The American Wind Energy Association (AWEA) says while there are some issues to work out with the U.S. Environmental Protection Agency’s proposed Clean Power Plan, designed to reduce CO2 emissions from existing power plants, the plan is of overall benefit to the U.S. as a whole, and the wind industry in particular.
Rob Gramlich, Senior Vice President for Government and Public Affairs at the association, provided comments on the plan that were filed Feb. 6 at the Federal Energy Regulatory Commission ahead of a Feb. 19 FERC technical conference on that plan.
“Our assessment suggests that the Clean Power Plan can be met while maintaining electric reliability,” Gramlich wrote. “Existing markets and other institutions are well-equipped to reliably handle the proposed changes, and while infrastructure, planning, and grid operations improvements will be needed for most cost-effective compliance with the Clean Power Plan, they are needed with or without the rule.”
His testimony focuses on these main points:
- The Clean Power Plan is achievable, and reliability can be maintained with existing processes.
- Renewable energy will play a key role in cost-effective compliance with the Clean Power Plan.
- Renewable energy will continue to contribute to a more diverse and reliable energy portfolio.
- FERC leadership will be essential.
“The Clean Power Plan is achievable, and reliability can be maintained with existing processes,” Gramlich added. “EPA’s Clean Power Plan includes tremendous flexibility for compliance options. While EPA tailored the emissions requirement for each state based on a ‘Best System of Emission Reduction,’ states are in no way obligated to use that particular system and are free to achieve the emissions reductions any way they would like, with virtually all electric sector emissions reduction opportunities on the table. EPA has strongly indicated it plans to allow trading and other interstate compliance options, which will allow further flexibility for the rule to be met at least cost.
“EPA’s proposed rule also contains considerable flexibility for the timing of compliance options, flexibility that was expanded under proposals in EPA’s October 2014 Notice of Data Availability. Under the proposed rule, states are only required to meet a 2020-2029 average emissions rate, giving them the flexibility to emit more than the limit in the early years if they emit less than the limit in later years, or vice versa. EPA has also proposed allowing states to bank credits from actions taken to reduce emissions prior to 2020, and even proposed a ‘glide path’ approach that would phase the emissions target in more gradually during the early years of the 2020-2029 period.
“Reliability can be maintained because our country’s electricity markets and regulatory structures work. Transmission providers have many tools to ensure local and system-wide reliability as the generation mix changes. Industry participants have proven they can build capacity to meet generation reserve requirements, whether through market price signals or traditional utility planning. There is sufficient oversight by regional reliability authorities to ensure generation adequacy.”
Gramlich said EPA is even somewhat underestimating in the Clean Power Plan what wind can contribute. “Even EPA appears to have underestimated wind energy’s recent growth and cost reductions in developing its trajectory for renewable deployment under Building Block 3 of its Best System of Emissions Reduction. [T]he U.S. has essentially already reached EPA’s 2020 Building Block 3 (BB3) target for renewable deployment, with 277.4 million MWh of non-hydro renewable energy produced during the last twelve months relative to EPA’s target of 281.3 million MWh for 2020. Even under the conservative assumption that non-hydro renewable energy continues to expand at the linear growth rate it has experienced over the last 10 years, renewable generation will exceed EPA’s BB3 target by 1.1 billion MWh cumulatively over the 2020-2029 compliance timeframe. Because growth compounds as the economics of renewables continue to improve, and because the growth trajectory for 2005-2014 predates much of the cost reduction-driven growth in wind and solar generation, this linear growth projection is likely to be very conservative.”
Gramlich added: “While reliability can be preserved under the Clean Power Plan given the wide range of tools and flexibility provided, cost-effective implementation will require transmission investment. Through FERC leadership, and the leadership of states and participants such as in SPP and MISO, success in building high voltage interstate transmission has been demonstrated. This shows how to do it, not that the job is done. This recent period of activity followed many decades of neglect, so much of the transmission that has been built recently is simply backfilling long-standing reliability needs that had been deferred for too long. Many regions have made only minimal transmission investments as they do not yet have the right policies in place, and there is still no mechanism to pay for the interregional transmission lines that are most desperately needed. Moreover, only a small share of this transmission is designed to facilitate the interconnection of new generation resources or manage the generation mix change that is already underway and will be accelerated by the Clean Power Plan.”