Transcript Slide 1

Status Report: Summit Platform &
GHG Accord Implementation
MGA Governors Energy Steering Committee
July 21, 2008
Overview
• Process Overview
• MGA Platform Advisory Groups’ Scope of Work
• Status Report Update by Advisory Group
– EE
– Bioeconomy and Transportation
– RE, Advanced Coal, and CO2 Capture
• Resolutions Implementation:C02 Management Infrastructure,
Transmission Adequacy and Low-Carbon Corridors
– Greenhouse Gas Accord and Subgroups
• Overview of Modeling in MGA Process
• Low Carbon Fuel Standard Policy Development
Governors Energy
Summits 2007 & 2009
Policy
Recommendations,
Cooperative Regional
Initiatives & Other
Outcomes
MGA Steering Committee of
Governors and Premiers’ Staff
Four Stakeholder Advisory Groups
1. Energy Efficiency
2. Bioeconomy & Transportation
3. Renewable Elec., Adv. Coal & CO2 Capture
4. Greenhouse Gas Accord
State & Regional
Implementation 2008-2009
Scope of Work for Platform Advisory Groups:
EE, Bio, & RE/Advanced Coal
Quantifiable Policy Measures
• Identify, characterize, model, prioritize and recommend quantifiable policy
measures to governors/premier’s staff to achieve MGA goals.
• Recommend quantifiable policy measures to MGA Greenhouse Gas
Accord advisory group to complement cap-and-trade in achieving broader
regional emissions reductions targets and to reduce the cost of the cap
and trade program itself.
Other Initiatives
• Identify, develop and, where appropriate, begin implementing critical
initiatives to enable and/or reinforce quantifiable policy measures in
achieving governors/premiers’ goals (e.g., technical assessments, publicprivate partnerships, collaborative projects, etc.).
Scope of Work (cont.)
Regional Scenario Model Development
• Provide input into design of a systems dynamics model to run
regional scenarios of multiple combinations of energy
efficiency, bioenergy, renewable electricity and advanced
coal/CCS themes.
MGA Energy Security & Climate Stewardship Roadmap
• Develop regional roadmap outlining modeling results,
recommended policies and initiatives, implementation results
to date and next steps (will be primary documentary
centerpiece for next Summit in Sept. 2009)
MGA Platform and GHG
Cap-and-Trade Modeling
Cooperative Resolutions Assigned to RE,
Advanced Coal & CCS Advisory Group
1. CO2 Management Infrastructure Partnership
2. Transmission Adequacy Initiative
3. Low-Carbon Energy Transmission Infrastructure
•
Establishment of resolution subcommittees
– At least one in-person meeting of each, with breakout
sessions at full Advisory Group meetings
– Work integrated with larger Advisory Group, but
decision-making distinct
Energy Efficiency Advisory Group
• Organized into 4 subgroups:
– Energy efficiency potential studies
– Utility-related policies
– Building codes, appliances standards & governments leading by
example
– Best practices
• Fleshing out policy options to be analyzed and quantified by
Center for Climate Strategies (complete set to be vetted at July
23-25 meeting in Kansas City)
• CCS’ work with EE Advisory Group has advanced furthest:
quantitative analysis to be complete in Sep-Oct.
• In October, Forio’s systems dynamics model will enable
Advisory Group to determine policy combinations capable of
achieving MGA’s goal of 2 percent by 2015.
Energy Efficiency cont’d.
• In October Advisory Group will draw on modeling
results to make recommendations to Cap & Trade
Advisory Group and MGA Steering Committee
• Also identifying complementary non-policy initiatives
(e.g., EE potential whitepaper development to be
funded by Energy Foundation)
Bioeconomy & Transportation
Advisory Group
• Second in-person meeting on July 21 in Chicago
• CCS policy measure characterization process at earlier
stage than EE Advisory Group
• Liquid fuels/transportation GHG reduction policies (to
complement cap-and-trade) becoming important
focus for Advisory Group
– E.g. Low Carbon Fuel Standard: North Central Bioeconomy
Consortium, Pew Center on Global Climate Change working
with BTAG and GHG Advisory Group participants (4
webinars on different aspects of LCFS and in-person
meeting in Des Moines)
– Policies to reduce vehicle miles traveled (to be identified
and characterized)
Renewable Electricity, Advanced Coal
and Carbon Capture
• First meeting held in May in Indianapolis; second meeting on
July 30 in Dearborn
• Initial identification and characterization by CCS staff of
quantifiable policy measures for RE and CO2 capture and
storage
– Subgroup conference calls underway to further policy characterization
and preliminary analysis: Renewable electricity and CO2 capture and
storage
• Aiming for full set of measures by July meeting for analysis
and prioritization by fall
• GPI staff interviewing commercial advanced coal/CCS project
developers underway to refine and prioritize of specific policy
measures
Transmission Adequacy Resolution:
Preliminary Strategy
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First meeting of subgroup in June in DC
Proposed eventual package recommendation to
governors and premier addressing three resolution
deliverables:
1. Evaluation of new generation and transmission needed to
accommodate that new generation;
2. Regional transmission plan focused on required highvoltage interstate network additions to accomplish that
transmission; and
3. Proposed cost recovery mechanism/ownership structure
to facilitate financing it.
Transmission Adequacy: Emerging Approach
• Deliverable 1: Evaluation of transmission needs
– Expand current MISO survey of load-serving entities to all MGA states,
regardless of regional transmission organization (RTO) membership
• Status: Survey instrument ready and draft letter from governors/MGA
proposed to encourage LSE participation
– Use survey data to expand the scope of Midwest Transmission
Expansion Plan (MTEP 09 to include the MGA footprint. MTEP 09 is
national, and the MGA portion will be a regional look.)
• Deliverable 2: Resolve transmission queue congestion for
renewables projects
– Status: Subgroup finalized draft comment letter to U.S. FERC for
governors and premier’s consideration
Transmission Adequacy cont.
• Deliverable 3: Transmission cost allocation and recovery
– Develop model legislation to expand regulatory commission
authorities, where needed, to consider public benefit in regional
context
• Status: survey of state/provincial regulatory commissions re statutory
authorities about to begin
– Pursue cost allocation/recovery agreement at subregional level first
(up to 345 kV), with later expansion to agreement between subregions
over cost allocation for needed high-voltage transmission between
them (765 kV)
• Status: staff assessment with MISO and participants of transmission
studies underway that will be most useful in defining costs and issues to
be resolved
CO2 Management Resolution: Emerging
Approach
• Deliverable 1: report on costs and benefits of CO2 enhanced oil recovery
– Prepare MGA report to governors and premier that builds on existing Midwest
reservoir screening and on accounting for net GHG emissions
– Status: Staff to begin drafting report drawing on NETL-funded ARI report that
has been peer reviewed by subcommittee as foundation for analysis of MGA
footprint and recommendations from subcommittee
• Deliverable 2: expand geologic assessment of reservoirs, especially in MN,
WI and IA, and large-scale non-EOR CO2 storage tests
– Federal appropriations letter to be drafted for governors and premiers
consideration (staff and participants to craft letter)
• Deliverable 3: inventory jurisdictions on existing statutes and regulations
re CO2 management
– Status: Inventory template completed and jurisdictional survey recipients
identified and inventory to be sent to jurisdictional leads
CO2 Management Resolution cont.
• Deliverable 4: Development of uniform model jurisdictional statutory and
regulatory framework
– Prepare draft comments on pending U.S. EPA draft underground injection rule
for governors and premier’s consideration
– Commitment to develop model statutory and regulatory template or toolkit:
key policy elements that every jurisdiction needs to regulate and manage CO2
at scale (building on IOGCC and emerging federal component)
– Status: staff to begin working with participants to draft model rule comments
and template/toolkit elements
• Deliverable 5: Identify and site inter-jurisdictional CO2 pipeline
– Near term collaboration with participating state agency and NGO partners on
development of regional CO2 pipeline network optimization model
• Develop scenarios for location and scale of needed pipeline infrastructure in 2015,
2020 and 2050 to meet MGA technology commercialization, CCS deployment and
regional GHG reduction targets
– Status: Exploration of model development and funding underway among
participants and staff
Low-Carbon Corridors Resolution
• Staff worked with Hunter Roberts to convene small meeting of
utility CEOs and NGO executive directors in June to explore
how MGA resolution might be implemented in Upper
Midwest part of the region
• Participants agreed on the value in building a broader
stakeholder consensus on next-generation, low-carbon
renewable and fossil power supply, together with
transmission expansion, in the 2015-2025 timeframe
• They also want to add development and deployment of plugin hybrids and smart-grid capabilities in conjunction with work
on the low-carbon electricity supply side of the equation.
• Status: They have proposed continuing with a small working
group to flesh out options and recommendations for
governors and premiers’ staff
Greenhouse Gas Advisory Group
• Three full advisory group meetings to date, plus one round of
in person subgroup meetings and two rounds of conference
calls
• Fourth meeting in Milwaukee next week includes public input
session
• Subcommittees formed, each with a governor’s
representative chairing and staff leads from the Pew Center or
World Resources Institute:
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Scope
Allowances
Target-Setting, Data and Compliance
Modeling
Offsets
Subgroup Status
• Scope
– Preliminary recommendation, subject to
modeling, that cap and trade program will cover
electricity and large industrials (just under half of
regional emissions)
– Major questions:
• Which complementary policies will be recommended to
supplement for greater economy-wide coverage?
• How will implementation be assured?
Allowances
• Subcommittee in process of agreeing on
technologies and practices that should receive
special incentives through allowance distribution
(e.g. energy efficiency, CHP, CCS, etc.)
• Participants must still make basic recommendation
about allowance value distribution mechanism(s):
allocation based upon past emissions, auction or
hybrid
Modeling
• ICF selected as vendor
• IPM power sector model with build-out for
additional sectors, together with REMI for
modeling of macroeconomic impacts
• Subcommittee and ICF team now meeting on
assumptions book and development of
reference case
Target-Setting
• Subgroup has recommended, subject to modeling
results, ranges for interim and mid-century regional
targets of 15-25 percent reductions from 2005 levels
by 2020 and 60-80 percent reductions by 2050.
– Generally consistent with MN statutory and IL executive
order targets
• Participants have also recommended that the capand-trade targets and program be reviewed
periodically based on evolving science and
technology and on results of program to date.
Offsets
• Subgroup is developing a proposed mechanism for
offsets governance and administration
• Participants have begun identifying a list of offset
categories to undergo technical review and
evaluation for potential inclusion in a program
• Recommendation that offset participation at 10
percent and 50 percent of emissions under capped
sectors be modeled
• Recommendation on whether offsets, which ones,
and how much is forthcoming
Modeling in the MGA Process
Update on NCBC Low Carbon Fuels
Policy Initiative
• Organized by North Central Bioeconomy Consortium,
with participation and input from MGA advisory
group participants and staff
• Chaired by Iowa Secretary of Agriculture Bill Northey,
with a regional steering committee
• 4 webinars, 1 in-person meeting planned to date for
stakeholder information and discussion
LCFP Process Goals
• Articulate a Midwestern position on the development of state
and federal policies
• Make recommendations to the Midwestern Governors
Association
• Make recommendations on how to integrate state efforts
• Assure that Midwestern interests have a voice in the
development of low carbon policies at the national level
• Improve life cycle estimates for corn ethanol
 Understand how implementation of Low Carbon Fuel
Standards will impact the corn-ethanol industry
Four LCFS Webinars
• Webinar 1: Overview of process and issues
• Webinar 2: Status of major Low Carbon Fuels
Policy efforts: CARB, Lieberman-Warner, US
EPA, EU
• Webinar 3: Life Cycle GHG Assessment for
Biofuels
• Webinar 4: Midwestern state Low Carbon
Fuels Policy initiatives.
MGA Advisory Group Representatives
BTAG group:
• Mary Blanchard
• Charles Griffith
• Robert Craig
• Dennis Banasiak
• Mike Doherty
GHG group:
• Doug Scott
• Nancy Jackson
Potential LCFS Study
Goal: Develop a credible analytical basis for the LCFS.
Audience: Policymakers and key stakeholders (biofuels, electric utilities,
automakers, oil companies, environmentalists)
Key Questions:
1. What role could LCFS play in reducing GHG emissions from transportation (vs.
vehicle standards, fuels in cap, VMT, incentives, etc.)?
2. How does an LCFS work: broad programmatic design choices and linkages to
other climate and transportation policies?
3. How could the Midwest meet an LCFS, including with biofuels, electricity, and
hydrogen?
Broad research team planned: expertise from key solutions areas (biofuels,
electricity, hydrogen) with geographic diversity.
Status:
Foundation willing to fund study, pending MGA support.
www.midwesterngovernors.org
www.midwesternaccord.org