7/26/2015 draft

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**Memorandum**

**To:** Clean Power Plan Docket

**Subject:** Historical Fossil EGU Performance

**Date:** July 2015

The EPA performed an analysis of the historical per formance of fossil EGUs to inform the mass goal methodology adopted in the Clean Power Plan. Speci fically, the analysis is designed to better understand the interaction between increasing deman d levels and the generation levels of existing foss il
EGUs over time. This memorandum describes the meth odology and findings of this analysis. An accompanying spreadsheet that provides the full res ults of this analysis, also titled ‘Historical Foss il EGU Performance,’ is available in the docket.

**Methodology**

This analysis relies on data collected from units i n the Acid Rain Program 1 in the Air Markets Program Data (AMPD). 2 AMPD tracks the fuel heat input (measured in MMBt u) of fossil EGUs subject to the Acid Rain Program and how, for these units, their fuel h eat input changes over time. We first gather the se t of existing fossil units that existed for each year from 1995 to 2014. Each year will have a distinct inventory of units associated with it. For example , 1995 will have a different set of fossil units op erating than 2005 for a variety of reasons, including the a ddition of new sources and unit retirements. The distinct set of units identified in each year is he ld constant when evaluating future year performance to better reflect how affected EGUs are defined under the Clean Power Plan (i.e., new sources are unaffected). We sum, by fuel, the heat input at th e same units for up to ten years into the future. The EPA selected ten years because of the time between the BSER data year of 2012 and the start of the interim compliance period of the Clean Power Plan i n 2022.

Once we have heat input data for the base year and each of the ten future years, we combine this with an average heat rate by fuel type from the base yea r to calculate the change in generation for these units at each future year. 3 Converting from heat input to generation ensures that shifts between fuel types (e.g., from coal to gas) are not interpreted as a change in total generation. 4

**Results**

The average results for all data years are presente d below in Table 1. The change in generation colum n represents the average change in generation when a constant set of fossil EGUs advances a certain amount of years into the future. For example, the -0.3% value after one year means that a constant se t of fossil EGUs will, on average, generate 0.3% less than in the previous year. The -0.3% value is the result of 19 data points, with a high of 4.9% (chan ge from 2009 to 2010) to a low of -8.9% (change fro m

1 Relying on the Acid Rain Program provides the grea test amount of historical data.

2 http://ampd.epa.gov/ampd

3 The EPA does not collect generation data for all un its in all years of the dataset. However, complete heat input data is available for all units and all years. By u sing heat input for all units combined with a year specific fuel average heat rate for all units with heat input and generation we obtain a more complete estimate of g eneration.

4 The product of this conversion is gross, rather th an net, generation. This data is intended to refle ct the relative changes in output over time; consequently, using gr oss or net generation would not materially impact t he analysis.7/26/2015 draft

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2008 to 2009). The full results for all years are available in the ‘Historical Fossil EGU Performance ’ spreadsheet, available in the docket.

**Table 1. Average Change in Generation by Year for Constant Set of Fossil EGUs** 

Number of Years Change in Generation (%)

1

- 0.3%
2

- 1.6%
3

- 3.2%
4

- 5.0%
5

- 6.8%
6

- 9.4%
7

- 11.3%
8

- 13.2%
9

- 15.7%
10

- 18.7%

The data shows that, for a constant set of fossil E GUs, generation markedly declines over the average ten-year period even as overall demand for generati on increases. This data can be compared to the affected EGU generation associated with the mass go al methodology, in which affected EGUs are able to expand utilization in direct proportion to the amou nt of building block 3 generation that is not requi red to achieve the source category-specific emission pe rformance rates. 5 Table 2 displays national-level affected EGU generation associated with the mass go als over time, as well as the percent change in affected EGU generation from the adjusted 2012 base line.

**Table 2. Change in Affected EGU Associated with Ma ss Goal Methodology** 

Year Affected EGU Generation After

Application of Building Block 3

(MWh) Change in Generation from 2012 Adjusted Baseline (%)

2022 2,568,561,026

- 5.4%
2023 2,535,502,287

- 6.6%
2024 2,475,561,707

- 8.8%
2025 2,423,036,768

- 10.8%
2026 2,369,242,861

- 12.8%
2027 2,309,483,921

- 15.0%
2028 2,265,759,000

- 16.6%
2029 2,221,796,369

- 18.2%
2030 2,175,690,991

- 19.9%

The values above are consistent with the historical data in Table 1 and serve to validate the reasonableness of the assumption that affected EGUs will increase generation in an amount equal to the building block 3 generation not required by the goa l-setting methodology.

5 Refer to the preamble section VII for a description of the mass goal methodology.7/26/2015 draft

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