprehensive, multi-sector framework? 

## Integrated Model Framework

- Regional-Scale
- Climate Model

- Climate
- Impacts Models

- Costs,
- Benefits, Adaptations
- due to Climate

- Global Climate
- Model

## Regional Economic Models Inc.

- REMI model is “an eclectic model that links an input‐output model to an econometric model. If the econometric responses are suppressed, the model collapses to an input‐output model. The econometric specifications are derived from economic theories that are‐generally neoclassical in nature. The notion of regional equilibrium is central to the model's long‐term portrait of regional economic growth.”					-(Lynch et al., in press)

## MARKAL-REMI Linkage

- MARKAL inputs (demand for energy services) and outputs (future technology paths and associated capital turnover and investment) must be mapped to sector specific expenditures/investment in REMI
- Working on this framework now

- Jobs
- Household Income
- GSP

## Scenario assessment

- New England Governors/Eastern Canadian Premieres’ Climate Action Plan
- Multi-state/Multi-sector cap and trade programs
- Combined Heat and Power opportunities in New England

## What data or resources are needed to realize the framework? 

## NE-MARKAL Project Approach

- Provide clear understanding of MARKAL
- structure
- data requirements
- use of model
- Transparent process
- Stakeholder involvement

## Data Needs

- Need historical record of renewable capacity
- Must be able to defend our choice of characterization for renewable energy & energy efficiency opportunities
- Efficiency projections
- Cost projections
- Market penetration constraints
- Manufacturing constraints

## Determining the Cost-effective Efficiency Potential

**Determining the Cost-effective Efficiency Potential**

**A large number of studies:**
- NYSERDA study suggests a potential 30% electricity savings at $0.05/kWh or less (shown right)
- Energy Star suggests a cost-effective potential savings of 30%
- An Oak Ridge National Lab assessment suggests cost-effective building efficiency improvements could lead to perhaps a reduction of 200 million metric tons by 2025
- Among many others. . . .

**The Task will be to map credible technology characterizations into NE-MARKAL**

## New England Potential/Priority Renewable Technologies

- Hydropower
- Wind
- Biomass
- PV

## How can DOE most effectively assist this effort?

- Develop, run and interpret renewable specific models to determine the potential capacity of various technologies at what cost
- Exogenous to the NE-MARKAL framework
- Distill research/findings into generic technology characterizations/projections for use in multi-sector, integrated framework