Download Emissions Reductions - American Public Power Association

Climate Change: Reporting
Guidelines under the MOU
Daniel E. Klein
Twenty-First Strategies, LLC
McLean, VA 22101
[email protected]
presented to
American Public Power Association
2006 APPA National Conference
Chicago, IL
June 13, 2006
What we’ll cover today
Background on U.S. GHG programs
Climate Vision & Power PartnersSM
Growing pressures for power
companies to take action on GHGs
Revised §1605(b) GHG Reporting
Guidelines
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Addressing Climate and Energy Security
in the Global Climate Change Initiative
 On February 14, 2002, President Bush set a goal to
reduce U.S. GHG emissions intensity by 2012
“My administration is committed to cutting
our nation’s greenhouse gas intensity
... by 18 percent over the next 10 years.”
 GHG “intensity” will be measured in terms of GHG per
unit of GDP
 This goal is equivalent to ~500 million metric tons of
cumulative carbon equivalent reductions from 2002-2012
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Improving GHG intensity is a key
component of the U.S. strategy
Over time, improving
GHG intensity could:
emissions
1. Slow the rate of

GHG growth
2. Stabilize GHG
emissions
3. Reduce absolute
emissions
… depending on the
rate of improvement
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

time
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So … how is the U.S. doing so far?
Goal: 18% reduction in GHG intensity, 2002-12
 But BAU forecasts show ~14% improvement (~1.5%/yr)
 18% implies average annual rate of ~2.0%/year
 From 1990-2003, GHG intensity fell ~1.9%/year
GHGs
$GDP
GHG
intensity
/
2003
1.0% 
2.7% 
-1.7% 

2004
~2.0%  4.2% 
-2.1% 

(prel.)
2005
(very
prel.)
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~0% 
3.5%  ~-3.5% 

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Climate VISION Program Launch
 Climate VISION – Voluntary
Innovative Sector Initiatives:
Opportunities Now
 A part of the Global Climate
Change Initiative (GCCI),
launched February 12, 2003
 Part of a continuum of shortmid-, and long-term
approaches to address
climate change
 Nature of problem requires
development and use of
transformational technologies
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Climate VISION Private-Sector Partners
Alliance of Automobile Mfgrs.
Aluminum Association
American Chemistry Council
American Forest & Paper
Association
American Iron & Steel Institute
American Petroleum Institute
Industrial Minerals
Assoc. – N. America
International Magnesium
Association
National Lime Association
National Mining
Association
Portland Cement
Association
Power Partners
Assoc. of American Railroads
The Business Roundtable
Semiconductor Industry
Association
Each partner has committed to contribute
to President’s GHG intensity goal.
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Power PartnersSM: Historical Roots
In 2002, electric power sector created Power
PartnersSM
Voluntary partnership with Federal government
Designed to deliver results in short, medium & long term
U.S. electric power sector recognized early on
as a world leader in voluntary GHG programs
Power industry came together in the 1990s
Successfully undertook voluntary climate initiatives
through the Climate Challenge program
First major industry to do so
281 MMT CO2 of reported reductions in 2002.
 But does its reputation for “early action” still hold?
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Electric Power Participants in
Climate VISION & Climate Leaders
Power PartnersSM Participants
 American Public Power Association (APPA)
 Edison Electric Institute (EEI)
 Electric Power Supply Association (EPSA)
 Large Public Power Council (LPPC)
 National Rural Electric Cooperative Association (NRECA)
 Nuclear Energy Institute (NEI)
 Tennessee Valley Authority (TVA)
EPA’s Climate Leaders program
 86 companies so far (all sectors)
 Power companies include AEP, Entergy, We Energies,
FPL, PSEG, etc.
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Power PartnersSM Goal
 Achieve equivalent of 3-5% reduction in GHG
intensity by 2012 through credible, verifiable
reductions in GHG emissions or offsets
Intensity measured as CO2/MWh
Collaborative, industry-wide initiatives
Individual actions that best suit company capabilities,
resources and business strategies
Cross-sector programs and outreach
 Signed Umbrella MOU with DOE
December 13, 2004
Highlights roles of partners in achieving voluntary
reductions
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So … how’s the Electric Power Sector
doing so far?
Goal: 3-5% reduction in GHG intensity, 2002-12
CO2
MWh
CO2
intensity
/
2003
1.25%  0.6% 
0.6% 

2004
0.89%  2.0% 
-1.0% 

~2.7%  2.0%  ~0.7% 

(prel.)
2005
(very
prel.)
So far, not so good ….
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Business-as-Usual predicts some improvement,
but EPICI target will need more
Generation
Intensity
(mmtCO
2e/bkwh)
Generation
Intensity
(MMTCO2e/bkWh)
0.6840
0.6720
0.6600
Actual
mmtCO2e/bkwh
0.6480
Model
0.6360
0.6240
0.6120
AEO 2005
0.6000
0.5880
0.5760
0.5640
0.5520
Power
PartnersSM
target
AEO 2006
19
80
19
82
19
84
19
86
19
88
19
90
19
92
19
94
19
96
19
98
20
00
20
02
20
04
20
06
20
08
20
10
20
12
20
14
20
16
20
18
20
20
20
22
20
24
20
26
20
28
20
30
0.5400
Updated Model Forecast Data from AEO 2006
Historical Data from AER 2004
Data compiled by EOP Group.
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States are getting more involved in Climate
GHG Reporting and Registries
Powerplant Carbon Caps of Offsets
Climate Action Plans Completed
Greenhouse Gas Inventories
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Source: Pew Center for Global Climate Change, July 2005 update
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U.S. Mayors Climate Protection Agreement
Initiated shortly after Kyoto Protocol took
effect
Actions urged:
 Cities should meet or exceed Kyoto targets
 State & federal governments should meet or beat
Kyoto targets by 2012
 Congress should enact cap & trade legislation
Effort has growth rapidly
 235 Mayors have signed (as of May 19, 2006)
 Representing over 45 million citizens
 Press attention worldwide
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Rapid Growth in U.S. Mayors C.P.A.
16-Feb-2005: Kyoto
Protocol takes effect
30-Mar-2005: 10 Mayors
launch program
13-Jun-2005: U.S. Conf.
of Mayors
unanimously endorse
8-Dec-2005: Mayor
Nickels (Seattle)
highlighted at Montreal
COP
19-May-2006: 235
Mayors signed,
representing over 45
million citizens
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It’s not too late to be proactive: #1
Every challenge contains
opportunity as well as danger.
=
CRISIS
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=
+
DANGER + OPPORTUNITY
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It’s not too late to be proactive: #2
In a future filled with uncertainty,
“business-as-usual” won’t cut it.
Come gather ’round people
Wherever you roam
And admit that the waters
Around you have grown
And accept it that soon
You’ll be drenched to the bone.
If your time to you
Is worth savin’
Then you better start swimmin’
Or you’ll sink like a stone
For the times they are a-changin’.
Bob Dylan, 1963
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It’s not too late to be proactive: #3
“If you’re not at the table,
you’re on the menu.”
-- Washington D.C. proverb
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Power Companies should continue and
expand their GHG reduction efforts
Understand your GHG footprint and risks
Identify GHG activities already under way
Assess options for further GHG reductions
 Costs
 Effectiveness
 Ancillary impacts
Develop capabilities for GHG reporting
Join climate programs?
 National?
 State & local?
Set a GHG target?
 Absolute level of emissions?
 GHG emissions intensity?
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GHG Management Options: An all-in-1 Formula
GHG emissions = $GDP X GHG intensity
Btu/$GDP X GHG/Btu – sequestration
Improve Energy
Efficiency
Reduce Fuel
Carbon Intensity
 Demand Side
 Supply Side
 Renewables
 Nuclear
 Fuel Switching
Sequester
Carbon
 Capture & Store
 Enhance Natural
Sinks
All options needed to:
 Maintain economic growth
 Affordably meet energy demand
 Address environmental objectives
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Use the Power PartnersSM Resource Guide
1990s Climate Challenge program developed
an “Options Workbook” of “best practices”
MOU commits to developing and maintaining
a “Power PartnersSM Resource Guide”
At a minimum …
 Meet Climate Vision commitment
 Information for utilities, esp. smaller ones
 Information for general public
… and maybe also …
 Data collection for measuring intensity?
SM
 Aid in annual Power Partners reporting to DOE?
 Other purposes?
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http://uspowerpartners.org/
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DOE’s Revised Guidelines for Voluntary
Reporting of Greenhouse Gases (§1605(b)
Background – How we got here
Overview of Guidelines
Key steps in Reporting
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Background on Revising the §1605(b)
GHG Reporting Guidelines
Voluntary Reporting of Greenhouse Gases
Program
 Established by Section 1605(b) of the Energy Policy
Act of 1992
 Oct. 1994: Final Guidelines issued
 First reporting year was 1994, reported by DOE in July
1996
Reporting rules were quite flexible
 Scope of the reporting entity
 Emissions and/or reductions
 Entity-wide or project-specific
Power sector initially dominated, still majority
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Background on Revising the §1605(b)
GHG Reporting Guidelines
Concerns grew with the original program
 “Flexibility” reduced credibility
 Weak basis for future crediting
 Emergence of competing reporting standards
Administration plan to “substantially improve
the emission reduction registry”
 Part of Feb. 2002 GCCI
 “create world-class standards for measuring and
registering emission reductions”
 “transferable credits to companies that can show real
emission reductions”
 take into account emerging domestic and int’l
approaches
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Will new §1605(b) guidelines help or
hinder its purposes?
Feb. 2002:
“These improvements will enhance measurement
accuracy, reliability and verifiability, working with
and taking into account emerging domestic and
international approaches.”
Announced at a time when fragmentation of
registries seemed to threaten.
But is the WRI/WBCSD GHG Protocol
becoming the new standard?
Will §1605(b) be a uniter or a divider?
What is L/T fate of §1605(b)?
st
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Overview of new §1605(b) Guidelines
All reporting entities must:
 Define themselves and their organizational
boundaries
 Use the measurement and calculation methods
contained in the guidelines
 Maintain records and certify accuracy of reports
All reporters are encouraged to:
 Report at the highest level
 Meet the requirements for registering reductions
 Have reports independently verified
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Framework of Revised §1605(b) Program
“Reporting Only” Entities
Small Emitters
Large Emitters
Inventory of
Emissions for
Selected Activities
Entity-wide Emissions Inventory
Measure emissions at
any level/year
Calculate Net Reductions
Across U.S. Entity:
Changes in Emissions;
Changes in Carbon Stocks;
Avoided emissions
Calculate Reductions at
any level: project;
facility; pre-2002, etc.
Calculate Net
Reductions for
Reported Activities,
e.g., DSM
Same for non-U.S. operations (optional)
Potential
Offsets
Reported
Reductions
Offset Reductions (if any)
Registered Emission Reductions
All Reporters: Require Legal Basis for Entity; ‘Encourage’ Highest Level
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Overview of §1605(b) Guidelines:
Registered Reductions
 Qualifying reporters will be credited with registered
reductions
 U.S., non-U.S. and offset reductions to be calculated
separately
 Registered reductions gauge entity’s contribution to
Presidential goal of reducing U.S. emissions intensity
18% by 2012
 Registered reductions may be transferred to other
entities using private agreements [but no changes to
DOE records]
 To retain reductions from sequestration, entities must
continue to report
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Overview of Guidelines: Small Emitters
(<10,000 metric tons CO2e per year)
Small emitters that intend to register must:
 Emit less than 10,000 metric tons of CO2 equivalent
per year
 Report all emissions and reductions for at least one
activity, e.g. livestock operations or forested land
 Report annually
 Certify that activities being reported do not cause an
increase in emissions elsewhere under the entities’
control
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Overview of Guidelines: Large Emitters
(>10,000 metric tons CO2e per year)
Large emitters that intend to register must:
 Submit comprehensive, high-quality emissions
inventories
 Determine reductions based on entity-wide
assessments of changes relative to base period
 Ensure offset reductions are calculated according to
entity rules and are subject of agreement with other
entities
 Report annually
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Basic Elements of the Revised §1605(b)
Guidelines
1) Defining and naming the entity, and setting
2)
3)
4)
5)
6)
7)
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organizational boundaries
Determining Start Year, Base Period and First Reduction
Year
Entity Statements
Emissions Inventories
Emission Reductions
Other reporting requirements, including record keeping,
certification, and verification
Offsets, non-U.S. emissions, aggregators, other gases
and sources
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Key Addresses for Revised §1605(b)
All documents and guideline development
background can be found at:
 http://www.pi.energy.gov/enhancingGHGregistry/
Information on EIA implementation of program
and revised guidelines can be found at:
 http://www.eia.doe.gov/oiaf/1605/aboutcurrent.html/
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Questions?
Dan Klein
Twenty-First Strategies, LLC
6595 Terri Knoll Ct.
McLean, VA 22101
703-893-8333
[email protected]
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Appendix
Basic Elements of the
Revised §1605(b) Guidelines
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Basic Elements of the Revised §1605(b)
Guidelines
1) Defining and naming the entity, and setting
2)
3)
4)
5)
6)
7)
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organizational boundaries
Determining Start Year, Base Period and First Reduction
Year
Entity Statements
Emissions Inventories
Emission Reductions
Other reporting requirements, including record keeping,
certification, and verification
Offsets, non-U.S. emissions, aggregators, other gases
and sources
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Emissions Inventory - The Emissions
Rating System
 Reporters must “rate” their emissions measurement and
estimation methods
 The ratings are ordinal, with four levels, A, B, C & D
(valued 4, 3, 2, 1)
 An “A” rated method = best method available (e.g. direct
measurement)
 A “D” rated method = least rigorous method (e.g. estimated
activity data)
 The weighted average rating must be at least 3.0 to
register reductions (i.e., a “B” average”)
 Reporters must calculate an inventory weighted average
rating for each year
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Emissions Inventory - Measuring Emissions
When choosing measurement or estimation
methods, entities should consider:
 Rating
 Cost and feasibility of available methods
 Accuracy
 Size of the source
 Variability and performance over time, and
 Ancillary Benefits
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Emissions Inventory – Potential Sources
of Emissions and Sequestration
 Stationary source combustion
 Indirect emissions from purchased electricity, steam,
hot and chilled water
 Mobile source combustion
 Industrial process emissions
 Mining, oil, and gas production emissions
 Waste treatment and handling
 Non-fuel use of fossil fuels
 Other indirect emissions
 Forestry sources and sinks
 Agricultural sources and sinks
 Engineered sequestration
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