Greenhouse Gas Regulatory Update · 11/1/2016 · of existing, new gas insulated switchgear (GIS)...
Transcript of Greenhouse Gas Regulatory Update · 11/1/2016 · of existing, new gas insulated switchgear (GIS)...
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N O V E M B E R 1 , 2 0 1 6 | H O L Y O K E , M A
Patricio Silva
Environmental Advisory Group
Greenhouse Gas Regulatory Update
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• November 4, 2016: Paris Agreement enters into force with 74 parties, representing 58% of global greenhouse gases submitted compliance instruments
• Over 170 governments signed the agreement on April 22, 2016, the first day the agreement was open for signature. It remains open for signature until April 21, 2017
• U.S. has pledged to reduce U.S. GHG emissions by 26-28% by 2025 compared to 2005 levels
• Congressional Research Service Paris Agreement Overview identifies economic, technical and policy factors that may help meet the U.S. commitment: – natural gas prices, – environmental compliance costs, – retirement pattern of coal-fired
power plants, – restrained demand for electricity, – lower costs of renewable energy
and battery capacity, – state and local policies, – public support for renewable
energy, and – extension of renewable energy tax
credits.
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2015 Paris Agreement
Sources: Spiegel & McDiarmid LLP; CRS
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CLEAN POWER PLAN UPDATE
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• September 27, 2016: full panel of D.C. Circuit Court of Appeals heard arguments addressing:
1) All statutory issues other than Section 112
a) generation shifting b) State authority)
2) Section 112 3) Constitutional issues 4) Notice issues 5) Record-based issues not
submitted on briefs
• Oral arguments did not provide particular clarity on whether the full panel will approve, reject or remand CPP
• D.C. Circuit expected to release a decision either late in 2016 (less likely) or early in 2017
• Regardless of outcome, multiple parties already signal they intend to appeal a perceived adverse decision to the Supreme Court – Four Supreme Court justices
are needed to accept a petition for review
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Clean Power Plan 111(d) Litigation Update West Virginia v. EPA, No. 15-1363
Source: MJ Bradley & Associates LLC
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New Source 111(b) Litigation Update North Dakota v. EPA, No. 15-1381 (D.C. Cir.)
Challenges to GHG Standard for New or Reconstructed Generators • August 3, 2015: EPA finalizes CO2
standards for modified or reconstructed power plants, with separate standards for:
– Electric steam generating units – Stationary combustion turbines
• Base load natural gas units • Non-base load natural gas units • Multi-fuel units
• Six groups of petitioners (States, affected industry, trade groups) filed various challenges
– D.C. Circuit consolidated all challenges
• November 2016-February 2017: D.C. Circuit set briefing deadlines, with final briefs due early in 2017
– Arguments have not been scheduled
Petitioners Assert EPA Exceeded Authority in Drafting 111(b) Rule • States and industry petitioners
assert the CO2 standards assume widespread deployment of carbon capture and storage technologies (CCS) for new coal-fired power plants notwithstanding the technology is presently in limited commercial use
• EPA maintains CCS technologies represent the appropriate technology standard for new coal-fired plants and demonstration projects underway are sufficient justification
5 Sources: MJ Bradley & Associates LLC; Law360
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Clean Energy Incentive Program (81 FR 42939) 300 million allowances available nationwide
States Allocate Allowances or Credits, EPA Matches Award • June 30, 2016: EPA proposes
renewables incentive program for state to encourage certain early emission reduction projects using certain eligible technologies: – Wind – Solar – Geothermal – Hydropower
• October 23, 2016: EPA extended the comment period until November 1, 2016(81 FR 59950)
• EPA intends to finalize CEIP model rules by December 2016
Available Matching Allowances (Mass-based CCP State Plans)
Renewable Energy Reserve
Low-Income Community
Reserve
Connecticut 104,122 104,122
Maine 31,109 31,109
Massachusetts 255,705 255,705
New Hampshire 161,696 161,696
Rhode Island 53,511 53,511
Regional Total 606,143 606,143
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Note: An allowance is equivalent to 1 ton of CO2 emissions and would have monetary value in a carbon market.
Sources: EPA; MJ Bradley & Associates LLC
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REGIONAL GREENHOUSE GAS INITIATIVE 2016 Program Review and Interaction with Clean Power Plan
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RGGI Program Overview 3rd Control Period (2015-2017) Overview, Allocations & Recent Auction Results • 86.5 million short tons - RGGI 2016 cap,
covers 20% of 9 RGGI States total GHG emissions inventory
– 163 affected entities (RGGI wide) – New England share 30.6 M
• 64.6 million short tons – 2016 Adjusted RGGI cap (to account for banked allowances)
– New England share 21.7 M
• 203 million allowances in circulation at the end 2nd Qtr 2016
• Auction 33 (June 1, 2016) results: All 14.91 million allowances offered purchased at price of $4.54/ton
• Next auction (34) scheduled for December 7, 2016
RGGI 2016 CO2 Allowance Allocation (State %)
6% 4%
4%
23%
16% 5%
39%
2% 1%
Connecticut Delaware Maine
Maryland Massachusetts New Hampshire
New York Rhode Island Vermont
8 Sources: RGGI; MJ Bradley & Associates LLC
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New England RGGI States Auction Results 2009-2016YTD (Auctions 1-33)
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• Since the June 17, 2016 RGGI program review stakeholder meeting additional modeling results and stakeholder comments have been posted
• The original modeled scenarios included two reference cases and five policy choices
• Reference cases – CPP New + Existing (N+E) – CPP Existing only (E)
• Policy cases – CPP E 2.5% 2024 – CPP N+E 2.5% 2024 – CPP N+E 2.5% – CPP N+E 5.0% – CPP N+E 5.0% CCR
• Model Rule Reduction Target: media coverage and analysts observing the 2016 RGGI program review suggest RGGI States appear to be gravitating toward RGGI model rule changes involving between a 2.5% and 5.0% annual reduction
2016 RGGI Program Review Update Additional Modeling Results Released
10 Source: RGGI
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RGGI 2016 Program Review Modeled Reduction Scenarios (2016-2031)
11 Sources: RGGI; ICF Consulting
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MASSACHUSETTS GLOBAL WARMING SOLUTIONS ACT SECTION 3(D) MEETINGS
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SF6 CO2
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Massachusetts Global Warming Solutions Act Section 3(d) Potential Rule Stakeholder Meetings
Executive Order 569 Fulfilling Kain v. DEP requirements • September 16, 2016: Governor Baker
issues Executive Order 569, directing that Mass DEP propose regulations that:
– Limit greenhouse gas emissions – Limit the aggregate emissions released
from each group of regulated sources or categories of sources,
– Set emission limits for each year, and – Set limits that decline on an annual
basis
• December 16, 2016: GWSA rule proposal deadline
• August 11, 2017: deadline for adopting final rules to meet 2020 GHG state-wide emission limits
Stakeholder Meeting Schedule • Wednesday, November 2, (Boston),
Thursday, November 3, (Worcester) – Overview – Gas-insulated switchgear – Requirements for Mass DOT – State vehicle fleet – Natural gas distribution system methane
leaks – General stakeholder discussion
• Thursday, November 3 (Worcester) – Overview and discussion of potential
regulations
• Monday, November 7 (Boston ) – Emitting electricity generators – Retail electricity sellers
• Materials available at: – http://www.mass.gov/eea/agencies/mass
dep/air/climate/section3d-comments.html
13 Source: MA DEP
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MA DEP: MA GHG Emissions Inventory
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Emissions in 2013 were 75.8 MMTCO2e, which is 19.7% below 1990 level
Source: MA DEP
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MA DEP: Draft GHG Reductions from New and Existing Regulations
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MassDEP Regulation New or Draft Amendment?
Section 3(d)? Estimated Reductions 2013 – 2020*
Transportation Sector Regulations 3.2 - 4.1%
Vehicle GHG Standards N/A (Existing) No
Requirements for MassDOT Amend Yes
State Vehicle Fleet New Yes
Electricity Sector Regulations 4.0%
Clean Energy Standard for Retail Sellers New No
Generator Emissions Caps New Yes
Methane Leaks from Gas Distribution System New Yes 0.05%
Gas Insulated Switchgear Amend Yes 0.01%
Total 7.3% - 8.2%
* Electricity and transportation reductions are aggregated in this table to avoid double counting across policies.
Source: MA DEP
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MA DEP: Electricity Sector GHG Reductions
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Source of Reductions Estimated Reductions 2013 – 2020*
Coal Fired Power Plan Retirements (Net of gas generation increase compensating for Brayton, Salem, Mt. Tom, Pilgrim
shutdowns)
- 0.2%
Renewable Portfolio Standard (RPS) 0.7%
All Cost Effective Energy Efficiency + Appliance Standards (Net of projected 2020 electric vehicle load)
2.2%
New Clean Electricity (Estimate reflects DOER supply assessment with surplus in-region RE)
1.3%
Total 4.0%
* Assumes that natural gas generation compensates for other changes in load and generation. New MassDEP regulations would establish an emissions cap that reflects aggregate changes in emissions resulting from the policies listed above.
Source: MA DEP
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GWSA Section 3(d) Potential Sulfur Hexafluoride (SF6) Draft Aggregate Cap
• Draft cap affects Eversource and National Grid operations
• Based on 2015 nameplate capacity of existing, new gas insulated switchgear (GIS) and existing rule declining leak rates (below)
• MA DEP proposes after 2020, the leakage rate would remain in place and allow for growth in GIS capacity
Maximum Allowable SF6 GIS Emissions Cap for Eversource, National Grid (pounds)
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2,000
3,000
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Source: MA DEP
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1.0%
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2015 2016 2017 2018 2019 2020
Maximum Annual SF6 Emissions Rate
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MA DEP: GWSA Section 3(d) Potential Rulemaking Timeline
• November 7, 2016: Electricity sector meetings
• November 16, 2016: Stakeholder discussion draft comment deadline
• December 16, 2016: Propose regulations
• February 24, 2017: Complete public hearings
• August 11, 2017: Promulgate final regulations
Source: MA DEP
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EPA GREENHOUSE GAS PERMITTING UPDATE
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• October 3, 2016: EPA proposed revisions to the PSD and Title V GHG permitting regulations and established a significant emissions rate (SER) for GHG emissions under the PSD program – 81 FR 68110
• These revisions respond to the 2014 U.S. Supreme Court decision, UARG v. EPA, vacating provisions of EPA’s tailoring rule
• Proposal includes: – definition changes – changes to plant-wide
applicability limitations, and – other changes
• EPA explains the changes are needed to ensure that neither the PSD or Title V rules would require a source to obtain a permit solely because the source emits or has the potential to emit GHGs above applicable thresholds
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EPA Proposes GHG Permitting Changes for Larger Sources (including Generators)
Sources: EPA 81 FR 68110; Dinsmore & Shohl LLP
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