Boston-based M.J. Bradley & Associates has issued a report that concludes the Environmental Protection Agency (EPA) Clean Power Plan (CPP) can significantly reduce CO2 emissions by 2030, without entirely killing off domestic coal-fired generation.
While coal-fired generation is likely to decrease around 21% by 2030, it could still provide up to 28% of the nation’s electricity, according to M.J. Bradley & Associates.
The Jan. 13 report looks at 16 potential outcomes, including business-as-usual scenarios and 14 alternative CPP regulatory scenarios. For example, several of the cases assume that states adopt EPA’s mass-based emissions goals. The cases also assume varying levels of demand-side energy efficiency.
Relative to the reference case, coal generation declines, on average, by 21% in 2030 (averaging across all of the scenarios), but continues to supply between 23% and 28% of electricity, across all of the cases evaluated.
Natural gas is projected to supply between 25% and 32% of electricity in 2030, across all of the cases evaluated. Renewable energy is projected to supply between 11% and 15% of electricity in 2030, across all of the cases evaluated.
The rest of the 2030 generation mix would be spread among nuclear, hydro, energy efficiency and “other” sources. As a resource, energy efficiency is expected to account for anywhere from 5% to 13% of the mix in 2030, according to the firm’s findings.
The report also projects that natural gas prices should stay below $7/mmBtu under all scenarios in 2030.
Here are some of the other findings:
•Across a wide range of scenarios and assumptions, the results show that CPP targets are very achievable.
•The ability for power producers to trade leads to significant cost savings and flexibility for power producers.
•Increasing investment in energy efficiency programs reduces overall compliance costs because plants purchase less fuel and fewer new plants need to be built.
•States can meet the Clean Power Plan’s emissions goals while relying on a diverse mix of supply-and demand-side resources, including energy efficiency, renewables, nuclear, natural gas and coal.
•EPA requires that mass-based state plans address the potential for “emissions leakage.” Leakage results from the incentives under a mass-based plan to shift generation and emissions to new fossil-fired power plants outside the program. “Our analysis shows that CO2 emissions would increase with an ‘existing only’ mass-based program versus an ‘existing plus new,’ source program.” The most straightforward approach to address this issue is to adopt the “existing plus new” source mass limits, which is an option available to the states under the CPP.
•There are additional sensitivity runs that were not evaluated as part of this study, which the firm hopes to continue evaluating over the coming months, including: potential retirement of existing nuclear units; low gas prices; California’s participation in trading systems with other states; additional “patchwork” policy and trading scenarios.
•This analysis was designed prior to Congressional approval of the phase-down of the Production Tax Credit (PTC) for wind energy and the extension of the Investment Tax Credit (ITC) for solar energy. We will plan to include these tax extensions in future model runs.
The Bradley firm said that it made some modifications to EPA’s assumptions. For example, an additional 5.6 GW of fossil retirements were added based on public announcements.
M.J. Bradley & Associates LLC (MJB&A) provides strategic and technical advisory services to address critical energy and environmental matters including: energy policy, regulatory compliance, emission markets, energy efficiency, renewable energy, and advanced technologies, the firm said on its website.
Prior to founding the firm, Michael J. Bradley was executive director of Northeast States for Coordinated Air Use Management (NESCAUM) for 12 years. He has also worked for state environmental agencies and for the British Department of the Environment.