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Clean Power Plan Training Conducted for: Environmental Justice Leadership Forum on Climate Change and Building Equity and Alignment Initiative Coordinated by: Nicky Sheats, Esq., Ph.D. Director, Center for the Urban Environment, John S. Watson Institute for Public Policy of Thomas Edison State University and member of the New Jersey Environmental Justice Alliance Cecilia Martinez, Ph.D Director of Research Programs, Center for Earth, Energy and Democracy Table of Contents • The Clean Power Plan and the U.S. Electricity System • Dr. Cecilia Martinez • Climate Change Mitigation Policy and Emissions Reductions for Environmental Justice Communities • Dr. Nicky Sheats • Clean Energy Incentive Program The Clean Power Plan and the U.S. Electricity System Dr. Cecilia Martinez Director of Research Programs Center for Earth, Energy and Democracy U.S. Electricity System The current U.S. electricity system is comprised of: • 145,000, 000 customers • 19000 power plants • 55,000 substations • 476,000, HVL • 6,000,000 distribution lines Source: Energy Information Administration EASTERN Interconnection WESTERN Interconnection Source: ERCOT TEXAS Interconnection Source: Energy Information Administration Which power plants are covered by the Clean Power Plan? • About 3000 plants • Plants with generating capacity > 25 MW • Plants operating in 2012 • Plants under construction prior to January 8, 2014 • Plants beginning construction after January 8, 2014 covered under the New Source Performance Standard (NSPS) Power Plants http://public.tableau.com/profile/cmart225#!/vizhome/CLeanPowerPlanEGUbyState/Dashboard1 DISTRIBUTION CLEAN POWER PLAN GENERATION TRANSMISSION Federal – State –Tribal Complexity Federal State EPA Regulatory Agency (or designee) Federal Energy Regulatory Commission Energy Planning Agency Department of Energy Public Utilities Commission (PUC) Public Service Commission (PSC) State Law and Policy (e.g., Renewable Portfolio Standards, State Climate Policy Tribal (3 EGUs) Tribal Government Tribes “OPT” to do a Plan; if opt out the Federal government through EPA will implement Tribes can produce “zero carbon emitting” electricity and enter into the ERC market. States with Granted SIP or Extensions Extension SIP DUE CPP Released August 2015 CEIP Projects with approved State plans earn credits In 2020 and 2021 States Must be in Full Compliance in 2030 State “Glide Path” DUE September 2016 CEIP September 2018 2020 2021 Milestone Report Due July 21st Interim Period 1 2022 2024 Interim Period 2 2025 2027 Interim Period 3 2028 2029 2030 Best System of Emission Reduction (BSER) Performance Standard Building Block Calculation Examples #1. Improved Efficiency at the Power Plants Increases the efficiency of the power plant (needs less fuel Improve operations to generate electricity) #2. Shifting Generation from “Higher Emitting” power plants to “Lower Emitting” Natural Gas Power Plants Substitute generation from existing natural gas units Increase generation at natural gas units (NGCC) #3. Shifts to “Clean Energy” Substitute from new zeroemitting generating technologies Increase generation from solar, wind. Best System of Reductions: The “3 Building Blocks” #1 Power Plant Efficiency #2 Shift to Natural Gas #3 Shift to zero carbon NATIONAL STANDARD Fossil-fired Steam 1305 lbs/MWh Combustion Turbine 771 lbs/MWh STATE PLAN DESIGN OPTIONS Emission Standards State Measures • Federally Enforceable • Rate-Based • Mass-Based • Measures not included as fed enforceable standards • Example: Renewable Portfolio Standards, Energy Efficiency Resource Standards • Mass-based Single state (“Trading Ready”); Multi-State Standards* STANDARDS 1305 lbs/MWh 771 lbs/MWh The same standard applies to all plants across the country regardless of region State Targets (Goals) STATE FLEET of Power Plants # of Coal Plants in the State # of Gas Plants in the State STATE GOALS RATE-Based Goal in CO2 lbs/MWh WHICH EPA CONVERTED TO: MASS-Based Goal in Total lbs CO2 * Also referred to as Guidelines State Plan Compliance Options Natural Gas Efficiency Renewables Nuclear Waste to Energy Carbon Capture and Sequestration Trading Schemes And …………. Foundation of CPP is Carbon Trading Schemes TRADING READY Emission Standards • Federally Enforceable • Rate-Based • Mass-Based Exchange Units Rate Based Emission Rate Credits (ERCs) Zero emissions/MWh Mass-Based Allowances Clean Power Plan Summary • The EPA calculated power plant standards based on the Best System of Emission Reductions (BSER) • The Building Blocks used to determine the BSER • Efficiency Improvements at affected coal fired plants • Generation shift among affected plants • Renewable generation • Resulting Standards • Coal: 1305 • Combustion turbine: 771 • The power plant standards were converted into State Goals What qualifies as an ERC? “Zero- Carbon Emitting Electricity” • Renewable electric generating technologies: wind, solar, geothermal, hydro, wave, tidal • Qualified biomass • Waste-to-energy (biogenic portion only) • Nuclear power • A non affected combined heat and power unit including waste heat power • Demand side energy efficiency or demand side management • A category identified in a State plan and approved by the EPA to generate ERCs What CANNOT be used for an ERC? • Measures that reduce emissions outside the electric power sector, including GHG offset projects representing reductions that occur in the forestry and agriculture sectors, transportation sector due to EV • If biomass is an eligible source, SIP must include why the proposed feedstocks should qualify as an approach for controlling COP2 levels in the atmosphere. CPP and EJ in the SIPs • Meaningful community engagement • Stakeholder processes • “Encourage” to do EJ analysis • Voluntary low-income CEIP • “Encourage” monitoring Some Challenges I Examples of how the CPP minimizes environmental justice considerations Climate Change Mitigation Policy and Emissions Reductions for Environmental Justice Communities Nicky Sheats, Esq., Ph.D. Director, Center for the Urban Environment, John S. Watson Institute for Public Policy of Thomas Edison State University and member of the New Jersey Environmental Justice Alliance The Premise Climate change mitigation policy should produce emissions reductions for Environmental Justice communities. Investigations have found that EJ communities are disproportionately exposed to unwanted land uses and environmental hazards, including air pollution. See Morello-Frosch et al. 2011; Ash et al. 2009; See also California EPA 2010; Bullard et al. 2007; Mohai and Saha 2007; Houston et al. 2004; Jarrett et al. 2001; Wernette and Nieves 1992. More Detailed Premise EQUITY OR JUSTICE MEANS THAT: Guaranteed emissions reductions in and near EJ communities; preferably with GHG co-pollutant reductions intentionally maximized, but reductions either way. Co-pollutant of concern: fine particulate matter should show reductions. Power plants that affect EJ communities should reduce emissions. More on Co-Pollutants Fine Particulate Matter (PM2.5) is linked to premature death (200,000 estimated in 2005), cardiovascular disease, pulmonary disease, lung cancer. Nitrogen Oxides (NOx) and sulfur dioxide (SO2) also have some effects of their own, but are also precursors to PM and ozone. Ozone (O3) is linked to premature death (10,000 estimated in 2005), asthma, reduced lung function. Hazardous Air Pollutants (HAPs) are linked to cancer; neurological disorders; and respiratory, reproductive and developmental disorders. Potential Co-Pollutant and GHG Emissions from New Natural Gas Plant* Air Contaminant Proposed Maximum Potential Emissions from NEC PSD Applicability Threshold PSD Applicable Carbon Monoxide 483.70 100 Yes Nitrous Oxides 139.10 40 Yes Sulfur Dioxide 19.73 40 No Particulate Matter 67.17 25 Yes PM 10 101.27 15 Yes PM 2.5 97.65 N/A N/A Volatile Organic Compounds 24.99 40 No Lead .0002 .6 No Sulfuric Acid Mist 10.55 7 Yes Greenhouse Gases 2,003,654 100,000 Yes New Jersey Department of Environmental Protection (2012). Data taken from permit application in Newark, New Jersey. Units are in TPY Goal and Opportunities for the CPP Drive down concentrations of fine particulate matter and other GHG copollutants as low as possible. Fine particulate matter has no lower threshold for health benefits; that is lowering emissions continues to have health benefits Makes climate change policy immediately relevant to EJ communities. Relationship between Cumulative Impact and Socio-economic Indicators Relationship Between Cumulative Impact & Percent Minority • Grouped all block groups based on percent minority and poverty • Calculated cumulative impact score for combined groups • Cumulative impact scores increase steadily with increased percent poverty and minority Relationship Between Cumulative Impact & Percent Poverty A Preliminary Screening Method to Estimate Cumulative Environmental Impact In a Presentation by the New Jersey Department of Environmental Protection to the Environmental Justice Advisory Council (December 2, 2009), the following indicators were used to estimate cumulative environmental impact • NATA diesel (1999); • NATA cancer risk; • NJDEP benzene estimates; • Traffic (all); • Traffic (trucks); • Density of major regulated sites; • Density of known contaminated sites; • Density of dry cleaners; • Density of junkyards. New Jersey Screen Indicators • NATA diesel (1999); • NATA cancer risk; • NJDEP benzene estimates; • Traffic (all); • Traffic (trucks); • Density of major regulated sites; • Density of known contaminated sites; • Density of dry cleaners; • Density of junkyards. Results: The EJ Problem in the CPP • The CPP Rule allows rate averaging and so does not mandate reductions at any specific facility; • In this way it’s similar to carbon trading; • Both leave equity to chance. Note: 1) CPP allows trading under either a rate based system or mass based system; 2) Do we need more on carbon trading or ERCs? The Problem Under the CPP and carbon trading three things can happen to emissions (GHGs and copollutants) in EJ communities: • Emissions can increase • Emissions can stay the same • Emissions can be reduced Note: Let’s talk more about framing our message. More CPP Problems • CPP talks about working with states to prevent disproportionate impacts and emissions increases but doesn’t say how. • Does not talk a lot about obtaining reductions for EJ communities. A Solution Plants located in and near EJ communities must reduce emissions, THEREFORE STATES MUST: • Identify plants in EJ communities (look at proximity analyses); • Require those plants to reduce. Provided EJ SCREEN in Final Rule Demographic • Percent “Minority” • Percent Low Income • Percent < High School • Percent Linguistic Isolation • Percent Under Age 5 • Percent Over Age 64 Environmental Indicators • Air (NATA) • Air Other – Traffic • Dust/Lead paint • Waste/air/water • Water EPA EJ Screen for NJ Plants Subject to CPP Issues Connected to Solutions • What is an EJ community? (> 50%; > state average) • Reduce by how much? (sub-category rate; overall state rate; amount of estimated reductions – 32%; some other fixed percentage – 10%, 25%, 33%) • How can RE and EE threaten emissions reductions? • Incentive Program? What do you think? Equity and Justice • Equity/Justice should be part of climate change mitigation policy. • Equity/Justice should not left to chance or addressed later. • The market should not make our equity/justice decisions. Recommendations for Framing the EJ Message Focus on: • Achieving emissions reductions for EJ communities; • The market should not be making our equity decisions. As opposed to possible emissions increases. What do you think? How Important are Equity and Justice to you? Our Challenge: Make obtaining emissions reductions for EJ communities as important as obtaining GHG reductions. Clean Energy Incentive Program Dr. Cecilia Martinez Director of Research Programs Center for Earth, Energy and Democracy Clean Energy Incentive Program • Reward early investment • CEIP is optional but States must include intention in SIP • Main elements of the CEIP • Project developer can approach state, state award additional ERCs or additional allowances • EPA will match with a matching pool of allowances or ERCs maxed at 300 million tons • EPA will pro rate state’s allocation based on level of reductions required (CEIP) Energy Efficiency “Incentivizes” energy efficiency in low-income communities The CEIP is considered an “early launch” program because emission reduction credits will be earned in 2020-2021 (CPP Compliance begins in 2022) • Eligibility: Projects that begin construction AFTER state submits plan. Operational in 2021 and 2022 • EPA provides “matches” in Emission Rate Credits or Allowances (EPA will provide 2 for every 1 earned) • EPA to 300 million tons allocation to each state based on pro rated state targets CEIP Renewable Energy Part of Clean Energy Incentive Program “early launch” • Solar and Wind Projects • Eligibility: Projects that begin construction AFTER state submits plan. Operational in 2021 and 2022 • EPA provides “matches” in Emission Rate Credits or Allowances • Up to 300 million tons allocation “INCENTIVIZING” Low-Income Investment Energy Efficiency EE in Low Income Communities EPA Match For every one MWh in end-use demand savings achieved, the project will receive one ERC from the state (or the equivalent number of allowances). EPA will provide a matching ERCs (or the equivalent number of allowances) for each earned. The result is 2 credits for each MWh of avoided carbon-generated electricity Renewable Energy Renewable Energy credits are universal and not targeted to lowincome communities Renewable Energy MWh Wind or Solar EPA Match Wind and Solar For every MWh generated, the project will receive half an ERC or Allowance from the state EPA will provide a half ERC or Allowance match Wind or solar projects will receive 1 credit for 1 MWh of generation (i.e., half early action credit from the state and half matching credit from the EPA) Electricity consumption in Homes Clothes Washer 1% Freezers 2% Dishwashers 2% Computers 2% Cooking 2% Furnace Fans 3% (quadrillion BTU) Electronics Source: Energy Information Administration Low Income Population Diverse Housing Characteristics Source: Serj Berelson, Opower Low Income Electricity Consumption Source: Serj Berelson, Opower Thank You Contact Information for Trainers: Dr. Nicky Sheats Center for the Urban Environment, John S. Watson Institute for Public Policy at Thomas Edison State University New Jersey Environmental Justice Alliance [email protected] Dr. Cecilia Martinez Center for Earth, Energy and Democracy [email protected]