The Journey of Six States to Meet the Clean Power Plan: Right Direction, Just Faster
Right direction, just faster. That’s the picture painted by a recent look at what six states must do to meet federal Clean Power Plan carbon reduction requirements and keep the lights on.
The Advanced Energy Economy Institute is analyzing where the states stand now in their carbon reduction progress and what they must do to meet requirements in the Clean Power Plan proposed last year by the Environmental Protection Agency. (The EPA is expected to issue a final rule this summer.)
AEEI is using its model, the State Tool for Electricity Emissions Reduction (STEER), to detail what more is needed to meet the standard in Arkansas, Georgia, Illinois, Michigan, North Carolina, Pennsylvania and Virginia. It has completed the analysis for Michigan and is in the process of doing the same for the other states.
The open source tool considers generation, energy efficiency, storage, and grid management. AEEI also takes into account severe problems some of the states face with power outages.
The analysis indicates that the states have a strong foundation to meet the carbon reduction rules and maintain electric reliability.
Here’s a sketch of where six of the states stand, their strengths and weaknesses, and some of the suggestions offered for each by AEEI.
Now: Planned coal retirements and renewable additions put the state on track to meet 23 percent of the carbon reduction goal. The state already decreased carbon emissions six percent from 2005 to 2012.
Strengths: Second largest solar state with more than 1,900 MW. It has standards for energy efficiency and renewables and has widely installed smart meters
Weakness: Faces severe summer peak. The state experienced a cascading outage in 2011 that left 5 million people without power for almost 12 hours
Path forward: Increase behavioral efficiency programs, improve building codes, require that energy service companies (not just utilities) meet energy efficiency standards, further grow the solar and wind industries.
Now: One of the few states where carbon emissions have increased, up 39 percent from 2005 to 2012.
Strengths: The state has adopted an energy efficiency portfolio standard. Utilities have begun signing power purchase agreements for solar. Arkansas has tremendous biomass potential, enough to power 150 percent of its residential customers.
Weaknesses: Over 60 percent of power comes from plants constructed more than 30 years ago. Outages have been on the rise.
Path Forward: Expand biomass and solar, extend the energy efficiency resource standard, add more behavioral efficiency
Now: On track to achieve 69 percent of proposed carbon reduction requirement through an aggressive energy efficiency target, renewable energy additions and coal-fired plant retirements. The state reduced carbon emissions 8 percent from 2005 to 2012.
Strength: Half of the state’s power comes from zero carbon nuclear energy and five percent from wind power. Lawmakers passed a grid modernization act in 2011 that has led to investment in energy efficiency and smart grid. As a result, outage duration fell by 27 percent and outage frequency by 15 percent.
Weakness: Illinois’ outage rate remains high — the top 10 percent for the last three years. A storm-related blackout led to an attack on a prison guard at a maximum security facility.
Path forward: Extend energy efficiency resource standards to energy service companies (ESCOs) and small utilities. Push to develop more of the state’s wind and solar potential.
Now: On track to meet 81 percent of its carbon reduction requirement. The state’s carbon emissions dropped 15 percent from 2005 to 2012.
Strengths: Plans to retire 3 GW of coal-fired plants. Has an energy efficiency resource standard in planning, which could create 53 percent of needed carbon reductions by 2030. Has made $2.9 billion in wind power capital investment. Has widespread installation of advanced meters underway.
Weaknesses: In top 10 for power outages nationally. Faces electric capacity shortfall because of planned retirements of coal-fired plants
Path Forward: More wind and solar power. Add demand response to its energy efficiency portfolio standard. Adopt most recent building codes.
In a separate news release, AEEI also noted obstacles that stand in the way of Michigan meeting carbon reduction goals and called for the following policy changes to overcome them:
- Eliminate expenditure cap for energy efficiency improvements.
- Make cost-effective efficiency investments as attractive to utility investors as new generation.
- Authorize the Michigan Public Service Commission to require cost-effective energy efficiency measures – both network efficiency and customer efficiency measures – as part of any future integrated resource planning or certificate of necessity proceedings.
- Remove barriers to deployment of combined heat and power (CHP) systems, including excessive stand-by charges, interconnection roadblocks, and other disincentives for cogeneration.
- Ensure meaningful growth in renewable energy, either through continuance of current renewable portfolio standard or through incorporation of risk considerations and hedge value of fuel-less technologies as part of MPSC review of utility plans
Now: On track to exceed the carbon reduction emissions target.
Strengths: Committed to retire 800 MW of coal-fired generation and replace it with natural gas-fired power and renewables. Aggressive renewable portfolio standard, demand response program, and smart meter deployment. Regularly adopts most recent building codes.
Weaknesses: Arizona has been pursuing energy efficiency less aggressively, partly because it was included as part of the renewable portfolio standard which is phasing out.
Path Forward: Create an energy efficiency portfolio standard, cultivate more of the state’s wind and solar potential.
Now: On track to reach 23 percent of proposed carbon reduction requirement through coal-fired plant retirements, energy efficiency and renewable additions.
Strengths: The state has increased its mix of natural gas-fired generation from 5 percent in 2005 to 24 percent in 2014. The state ranks in the top five in the U.S. for natural gas reserves. Has the nation’s most successful program for harnessing private capital for efficiency upgrades of public buildings.
Weaknesses: Ranked fourth highest for power outages in 2013 and 2014.
Path Forward: Needs to invest in grid modernization to both reduce emissions and improve reliability. Can increase energy efficiency by decoupling utility rates and removing cost caps on utility programs. Expand efforts to upgrade building codes and grow its ESCO market.
What more can states do to prepare for the pending Clean Power Plan requirements? Post your thoughts below or on our growing LinkedIn Group, Energy Efficiency Markets.
