1OPPORTUNITIES TODEPLOYWTEANDREDUCEGHGS THROUGHEPA’SCLEANPOWERPLANTedMichaelsPresidentEnergyRecoveryCouncilWTERT2014October10,2014Overview•June2,2014– EPAreleasedthe“CleanPowerPlan”ProposedRuleprovidingemissionguidelinesundersection111(d)oftheCleanAirActfor carbondioxidefromfossilfuel‐firedelectricgeneratingunits.•Theemissionguidelinesarebasedonasuiteoftechnologies/strategiesthatEPAhasdesignatedasBestSystemofEmissionReduction(BSER)forexistingfossilfuel‐firedelectricgeneratingunits.•ThroughtheapplicationofBSER,EPAhasproposedstate‐specificgoalsthatreflectEPA’scalculationoftheemissionlimitationthateachstatecanachieve, takingintoaccountcostsandanynon‐airqualityhealthandenvironmentalimpacts.23OVERVIEWOFSTATEGOALCOMPUTATIONUSINGBUILDINGBLOCKSBuildingBlocksInformingStateGoals‐OverviewEPAcreatedfourcategoriesofemissionreductionmeasures(buildingblocks)usedtodeterminestateemissionrategoals.Stateswillhavetheflexibilitytomeetthestandardsusinganycombinationofbuildingblocks.4BuildingBlock#1HeatRateImprovementatCoalPlantsBuildingBlock#2Redispatch toExistingNaturalGasCombinedCycle(NGCC)PlantsBuildingBlock#3ExistingandNewRenewablesandNewandAt‐RiskNuclearBuildingBlock#4End‐useEnergyEfficiency(EE)StartingPoint:Unadjusted2012statefossilemissionrateforcoveredsourcesFinishingPoint:InterimandFinalStateEmissionRateGoalsBSERBuildingBlock#1– HeatRateImprovement5EPAassumesthata6%heatrateimprovementatcoalfacilitiesisachievableandwilldirectlytranslatetoa6%reductionofCO2emissions.BuildingBlock#1willhaveagreaterimpactonoverallreductionsinstateswithaheavierrelianceoncoalplants.Data source: EPA Goal Computation Technical Support Document, Appendix 5 table. Levels based onreductions from 2012 rates based on fossil, and compliance eligible renewables and nuclear.Note: Vermont is omitted since it does not have any fossil fuel-fired EGUs subjectto regulation by 111(d).BSERBuildingBlock#2– Redispatch toNGCC6Buildingblock#2assumesthateachstate’sexistingandunderconstructionNGCCfleetwilloperateataminimum70%capacity.AllgenerationincreasedatanNGCCplantisassociatedwithanequalreductioninpowergeneratedbycoal/oil/gas,therebyachievinglesscarbonintensity.Data source: EPA Goal Computation Technical Support Document, Appendix 5 table. Levels basedon reductions from 2012 rates based on fossil, andcompliance eligible renewables and nuclear.Note: Vermont is omitted since it does not have any fossil fuel-fired EGUs subject to regulation by111(d).BSERBuildingBlock#3– RenewableEnergy(RE)Zero‐emittingREgenerationisaddedtothestate’sgenerationbaseline,reducingoverallcarbonintensity.Statesaregiventheflexibilitytodefinewhatisrenewableenergy(subjecttoEPAapprovalofstatecomplianceplans).7Data source: EPA Goal Computation Technical Support Document, Appendix 5 table. Levels based onreductions from 2012 rates based on fossil, and compliance eligible renewables and nuclear.Note: Vermont is omitted since it does not have any fossil fuel-fired EGUs subjectto regulation by 111(d).BSERBuildingBlock#3– UnderConstructionandAt‐RiskNuclear8EPAhasidentifiedthatapprox.5.8%ofdomesticnuclearcapacityis“atrisk”ofbeingretiredandseekstopreservethiszero‐CO2emittingcapacity.Theexpectedgenerationforunderconstructionand“atrisk”nuclearisaddedtothestate’sgenerationbaseline,reducingoverallcarbonintensity.Underconstructionandat‐risknuclearcapacityisalsopartoftheinventorythatthestatecancounttowardscompliancewithitsstategoal.Preservingat‐riskWTEprovidesthesamebenefitaspreservingat‐risknuclear.PreservationofexistingfacilitiesavoidsimmediateincreaseinGHGemissionsthatwouldoccurifthefacilityclosed.BSERBuildingBlock#4– End‐useEnergyEfficiencyEPAdeterminesastate‐specificamountofnetgenerationthatcouldpotentiallybeavoidedthroughdemand‐sideenergyefficiencymeasures.Thisavoidedgenerationisaddedtothestate’sgenerationbaseline,reducingoverallcarbonintensity.9CalculateInterimandFinalGoalsBasedonBuildingBlocksInterimStateGoal:Averageoftheadjustedyearlyemissionratesfortheperiod2020‐2029FinalStateGoal:The2029emissionratebecomesthestategoalfor2030andeachyearthereafter10Data source: EPA Goal Computation Technical Support Document, Appendix 5 table. Levels based onreductions from 2012 rates based on fossil, and compliance eligible renewables and nuclear.Note: Vermont is omitted since it does not have any fossil fuel-fired EGUs subjectto regulation by 111(d).11ACLOSERLOOKATBUILDINGBLOCK#3BSERBuildingBlock#312EPAassumesthateachstatecancost‐effectivelyincreaserenewablegenerationtolevelsconsistentwiththegoalsofleadingstatesinthesameregion.EPAassumeseachstatewillgrowrenewableenergygenerationovertimetowardsthattarget,startingatthestate’scurrentlevelofrenewableenergy.ThegoalofBuildingBlock#3istoincreasegenerationfromthepowersectorfromzero‐andlow‐emittingsources,therebyreducingtheaveragecarbonintensityoftheentirepowersector.RenewableEnergyRegionsTheUnitedStatesisdividedintoregions.WTEisrepresentedineachregion(excl.AK).13Source:Figure4.3inEPA’sGHGAbatementMeasuresTechnicalSupportDocument,June2014.WTEfacilitylocationsobtainedfromthe2014ERCDirectoryofWaste‐to‐EnergyFacilities.RegionalRenewableEnergyGenerationTargetsArenewableenergygenerationtargetiscalculatedforeachregion,baseduponaveragingall2020RPSrequirementsinthatregion.TheNortheasthasthelargestregionalgenerationtarget,andishometo28WTEfacilities.14Region RegionalREGeneration TargetsAlaska 10%EastCentral(19WTEfacilities)16%Hawaii(1WTE facility)10%NorthCentral(16 WTEfacilities)15%Northeast(28WTEfacilities)25%SouthCentral(1WTE facility)20%Southeast(13WTEfacilities)10%West(6WTEfacilities)21%Source:Table4.4inEPA’sGHGAbatementMeasuresTechnicalSupportDocument,June2014.RegionalRenewableEnergyGrowthFactorsAnannualgrowthfactoriscalculatedthatwouldallowtheregionasawholetoreachtheregionalREtargetin2029assumingthat2012REgenerationlevelswouldincreaseattheprescribedgrowthfactorstartingin2017.TheEastCentralRegionmustgrowthefastesttoreachitstargetsandthatregionishometo19WTEfacilities.15Region RE GrowthFactorAlaska 11%EastCentral(19WTEfacilities)17%Hawaii(1WTE facility)8%NorthCentral(16 WTEfacilities)6%Northeast(28WTEfacilities)13%SouthCentral(1WTE facility)8%Southeast(13WTEfacilities)13%West(6WTEfacilities)6%Source:Table4.5inEPA’sGHGAbatementMeasuresTechnicalSupportDocument,June2014.AnticipatedRenewableEnergyGrowthTheannualgrowthfactorforagivenregionisappliedtoindividualstates’2012REgenerationstartingin2017andcarryingforwardto2029,nottoexceedamaximumREgenerationlevelequivalenttotheregionalREtarget.AnnualREgenerationlevelsforeachstateareusedtocalculateinterimandfinalREtargetsforthatstate.16Year Existing andIncrementalREGeneration(MWh)2012 898,1522017 1,053,1652018 1,234,9322019 1,448,0712020 1,697,9952021 1,991,0532022 2,334,6912023 2,737,6382024 3,210,1292025 3,764,1692026 4,413,8302027 5,175,6172028 5,982,0692029 5,982,069Example:Maryland,17%GrowthSource:State2012GenerationFiguresdrawnfromTable4.1inEPA’sGHGAbatementMeasuresTechnicalSupportDocument,June2014.AnnualgrowthdrawnfromEPAGoalComputationTechnicalSupportDocument,Appendix1&2spreadsheet,June2014.ComplianceFlexibility•WhileEPA’sproposedapproachisderivedfromRPSdata,statesmayalsoconsiderabroadvarietyofotherREpoliciestoincreasegeneration.ThereisNOrequirementforstatestoadoptanRPS.•Optionsincludeperformance‐basedincentives,financialassistanceprograms,regulatorychangestofacilitatethedevelopmentofrenewablesourcesandtheirinterconnectiontothegridand “leadbyexample”strategies integratingREgenerationintostateproperties.•Statesmayalsoparticipateinregionalmulti‐stateplansandapproaches.1718ANALYSIS19WherewilltheAnticipatedRenewableGrowthOccur?From2012‐2029Annualgrowthinthe6‐17%rangecompoundsatanamazingrate.Theopportunitiesforrenewablegrowthincertainstatesiscompelling.StatesmustenactrobustpoliciestodrivetherenewabledeploymentthatEPAisanticipating.Treatmentofinterstatetradingwillimpactmarketvalue.Data source: State 2012 Generation Figures drawn from Table 4.1 in EPA’s GHGAbatement Measures Technical SupportDocument, June 2014. 2029 Anticipated Generation drawn from EPA’s Goal Computation Technical Support Document,Appendix 1 & 2 spreadsheet, June 2014Note: Vermont is omitted since it does not have any fossil fuel-fired EGUs subjectto regulation by 111(d).HowMuchDoesExistingWTEContributetoRenewableEnergy(RE)Levels?202012Non‐HydroREGeneration(MWh)(usingonlyWTEfromBiogenicMSW)2012NetGeneration(MWh)fromWTEfromBiogenicMSW%of2012Non‐HydroREfromWTEfromBiogenicMSW2012NetGeneration(MWh)fromWTEfromAllMSW%of2012Non‐HydroREfromWTEfromAllMSWifAllMSWisIncludedin2012Baseline*CT 666,525640,68496.1%1,256,24498.0%MA 1,843,419913,13149.5%1,790,44065.8%NJ 1,280,715546,55442.7%1,071,68859.3%MD 898,152308,60334.4%605,10150.7%FL 4,523,7981,473,26832.6%2,888,74648.6%VA 2,358,444495,84021.0%972,22934.3%PA 4,459,118871,00419.5%1,707,86332.2%NY 5,192,427947,16718.2%1,857,25230.4%HI 924,815152,87716.5%299,76528.0%MI 3,785,439192,4395.1%377,3299.5%NH 1,381,28568,1854.9%133,6979.2%2012Non‐HydroREGeneration(MWh)(usingonlyBiogenicMSW)2012NetGeneration(MWh)fromBiogenicMSW%of2012Non‐HydroREfromBiogenicMSW2012NetGeneration(MWh)fromAllMSW%of2012Non‐HydroREfromAllMSWifAllMSWisIncludedin 2012Baseline*ME 4,098,795135,8263.3%266,3276.3%MN 9,453,871282,3623.0%553,6525.7%WA 8,214,35071,5530.9%140,2981.7%OR 7,207,22943,8850.6%86,0481.2%IN 3,546,36721,1720.6%41,5131.2%WI 3,223,17818,2930.6%35,8681.1%CA 29,966,846152,7900.5%299,5871.0%UT 1,099,7244,8090.4%9,4290.9%OK 8,520,72410,4690.1%20,5270.2%IA 14,183,48413,7810.1%27,0220.2%•EPA’stechnicalsupportdocumentsusesU.S.EIAdatatodeterminetheamountofrenewableelectricitywasgeneratedinthebaselineyear.EIAonlyrecognizeselectricitygeneratedfromBiogenicMSWasaREgeneratingtechnology.ElectricityfromNon‐BiogenicMSWis“Other”.•TheGHGbenefitsofWTEwillbemaximizedonlyifEPAallowsstatestoincludegenerationfromAllMSW/WTEintheirstatecomplianceplans.ThiswillallowWTEtofullybenefitfromthepoliciesthatwillbeputintoplacetodeployGHG‐mitigatingrenewableenergytechnologies.*‐“Percentageof2012Non‐HydroRenewablesfromAllMSWifAllMSWisIncludedinthe2012Baseline”wascalculatedbydividingthenetgenerationfromallMSWbythesumof2012non‐hydrorenewable(usingonlybiogenicMSW)totalsand2012netgenerationfromnon‐biogenicMSW.WTEgenerationdataobtainedfromEnergyInformationAdministration.21POTENTIAL:HowMuchCouldWTEContributeto2029RenewableGoals?IfU.S.wastemanagementpracticesfollowedamodelfavoredinEurope(relyingonincreasedrecyclingandincreasedWTE),theU.S.couldmeetsignificantportionsofitsclimategoalsthroughdeploymentofaprogressiveandsustainablewastemanagementsystem.Source: 2029 Anticipated Generation drawn from EPA GoalComputation TechnicalSupport Document, Appendix1 & 2 spreadsheet, June 2014. Net WTE generation based on 30% of 2011 MSW levels reported by the ColumbiaUniversity 2013 MSW Report and assumes that net electric generation of 650 KWh/ton of MSW is all countedtoward the 2029 goal.Conclusions•ElectricitygeneratedfromBiogenicMSWwasincludedinEPA’stechnicalsupportdocumentsasarenewablegeneratingtechnologythatcanred,howeverstateshaveflexibilitytodeterminewhichrenewablestoincludeintheirplans.•EPAisrelyingonexistingrenewableenergyfacilities(exceptexistinghydropower)andmajorgrowthinnewrenewablestoreducethecarbonintensityofeachstate’spowersector.•Stateshavesignificantflexibilityinmeetingthestandards.EPAwillbeasdeferentialaspossibleinapprovingstateormulti‐stateplans.•Thisisnotanationalprogram;itisafederalprogramimplementedbystates.Atechnologymustbepartofeachstate’splantogaintraction.Thebenefitstoanytechnologywillbethemarketdriversputinplaceatthestatelevel.22TedMichaelsPresidentEnergyRecovery Council2200WilsonBoulevardSuite310Arlington, VA22201202‐467‐6240tmichaels@energyrecoverycouncil.orgwww.energyrecoverycouncil.org