Download Eighth National Green Power Marketing Conference Chicago

Renewable Energy as a Mechanism
for Reducing Pollution
North Carolina DENR/DAQ Mercury/CO2 Workshop
Raleigh. North Carolina
April 20, 2004
Harnessing the power of voluntary markets… to improve the environment
Alden Hathaway
Environmental Resources Trust, Inc.
Copyright Environmental Resources Trust, Inc. (ERT), 2003.
Request to reproduce all or part of this material should be made to ERT .
OVERVIEW
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Clean Air Act (CAA) Framework
CAA as Drivers for Wind
MWCOG Case Study
Chicago EcoPower® Report
Potential Market Opportunities
Necessary Policy Changes
Related Marketing Innovations
Problem Statement
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How do we get more
voluntary participation
when most municipals
and end-users are
staying on the
sidelines because of
the increased price
for Green Power?
Answer: Give them credit for pollution reduction
CLEAN AIR ACT
FRAMEWORK
 Act
drafted without renewable energy
in mind
 CAA requires regional air quality plans
(State Implementation Plans or SIPs)
 To date, EPA has never approved
renewable energy as an air pollution
control measure under a SIP
 “Window of opportunity” created - new
quantification methods, 8-hour ozone
standard, and regional haze
regulations
CAA POLICIES AS
MARKET DRIVERS
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State/local governments choose from wide range of
air pollution control measures
Emission reductions from traditional control
measures largely exhausted in dirty air areas
States and municipalities interested in air quality
benefits of renewable energy (particularly wind)
Lowering NOx emissions results in reduced ozone
transport and less regional haze
CAA POLICIES AS
MARKET DRIVERS
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State and local governments are a key market for
renewable energy, for example consider wind;
 Increasing market demand is the “linchpin” for
wind power development
 Wind plants are financed based on the future
revenue stream from wind purchases
 Municipalities and states often serve as important
“anchor” customers (e.g., City of Chicago)
MWCOG CASE STUDY
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Metropolitan Washington (MW) area (MDDC-VA) designated as “severe” ozone nonattainment area under 1-hour standard
Met. Wash. Council of Governments (COG)
submitted revised regional air quality plan
(SIP) to EPA Region III in March 2004 for 60day review
MWCOG CASE STUDY
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Case demonstrates market potential of SIP
emissions reduction credit under the CAA
Mont. Co. seeking to purchase 5% of its
energy from wind
Energy conservation planned to offset
“green power” premium
Co. issued request for proposals in late Feb.
2004
New ERT Environmental
Report
Prepared under a Grant from the
Great Lakes Protection Fund
Methodology
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Methodology Breakthrough in Chicago Report
Confidentiality agreements with utilities
provide access to previously unavailable data
to generate emissions avoidance report
Results of Chicago Report
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Analysis proves that renewable energy backs down fossil
fuel plants, coal, oil, gas rather than nuclear or hydro;
Renewable energy backs down fossil fuel plants because
of zero or near zero marginal operating costs;
Analysis utilizes actual power plant dispatch ranking data
– specific plants dispatched in order of economic cost;
Analysis compares actual power plant dispatch ranking
data and actual continuous emissions monitor data to
verify emission and operational changes;
Data based on continuous monitors are current vs. time
lag (up to two years) with other methodologies;
Data in Chicago shows 2300 lbs CO2 per MWh vs. 815
lbs per MWh “System Mix” methodology
How Chicago Methodology Can
Help Provide an Example
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Use ERT Environmental
Impact methodology to
validate NOx emission
reductions created
through renewable
energy back down of
fossil plants.
Use NC New Generation
NOx Set-Aside to provide
SIP credit to NOx
emission reductions
resulting from renewable
energy.
NECESSARY ACTION
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MOU’s between DOE and EPA Regional
Offices to support EERE
Revision of CAA regulations and policy to
place RE on level playing field;
Comments on EPA’s proposed Interstate Air
Quality Rule and planned supplemental rule
EPA issuance of improved guidance and
training for Regions, States, & local govrmt.
Development of model documentation
POTENTIAL MARKET
OPPORTUNITIES
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Regional air quality plans to meet 8-hour ozone
standard in Midwest and East
 Marketing window of opportunity in next few
years
 Wind energy as important option
 SIP plans due April 2007
Regional air quality plans to meet regional haze
regulations in West
RELATED MARKETING
INNOVATIONS
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Promote increased cost-effectiveness of
wind purchases through:
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Bundling with energy efficiency and innovative
financing approaches
Blending with landfill gas & other lower-priced
renewable energy
Chicago Leads the Way
City of Chicago to
began purchasing
over 120,000
MWh of Wind
from Mendota
Hills Wind Plant.
2 Largest Wind
Plants in Midwest
coming on line
2004?
®
Chicago Mayor Richard Daley receives a ceremonial EcoPower
Certificate from Commonwealth Edison CEO John Rowe.
Questions?
Debra Jacobson
Lecturer in Energy Law,
GWU Law School
703-356-7448
Alden Hathaway
Director Green Power
Programs
ERT, Inc.
202-785-8577
Copyright Environmental Resources Trust, Inc. (ERT), 2001.
Request to reproduce all or part of this material should be made to ERT.