Transcript Indiana Energy Conference EPA Clean Power Plan—111(d) November 13, 2014 Thomas W. Easterly, P.E., BCEE, Commissioner IN Department of Environmental Management.

Indiana Energy Conference
EPA Clean Power Plan—111(d)
November 13, 2014
Thomas W. Easterly, P.E., BCEE, Commissioner
IN Department of Environmental Management
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IDEM’s Mission
Protecting Hoosiers and Our Environment
While Becoming the Most Customer-Friendly
Environmental Agency
IDEM’s mission is to implement federal and state
regulations to protect human health and the
environment while allowing the environmentally sound
operations of industrial, agricultural, commercial and
government activities vital to a prosperous economy.
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Timeline
111(b) - New Sources
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•
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February 26, 2014 – 111(b) for new
fossil fuel EGUs published in the
Federal Register
March 6, 2014 – Comment period
extended
May 9, 2014 – Comment period closed
January 2015 - Final rule scheduled
for release
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111(d) – Existing Sources
June 2, 2014 – 111(d) for EGUs
released
June 18, 2014 – published in the
Federal Register
December 1, 2014 – comments due to
U.S. EPA
June 1, 2015 – U.S. EPA targeted
promulgation date
June 30, 2016 – state/ regional plans
or requests for extensions due
June 30, 2017 – final due date for
individual state plans
June 30, 2018 – final due date for
regional plans
Year 2020 – States/regions must meet
interim emission goals
Year 2030 – State/regions must meet
final emission goals
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Existing Source Proposal—111(d)
The proposed goal for Indiana is to reduce our net
emissions from the 2012 level of 1,924 lb
CO2/MWh to 1,607 lb CO2/MWh for the period
2020 to 2029 and 1,531 lb CO2/MWh after 2029.
Goal is based upon:
1. Increase coal EGU efficiency by 6%.
2. Increase NGCC utilization from 53% to 70%.
3. Increase renewable energy generation to 7%.
4. Reduce energy demand by 3.2% by 2020 and
11.11% by 2030 through energy efficiency.
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Existing Source Proposal—111(d)
U.S. EPA estimates on a national level that:
• Coal production will decrease 25 to 27%, and the
price of coal will decrease by 16 to 18% by 2020.
• Natural gas production will increase by 12 to 14%
with a price increase of 9 to 12% by 2020.
• Renewable generation capacity will increase by 12
GW, NGCC capacity will increase by 20 to 22 GW.
• Coal generation capacity will decrease by 46-49
GW, and oil generation capacity by 16 GW.
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Existing Source Proposal—111(d)
• Annual incremental compliance costs of $5.5 to
$7.5 billion in 2020 and $7.3 to $8.8 billion in 2030.
• Job increases of 25,900 to 28,000 in the electricity,
coal and natural gas sectors by 2020.
• Job increases of 78,000 for demand-side energy
efficiency by 2020.
IDEM is currently evaluating both the feasibility and
estimated cost of meeting U.S. EPA’s goals.
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Indiana Carbon Dioxide Emission Rates
(pounds of CO2 per Megawatt Hour)
2012 Baseline U.S. EPA 2030 Indiana 2030 Estimate
Goal
1,924
1,531
1,615 to 1,683
Alternative Goal
1,683
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Impacts on Indiana
• This regulation will increase the costs of
energy in the United States—both natural
gas and electricity prices expected to rise
by 10%--the impact on Hoosiers may be
greater due to our current reliance on coal.
• The number of Hoosiers who lose utility
services for non-payment is likely to
increase.
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Impacts on Indiana
• This increased cost of energy will likely
reduce the international competitiveness
of Hoosier businesses resulting in a shift
of emissions from Indiana to other
countries.
• The worldwide greenhouse gas emissions
may actually increase when manufacturing
moves from Indiana (and the rest of the
United States) to other countries.
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Climate Impacts—111(d) Proposal
This rule will have virtually no impact on
modeled global climate change. It is
projected to reduce:
• Global CO2 concentrations by 1.5 ppm by
2050. This represents 0.3% of the expected
projected average global average CO2
concentrations in 2050.
• Sea level increases by 0.01 inch.
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Climate Impacts—111(d) Proposal
The proposed rule is also projected to reduce:
• Global average temperatures by 0.016o F
(0.009o C) based upon U.S. EPA’s climate
models.
– This projected temperature reduction is based
upon the projected 1.5 ppm reduction in global
CO2 concentrations.
– Since 1998, global average CO2 concentrations
have increased by 33 ppm or 9%, but global
average temperatures have not increased.
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7000
United States Carbon Dioxide Emissions
(Millions of Metric Tons)
6000
5000
111(d) Reductions
Other Sources
Electricity
4000
3000
2000
1000
0
1990
2005
2012
2020
2025
2030
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State Goals as % Reduction from 2012
Source: Bloomberg New Energy
Finance
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Percentage Change in CO2 Emissions from Utilities
(2005 – 2012)
Decreasing >15%
Decreasing 0 – 15%
Increasing
No Data
Location of the State Capitals
State Boundaries
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Reliability Concerns
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Road Blocks to Compliance
• Time frames
– Insufficient time to develop State rule.
– Insufficient time for meaningful stakeholder process.
– Insufficient time for legislative action to take place (Blocks
2-4).
• Regulatory authority
– IDEM lacks authority to regulate energy distribution.
– IDEM lacks authority to regulate energy efficiency beyond
fence line.
– IDEM lacks authority to set renewable energy standards.
– IDEM lacks ability to enforce, document, and measure
energy efficiency measures.
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Road Blocks to Compliance
• Infrastructure
– Transmission lines not in place for current wind farm capacity.
– Insufficient transmission lines for new wind farms scheduled to
be built.
– Questions as to sufficient pipeline capacity for increased natural
gas use.
• Generation capacity
– Concerns about generation capacity should there be fuel supply
interruptions with increased reliance on natural gas fuels.
– Questions concerning sufficient capacity for “peak demand
days.”
– Closures may make Indiana a net importer of electricity.
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Indiana’s Response to the
111(d) Proposal
• The proposed regulation is not consistent
with our goal of affordable reliable energy.
• Governor Pence, Attorney General Zoeller
and IDEM Commissioner Easterly have
taken numerous actions to opposing U.S.
EPA’s proposal.
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Indiana’s Response to the
111(d) Proposal
• Indiana is pursuing other options in case the
legal and policy challenges do not succeed.
– IDEM is preparing possible options for a State
plan to meet the proposed regulations.
– IDEM and the IURC are working with other
MISO states as the Midcontinent States Energy
and Environmental Regulators (MSEER) to
evaluate possible regional plans.
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2
Midcontinent States Environmental and Energy Regulators
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Questions?
Tom Easterly
Commissioner
Indiana Department of Environmental Management
(317) 232-8611
[email protected]
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