Significant reductions in greenhouse gas emissions (GHG) from existing fossil-fueled power plants can be effectively and affordably achieved through EPA performance standards and guidelines, according to a study from the Clean Air Task Force (CATF). According to the study, based on an economic modeling analysis prepared by the NorthBridge Group, the reductions in those greenhouse gas emissions result in displacement of power generation from the highest-emitting coal-fired power plants by generation from under-utilized, efficient natural gas plants, at minimal cost. CATF has submitted these results to the U.S. Environmental Protection Agency (EPA) as “a viable way forward,” as the drafts its carbon pollution rule for existing power plants under the Clean Air Act.Central to the application of an existing plants rule under this proposal is the creation of an emission budget-based “model” interstate emission credit trading rule by EPA that can easily be implemented by the states. The rule would facilitate states participating in cost-saving emissions credit trading and allow states to mitigate retail electric rate impacts through free allowance allocations. The rule would also allow states to compensate merchant coal generators for losses in asset value that may occur as a result of the program. The net result of this system would be to create incentives for operators to shift generation to existing under-utilized natural gas units and reduce reliance on the highest-emitting coal units, according to NorthBridge.
“…the U.S. can achieve significant CO2 emissions reductions from the fleet of existing fossil-fueled power plants at minimal cost simply by taking greater advantage of currently underutilized natural gas plants to displace power from the highest-emitting coal plant,” said Conrad Schneider, advocacy director for CATF and author of the report. “We recommend that EPA tap this potential by issuing carbon pollution standards and offer states a model emission credit trading rule to facilitate implementation.”
The proposed CATF policy could cut power plant carbon pollution by 27 percent from 2005 levels by 2020 while holding increases in electric rates to 2 percent, according to Schneider, countering claims by opponents that cutting carbon pollution must be expensive and disruptive.
The report recommends that EPA set separate emission rate standards for fossil-fueled utility boilers at 1,450 pounds CO2/MWh, and natural gas combustion turbines at 1,100 lbs CO2/MWh. Further, it says the policy should facilitate least-cost implementation for states by issuing a model interstate emission credit trading rule with the opportunity to use the free allocation of allowances to protect electric retail ratepayers of all classes.
When in place, CATF claims these strategies will protect system reliability, grid stability and fuel diversity by relying on proven, existing fossil electric units that are already in operation and available today.
Bruce Phillips, director of the NorthBridge Group said the analysis suggests a decrease of 27 percent, or 636 million metric tons of CO2, from 2005 levels by 2020.
EPA is working to meet a June 2014 deadline for an existing power plants draft rule
Source: Fierceenergy.com